Mr Seager had invented a patented carpet grip which he manufactured and marketed under the trade mark Klent. There were protracted negotiations between Mr Seager and Copydex over a proposal for Copydex to market the Klent. One of the issues in the negotiations was the price at which Mr Seager was to supply the product. During a meeting with two representatives of Copydex Mr Seager disclosed to them an alternative design of grip which could be produced more cheaply. Although there was a dispute as to precisely what had been disclosed at the meeting, there was no dispute that the disclosure was in confidence The defendants had manufactured a carpet grip, honestly and unconsciously making use of that confidential information. The alternative design was not covered by Mr Seager’s patent.
Held: The court upheld Mr Seager’s claim for breach of an equitable obligation of confidence, holding that Copydex must have unconsciously made use of the information which Mr Seager gave them The court ordered damages to be assessed on a restitutionary basis.
Lord Denning MR said: ‘The law on this subject does not depend on any implied contract. It depends on the broad principle of equity that he who has received information in confidence shall not take unfair advantage of it. He must not make use of it to the prejudice of him who gave it without obtaining his consent. The principle is clear enough when the whole of the information is private. The difficulty arises when the information is in part public and in part private. As, for instance, in this case. A good deal of the information which Mr Seager gave to Copydex Ltd. was available to the public, such as the patent specification in the Patent Office, or the KLENT grip, which he sold to anyone who asked. If that was the only information he gave them, he could not complain. It was public knowledge. But there was a good deal of other information he gave them which was private, such as the difficulties which had to be overcome in making a satisfactory grip; the necessity for a strong, sharp, tooth; the alternative forms of tooth; and the like. When the information is mixed, being partly public and partly private, then the recipient must take special care to use only the material which is in the public domain. He should go to the public source and get it; or, at any rate, not be in a better position than if he had gone to the public source. He should not get a start over others by using the information which he received in confidence. At any rate, he should not get a start without paying for it. It may not be a case for injunction or even for an account, but only for damages, depending on the worth of the confidential information to him in saving him time and trouble.’ The court confirmed the equitable remedy for breach of confidence: ‘The law on this subject does not depend on any implied contract. It depends on the broad principle of equity that he who has received information in confidence shall not take unfair advantage of it. He must not make use of it to the prejudice of him who gave it without obtaining his consent. The principle is clear enough when the whole of the information is private. The difficulty arises when the information is in part public and in part private. As, for instance, in this case. A good deal of the information which Mr Seager gave to Copydex Ltd. was available to the public, such as the patent specification in the Patent Office, or the KLENT grip, which he sold to anyone who asked. If that was the only information he gave them, he could not complain. It was public knowledge. But there was a good deal of other information he gave them which was private, such as the difficulties which had to be overcome in making a satisfactory grip; the necessity for a strong, sharp, tooth; the alternative forms of tooth; and the like. When the information is mixed, being partly public and partly private, then the recipient must take special care to use only the material which is in the public domain. He should go to the public source and get it; or, at any rate, not be in a better position than if he had gone to the public source. He should not get a start over others by using the information which he received in confidence. At any rate, he should not get a start without paying for it. It may not be a case for injunction or even for an account, but only for damages, depending on the worth of the confidential information to him in saving him time and trouble’. Where information is mixed partly public and private, then the recipient must take special care to use only the material, which is in the public domain: ‘He should go to the public source and get it; or, at any rate, not be in a better position than if he had gone to the public source.’
Lord Denning MR, Salmon LJ, Winn LJ
[1967] 1 WLR 923, [1967] RPC 349
England and Wales
Cited by:
Cited – Regina v Department of Health, Ex Parte Source Informatics Ltd CA 21-Dec-1999
Where information was given by a patient to the pharmacist, and he took the data, stripping out any possibility of the individual being identified, the duty of confidence which attached to the prescription was not breached by the passing on of the . .
Cited – EPI Environmental Technologies Inc and Another v Symphony Plastic Technologies Plc and Another ChD 21-Dec-2004
The claimant had developed an additive which would assist in making plastic bags bio-degradable. They alleged that, in breach of confidentiality agreements, the defendants had copied the product. The defendants said the confidentiality agreement was . .
Cited – Ratiu, Karmel, Regent House Properties Ltd v Conway CA 22-Nov-2005
The claimant sought damages for defamation. The defendant through their company had accused him acting in such a way as to allow a conflict of interest to arise. They said that he had been invited to act on a proposed purchase but had used the . .
Cited – B and B v A County Council CA 21-Nov-2006
The claimants sought damages from the defendant local authority after their identities had been wrongfully revealed to the natural parents of the adoptees leading to a claimed campaign of harassment. The adopters has specifically requested that . .
See Also – Seager v Copydex (No. 2) CA 1969
. .
Cited – Vestergaard Frandsen A/S and Others v Bestnet Europe Ltd and Others SC 22-May-2013
The claimant companies appealed against a reversal of their judgment against a former employee that she had misused their confidential trade secrets after leaving their employment. The companies manufactured and supplied bednets designed to prevent . .
Cited – Attorney General v Guardian Newspapers Ltd (No.1) HL 13-Aug-1987
A retired secret service officer intended to publish his memoirs through the defendant. The house heard an appeal against a temporary injunction restraining publication.
Held: Lord Bridge delivered his dissenting speech in the case of . .
Cited – Vestergaard Frandsen Sa ( Mvf3 Aps) and Others v Bestnet Europe Ltd and Others CA 20-Apr-2011
The claimants manufactured insecticidal fabrics. They claimed that the defendants had produced their own product using confidential information obtained from their former employees now working for the defendant. The courts had granted injunctions . .
Cited – Paymaster (Jamaica) Ltd and Another v Grace Kennedy Remittance Services Ltd PC 11-Dec-2017
(Court of Appeal of Jamaica) The parties disputed the ownership of copyight in certain computer software, and also an allegation of the misuse of confidential information. . .
Lists of cited by and citing cases may be incomplete.
Intellectual Property, Equity
Updated: 22 January 2022; Ref: scu.182798