Case: Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203
Outcome: applied
agreed elements of the action for breach of confidence are, for present purposes, that: (i) the information in question must be confidential in character: it must have "the necessary quality of confidence about it": Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203 at 215; (ii) it must have been imparted in circumstances importing an obligation of confidence: Coco v A N Clark (Engineers) Ltd [1969] RPC 41 at 47; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37 at 40; and (iii) there must have been an actual or threatened unauthorised use or disclosure of that information: Smith Kline &amp; French Laboratories (Aust) Ltd v Department of Community Services and Health [1989] FCA 384 ; (1990) 22 FCR 73 at 87, 111-112; Prince Jefri Bolkiah v KPMG (a firm) [1998] UKHL 52 ; [1999] 2 AC 222. See generally, Dean, The Law of Trade Secrets and Personal Secrets (2 nd ed, 2002); Toulson and Phipps, Confidentiality (2 nd ed, 2006). The essential attribute of confidential information is what has been described as "relative secrecy": Franchi v Franchi [1967] RPC 149 , at 153; Interfirm Comparison (Australia) Pty Ltd v Law Society of New South Wales [1975] 2 NSWLR 104 at 119. Whether this attribute exists in a given case will be often a question of degree and a variety of criteria have been invoked in varying contexts to sharpen the inquiry to be made: (i) is the information in question widely known, or publicly available in the relevant industry, trade, etc: Coco at 51; cf Ansell Rubber Co at 50; Titan Group Pty Ltd v Steriline Manufacturing Pty Ltd (1990) 19 IPR 353 at 381; (ii) has the confider made the information public by using it in its manufactured products and placing it on the market, or would the ascertainment of the information from the manufactured product by reverse engineering or otherwise require the expenditure of time, effort, money or experimentation: see eg Ackroyds (London) Ltd v Islington Plastics Ltd [1962] RPC 97 ; Aquaculture Corporation v New Zealand Green Mussel Co Ltd (1985) 5 IPR 357 at 379; (iii) did the confider produce or obtain the information only after the expenditure of time and/or money by way of research or in the application of skill and ingenuity; Saltman Engineering Co Ltd ; cf United Sterling Corporation v Felton [1974] RPC 162 ; Interfirm Comparison (Australia) Ltd , at 117; could another person acquire or duplicate the information only by going through a like process: Cranleigh Precision Engineering Ltd v Bryant [1966] RPC 81 at 89-90; Ansell Rubber Co at 49; (iv) what steps has the confider taken to preserve the secrecy of the information and to prevent it becoming public knowledge: Amber Size &amp; Chemical Co Ltd v Menzel (1913) 30 RPC 433 at 438; Dean, at [3.165]-[3.175]; (v) is the information intrinsically valuable or is it valuable to the confider or to a competitor or other interested party: Surveys &amp; Mining Ltd v Morrison [1969] Qd R 470 ; Measures Brothers Ltd v Measures [1910] 1 Ch 336 ; and (vi) would a reasonable person in all the circumstances recognise the information to be the "property" of the confider: Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167 at 191; Printers &amp; Finishers Ltd v Holloway (No 2) [1965] RPC 239 at 255. The alternative test the "purpose" test asks: Has confidential information been imparted for what was known, or ought reasonably to have been known, to be only for a particular purpose? If it has, its use must be limited to that purpose. This approach has commonly been used in cases in which confidential industrial information has been disclosed (usually under contract) to a manufacturer either by way of licence for a period or so as to manufacture a product for the confider: see Saltman Engineering , at 213; Nichrotherm Electrical Co Ltd v Percy [1956] RPC 272 at 280; Ackroyds (London) Ltd at 104; Torrington Manufacturing Co Ltd v Smith &amp; Sons (England) Ltd [1966] RPC 285. Its use extends beyond that context: see Interfirm Comparison (Australia) at 117; and Gurry "Breach of Confidence" in Finn (ed) Essays in Equity , 118 (1985); Smith Kline &amp; French , at 96. Turning to the claims against Dr Keung, it is asserted in the alternative that he owed a duty of confidence directly to Hamilton in virtue of the disclosure actually being made to him and breached that duty by the disclosure he made, or that he knowingly participated in AMC's breach of confidence in that he directed or procured AMC's breach and was liable therefore. I am prepared, for present purposes, to assume that Dr Keung owed a duty of confidence directly to Hamilton. He was the actual recipient of information which he had reason to know was to be kept confidential, albeit he received it for AMC which in turn owed a duty of confidence directly to Hamilton. If, for example, he used such information for his own private purposes which resulted in a gain for him or a loss to Hamilton, he would have been liable therefore at the suit of Hamilton: see Saltman Engineering Co Ltd v Campbell Engineering Co Ltd , at 213; and without the need for any circularity of action by joining AMC as a party. I need not consider AMC's liability in such a case for present purposes: cf Coulthard v South Australia [1995] SASC 4927 ; (1995) 63 SASR 531 at 535. Equally, I am prepared to assume that he would be liable to Hamilton on an accessorial liability basis for his intentional procurement of AMC's breach of confidence to Hamilton. In this I recognise that there is a significant body of discordant case law across the common law world on the question of the liability of directors who are participants in the wrongs of their company, whether that wrong be a breach of contract, a tort, or an equitable wrong: see the helpful discussion of this in relation to tortious liability in Anderson, "The theory of the corporation and its relevance to directors' tortious liability to creditors" (2004) 16 Aust Jo Corp Law 73; on the small company problem for directors, see Finn, "Opening Remarks" (1999) 27 Fed L Rev 171 at 177-180; see the discussion in Root Quality Pty Ltd v Root Control Technologies Pty Ltd [2000] FCA 980 ; (2000) 177 ALR 231 at [113] - [147] ; and see Mortimore QC Company Directors Ch 27 (2009 OUP).