Have you ever wondered how Coca Cola have managed to keep their recipe a secret since 1891? One could argue that the method/process of producing the Coca Cola drinks was a patent at the time of discovery. However, Coca Cola chose not to register the recipe as a patent. Why? Because by registering the recipe as a patent, it would only be protected for a maximum period of 20 years. Cola Cola’s competitors would thereafter be entitled to use the recipe to produce their own drinks; and this would be plain for all to see how coca cola is manufactured and produced. This would also give a definitive lifespan on the product, before countless competitors came to market with their identical product(s).
Law of confidence
Coca Cola chose to rely on the law of confidence instead which has its basis in common law. This is an alternative way to protect an invention against use by competitors; and it protects all kinds of confidential information. In theory, a secret can be kept confidential indefinitely. Therefore, it gives the product and its recipe a potentially longer lifespan.
Can the information be protected? If so, how?
The easiest way to ensure confidentiality is protected, is through use of confidentiality agreements. A confidentiality agreement imposes obligations on the recipients not to use or disclosure the information. If confidential information is to be disclosed, regardless of the reason, the recipient of such information should always first sign a confidentiality agreement; this is to ensure that such information is protected.
If there is no confidentiality agreement, the information may be protected by common law. Provided that the following requirements are met:
- The information has the necessary quality of confidence – i.e. the information is not already in the public domain, has commercial value and is not common knowledge;
- The information was communicated in circumstances importing an obligation of confidence- i.e. such circumstances can involve a special relationship between the parties (e.g. doctor-patient). The Courts would apply an objective test whether ‘a reasonable person in those circumstances would have believed an obligation of confidence was imported’;
- Actual/proposed unauthorised use of the information to the detriment of the person communicating it – i.e. disclosing information to third parties or using it for unauthorised purposes.
It is always better to have a confidentiality agreement in place rather than rely on the common law. The Corporate Commercial Department here at Fisher Jones Greenwood LLP can certainly assist you in drafting a confidentiality agreement or pursue a claim for breach of such agreement or otherwise advise you on your confidentiality position at law generally. Should you require any further information or assistance please do not hesitate to get in touch – call 01206 700113 or email [email protected].
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