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Doctrine of Confidential Information: Professor Peres’ Case


Professor Peres is an employee of a university. He gives a one-hour guest lecture to a local business enterprise group on the enterprise’s premises. Peres’ lecture is based on his research and notes and he gives out a written summary of his notes to the attendees after the lecture. The professor used his personal experience to illustrate examples during the lecture and as well answered questions from his audience. He also drew a diagram on a board which he only rubbed at the end of the lecture. Professor Peres later learned that one of his audiences took a photo of his diagram and intends to enlarge the photo and reproduce it for personal use. Another person, a magazine journalist, took notes during the lecture adding views according to his magazine company’s interest but using the professor’s keywords of the lecture he published the ideas. Another person directly translated the Professor’s notes into a Chinese academic journal.

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The case of professor Peres can be covered under the doctrine of confidential information. Under this doctrine, confidential information is defined as any piece of information that is not public and is disclosed by a party to another. The disclosed information could range from “business plans, presentations, contracts, products, data, documentation, business methods” among others (Samsung 1). The range of information considered in this context is too wide to the informal definition of information, apart from the information that has been deemed to be in the public domain. In the case of written confidential information, a mark of confidentiality is supposed to accompany the written information at the time of the initial disclosure. In the case of orally or visually disclosed information, the confidentiality is supposed to be communicated at the time of disclosure and followed by a written notification within thirty days. In case of disclosure of confidential information, two parties are involved. The disclosing party is the one that releases the confidential information while the party to whom the information is given is called the receiving party.

Obligations under the Doctrine of Confidential Information

Once confidential information has been given to the receiving party, the receiving party has the obligation to “exercise the same degree of care, though not less than a reasonable standard of care to prevent the unauthorized disclosure, dissemination, and use of confidential information as it does to protect its similar information” (Samsung 1). The receiving party is also under an obligation to only disclose the subject information to its employees or to the employees of an affiliate party who were originally deemed to receive the information for the objectives of the information. The third party, “the affiliate and its employees, must, in this case, make a written submission to be bound by the conditions of disclosure, and the receiving party will be jointly liable for any breach” (Sumsang 1). The information, however, remains under the ownership of the disclosing party, and the information together with any reproduction from it must be returned to the disclosing party in case of termination of the agreement (Samsung 1).

The receiving party’s responsibilities however do not apply in the cases where: it lawfully had the information before the disclosure, it independently sources for the same information without employing the disclosed information as a resource, the information was publicized before its disclosure, the information is acquired through a third party who is under no obligations or if the disclosure is an under court order (Samsung 1).

Advice to the Professor

Under the definition of confidential information, the information offered by the professor during the lecture is considered confidential and therefore protected by the laws under the doctrine of confidential information. Under the obligations of the doctrine of confidential information, the receiving party is supposed to prevent any dissemination or use of confidential information. In the case of “Saltman engineering Co Ltd v Campbell Engineering Co Ltd” in the year 1948, it was held by the court of appeal that even if a contract never existed between parties, an obligation may be considered under the confidentiality of the information. Under the circumstances of the case, the court of appeal held that breach of confidence is considered provided that the information disclosed to the receiving party was “confidential”, where confidentiality includes information that is primarily constructed by the disclosing body, even if it is constructed from a piece of information which is already in the public domain (Groves 645). In the case of “Thomas Marshal v Guinle”, in the year 1979, it was further established that information is considered confidential if the release of the said information can lead to damage on the side of the disclosing party or give any form of advantage to the competitors of the disclosing party or any other party. The disclosing party must have had the perception that the disclosed “information is confidential” and the confidentiality of the disclosed information must also be further judged according to traditions of the field or profession under which the information lies (Groves 647).

