This Singapore High Court decision arose from the preliminary determination of an issue in law – specifically, whether the plaintiffs were entitled to simultaneously claim for both wrongful gain interest and wrongful loss interest. The defendants previously admitted to unauthorized copying and access, and breach of confidence in respect of the plaintiffs’ confidential information.
In relation to breach of confidence, wrongful gain interest refers to the plaintiff’s interest in preventing others from wrongfully profiting from confidential information, whereas wrongful loss interest protects the confidentiality surrounding the said information, and additionally requires the defendant’s conscience to be impacted by its breach of its confidentiality obligations.
Having reviewed the law in relation to breach of confidentiality, the High Court applied the following principles:
- If there is a wrongful gain interest, the following elements must be present;
- The information possesses a quality of confidence;
- The information was imparted in circumstances importing an obligation of confidence; and
- There was unauthorized use of the information. In appropriate cases, the use occurred to the detriment of the party who originally communicated it.
- In situations where confidential information was acquired in an unauthorized manner, if the defendant’s conscience has been impacted in the breach of the obligation of confidentiality, then there is prima facie a wrongful loss interest. If the elements (a) and (b) set out above are found on the facts, the burden then shifts to the defendant to prove that its conscience was unaffected.
The court held that different remedies are warranted for each form of interest. Wrongful gain interest attracts, among others, a wide range of remedies including injunctions, delivery-up, as well as monetary remedies in the form of damages or equitable compensation. However, the court’s view was that, while equitable compensation may generally be an inappropriate remedy for wrongful loss interest in the absence of any use of confidential information, the court could still order equitable damages to be paid based on, among others, a quantifiable impression of the value of the confidential information, considering the additional cost the defendants would have incurred, had they not referred to the confidential information.
In its preliminary determination, the court held that a plaintiff in a breach-of-confidence dispute is entitled to plead that it is proceeding on both wrongful gain and wrongful loss interest. Each form of interest arises can arise on similar facts, but attracts different remedies.
This article was first published in the IP Analysts column of Asia IP.