In many circumstances it can be difficult to establish all the elements of this 3 point test. As such, businesses should act prudently in only disclosing their confidential information when they have obtained a signed Non-Disclosure Agreement from the recipient party.

Non-Disclosure Agreements can be used to protect know-how, ideas, themes, customer lists, pricing strategies, technical information, methodologies and commercial plans. There are certain "danger areas" where they should always be used, such as:

  • when engaging in a joint-venture;
  • when instructing consultants or sub-contractors; and
  • during the initial discussions around a business acquisition or disposal.

Confidential information, once the 3 point test is satisfied, is then protected for as long as it remains confidential in nature. Should the information become outdated, or if the confidentially agreement is time limited then the information’s confidential nature may be lost.

A breach regarding confidential information can be established where confidential information is: threatened to be used; used for an unauthorised purpose; and disclosed without authorisation to another.

The remedies for the unauthorised use of confidential information include:

  • an account of profits; and
  • an inquiry into damages.

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