Using the two case laws, the primary basis of the confidentiality of the professor’s lecture information is upheld as they were constructions of his personal experience and knowledge. Considering the first case where the receiving party intended to enlarge a picture of the professor’s diagram for personal use, the party shall by doing this breach the obligations under the doctrine of confidential information as mentioned above. The receiving party is under obligation to restrain from using the information apart from for the initially intended purpose. The private use of the diagram by this party is reasonably out of the intentions of the objective of the lecture which was on business law. The professor is therefore advised to seek an injunction order to restrict the reproduction and use of his diagram if he considers this move as either a threat to himself or an advantage to other guest lecturers. He stands a high chance of successfully getting an injunction order.

In the second case where a journalist has used sections of the professor’s information to directly write an article that was further published, the journalist has disseminated and used the information contrary to the initial objective of the lecture which was to help employees of the receiving company understand the law. This is specifically since the magazine is not limited to the employees who were given the lecture. There is therefore a breach of the doctrine and the professor is again advised to seek legal action that might result in compensation to him by the journalist and an injunction of further dissemination of his lecture information. There is again a high chance of winning the case.

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The same reasoning applies to the case where a person has directly translated the information into another language. The same information shall have been disclosed and disseminated by the person who translates and publishes it in a journal. Again the professor can highly succeed in seeking compensation from the person who translated the information and acquires injunction to further use of the information.

Pros and Cons of the Doctrine of Confidential Information

The doctrine of confidential information has a variety of advantages to the disclosing party and even to the receiving party. The advantages accrued to the disclosing party are in the sense of his protection against breach of confidentiality of his information. The doctrine ensures that a party’s confidential information that has been under an express or implied agreement disclosed to a receiving party remains confidential with the receiving party as long as the disclosing party keeps the information away from the public domain. This has the advantage of protecting the disclosing party from any form of damage that the further disclosure of such information by the receiving party could cause to the disclosing party. The disclosing party is also protected from unfair competition that could be caused by competing rivals if they were to obtain confidential information by further disclosure of the information by the receiving party. The receiving party is on the other hand protected by the doctrine which negates the confidentiality of the information in cases where the information has been made public by the disclosing party or if the receiving party independently produces the same information (Samsung 1).

The doctrine on the other hand has the disadvantage of “partial” protection to the disclosing party. Under the doctrine, a person who receives the information from a party who is not under obligations of confidentiality is exempted from the same obligation. A leak of confidential information into the public domain can also minimize the disclosing party’s rights over the information. The disadvantage of the doctrine to the receiving party is that the party is as well charged with the responsibility of safeguarding the information, a task that can be tiresome especially if the information is of interest to other parties who wish to obtain it through unfair means (Samsung 1).

How to Break Up a Company to Maximize Value to Shareholders

Shareholders of any company have the right to participate in the decision-making processes and to fair treatments in matters that relate to “dissolution or change of the company form” (Hetzel 10). A breach of the rights of shareholders can lead to legal actions against the company or its administrators if it is in a dissolution process (Hetzel 10). Breaking up of a company involves its liquidation and the process of settling all the money value that the company owes its creditors and finally paying the shareholders their worth in the company. The liquidation process is occasionally long and the shareholders tend to get less worth for their money. To maximize the shareholders’ value in the dissolution, a laid down procedure needs to be followed in the dissolution process. The gross value of the company is first determined from which liabilities and commitments are deducted to obtain the net worth of the company, the worth is further reduced subject to costs relating to “taxes, brokerage, legal and other fees” (Business 7). The value impairment due to time delays is further considered before the liquidation value is determined. The amount due to the shareholders is then calculated from the liquidation value (Business 7).

Works Cited

Business. BVR’s Guide to Fair Value in Shareholder Dissent, Oppression, and Marital Dissolution. New York, NY: Business Valuation Resource, 2007. Print.

Groves, Peter. Sourcebook on intellectual property law. London, UK: Routledge, 1997. Print.

Hetzel, Ludwig. The Protection of Minority Shareholders under the New Company Law of the People’s Republic of China. Nornderstedt, Germany: GRIN Verlag, 2009. Print.

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Samsung. Definition of confidential information. Semicon-partner, 2010. Web.

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