How Effective is the Confidentiality Clause in your Email Footer?

/ David Bey / Articles

A recently published decision by the Australian Design Office provides a cautionary tale about the effectiveness of generic confidentiality clauses in email footers.

Sun-Wizard Holding Pty Ltd v Key Logic Pty Ltd [2017] ADO 8

Key Logic (the owner of a registered design for a Sollar Bolard) had sent email correspondence (prior to filing a registered design application) containing representations of the design to a number of parties. Despite the emails including a generic confidentiality footer below the signature block, a Delegate found that the representations were not communicated in a way which imposed an obligation of confidence on the recipient, and were therefore considered published for the purpose of the Designs Act.

Section D07.3.2 of the Design Examiner’s Manual provides guidance regarding the publication of a design in this context:

The criterion of ‘published’ relates to public availability. It is not limited to the process of producing multiple or a requisite amount of copies (such as the printing of a magazine).

A design is published in a document if:

  • the document is one that a member of the public can inspect “as of right”; or
  • a person not bound by express or implied confidentiality has knowledge of the content of the document.

For a design to have been considered ‘published’, it should have been made available to the public without obligations of secrecy or confidentiality. In considering the circumstances which would impart an equitable obligation of confidence, the principal authority is the decision of Coco v AN Clark (Engineers) Ltd (1968) 1A IPR 586 (‘Coco’).

Coco sets out two requirements to be satisfied in order to impart, on a recipient of information, an equitable obligation of confidence, as follows:

  • First Requirement – the information must have the necessary quality of confidence; and
  • Second Requirement – the information must have been communicated in circumstances which impart an obligation of confidence

Despite Key Logic arguing to the contrary, the Delegate held that including a generic confidentiality clause in an email footer was insufficient to satisfy the second requirement:

It is not sufficient that Mr Arieni had an expectation that the material he provided in the email was kept confidential. That expectation was not clearly communicated nor was it apparent from the circumstances in which the email was sent. If the Owner sought to protect the Design by keeping it confidential, he ought to have kept it to himself.”

With regard to the confidentiality clause:

“I am not persuaded that the confidentiality notice at the bottom of the email has the effect submitted by the Owner… it is apparent that notices of that type are added almost universally by businesses as a matter of course beneath the signature blocks of their emails regardless of the content of the email to which they are appended. It is unlikely that any recipient of an email in a business setting reads beyond the signature block every time they receive an email…the ubiquitous presence of such notices means that they are unlikely to have the effect asserted by the Owner… a confidentiality notice at the beginning of an email is far more likely to be effective in importing an obligation of confidence to the recipient.”

As the email attaching representations of the design was communicated prior to the priority date associated with the design application, the Delegate’s finding meant that the design was not new and distinctive when compared with the prior art base – which included the email itself.

As a result of this decision, when communicating information by email which is intended to be confidential, it is important not to rely on a generic confidentiality clause in an email footer, but to instead include an additional or more prominent notification, such as a confidentiality notice at the beginning of an email.