UK Law and Practice Contributed by: Nicola Dagg, Steven Baldwin, Rory Clarke and Ashley Grant, Kirkland & Ellis International LLP
1.4 Elements of Trade Secret Protection Under Common Law/Equity The seminal test for an action in breach of confi - dence is set out in Coco v AN Clark (Engineers)
Is the information “trade secret” ? Under Regulation 2, “trade secret” means infor- mation that meets all of the following require - ments: • it is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among, or readily accessible to, persons within the circles that normally deal with the kind of information in question; • it has commercial value because it is secret; and • it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret. Was there unlawful acquisition, use or disclo - sure? The claimant must prove one or more of the fol - lowing in circumstances constituting a breach of confidence in confidential information (Regula - tion 3): • unlawful acquisition; • use; or • disclosure. Under the NSA 2023, an additional layer of pro - tection exists where trade secrets are misappro - priated in connection with foreign powers. If the misappropriation of a trade secret is done with the intent to benefit a foreign state, it constitutes a criminal offence. 1.5 Reasonable Measures Under the statutory regime imposed by the Directive/Regulation, for information to qualify as a trade secret, it must have been subject to “reasonable steps under the circumstances” to
Ltd [1968] FSR 215. The following apply.
• The information must have the necessary quality of confidence. The information must therefore be sufficiently secret and valu - able. It must have “the necessary quality of confidence about it, namely it must not be something which is public property or public knowledge” (Saltman Engineering Co Ltd v Campbell Engineering Co Ltd [1948] 65 RPC 203 [1948] 65 RPC 203, at 215). • The information must have been imparted in circumstances importing an obligation of con - fidence. Such circumstances could arise – eg, through being imposed by contract – because of the particular circumstances in which the information was imparted due to a special relationship between the parties (eg, doctor- patient, lawyer-client). • Threatened or actual unauthorised use of the information to the detriment of the person communicating it. This can include use out - side the scope of authorisation – eg, where the confidential information has been dis - closed for a specific purpose, and it is used for an ulterior purpose. • The unauthorised use of information was without lawful excuse. The burden lies upon the defendant to establish that it has a lawful excuse, and not upon the claimant to prove the absence of any lawful excuse (JC Bam - ford Excavators Limited v Manitou UK Limited & Anor [2023] EWCA Civ 840, [40]).
Under the Directive/Regulation The following questions apply.
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