When to stay silent…

You may be aware that J K Rowling, the author of the ridiculously successful Harry Potter series, also writes under a pseudonym, Robert Galbraith.

Her lawyer, Chris Gossage, was certainly aware because he had been advising her on the project. Unfortunately, Mr Gossage (in flagrant breach of his professional duty of confidentiality) told his wife’s best friend what he was doing at work. And she then revealed the news to a journalist on Twitter. It was never going to end well. Ms Rowling took legal action against Mr Gossage for breach of confidentiality, and he agreed to make “a substantial donation to charity” by way of a settlement.

The reason I mention this story now is because another lawyer has hit the news for breaching client confidentiality.

The wonderfully-named US law firm of Quinn Emanuel Urquhart & Sullivan act for Samsung, particularly in relation to its never-ending patent war with Apple and Nokia. As part of the court proceedings, the law firm was allowed to see the terms of a licence agreement between Apple and Nokia, but on strict understanding that the terms were to remain confidential.

Of course, the law firm went straight back to their client, Samsung, and told them what they’d seen.

And, to his credit, a Samsung executive promptly informed Nokia’s head of intellectual property that he’d been made aware of the terms of the licence agreement. Understandably, Nokia weren’t very happy about, and neither were Apple when they subsequently found out.

So Nokia and Apple sued Quinn Emanuel Urquhart & Sullivan for breach of confidentiality, and won. The court ordered the law firm (together with Samsung) to pay a total of $2 million in compensation.

I’m guessing that Mr Gossage’s charitable donation wasn’t quite that substantial, but the principle remains the same – lawyers are under a duty of confidentiality, and there are serious consequences when they fail to comply with that duty.

But have you ever actually taken the time out to consider how your business’s confidential information is protected? Just how do you ensure that it remains a secret from your competitors, or from the industry media? Or do you not protect it, and it is perhaps only a matter of time before your ‘crown jewels’ are paraded in the public domain, open for everyone to copy?

There are some things that are famously confidential – Coca-Cola’s secret formula, for example, or Kentucky Fried Chicken’s secret blend of herbs and spices. These companies jealously guard that information, and will never permit it to enter the public domain.

However, sometimes you will need to ‘go public’ with your information, so how do you ensure your competitors don’t steal your innovation?

You could, of course, enter into a non-disclosure and confidentiality agreement with whomever you disclose your information to. That won’t, in itself, prevent your information from being exploited, but would give you a legal claim if it was. Or you to seek to protect your information by way of intellectual property rights, such as patent protection, design rights or the ever-interesting world of semi-conductor topography (yes, this does exist, and gets some people really quite excited!).

Either way, it is worth pausing for a moment, and considering how best to protect that information that is vital for your business.

But ultimately, the only sure-fire, cast-iron, watertight (and any other cliché you care to mention) method of keeping your information confidential is … don’t tell anyone.

Yes, I appreciate that’s not particularly helpful advice, but it is absolutely true. No matter how well you protect your inventions with patents, or your designs with design rights, or your information with non-disclosure agreement, or no matter how strict a lawyer’s professional duties may be, each of these only gives you a remedy once the confidential information has been disclosed to the wider public.

Therefore mum’s the word.

Oh, and you can trust me – I’m a lawyer!

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.