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Naming names and the public domain

Feature Articles

Cite as: (2007) 81(7) LIJ, p. 54

The AFL Drugs case warns lawyers that limited dissemination of confidential information does not always mean it has become public property.

By Andrew Scott and Jonathan Elliot

The AFL Drugs case warns lawyers that limited dissemination of confidential information does not always mean it has become public property.
By Andrew Scott and Jonathan Elliot

Although it is sometimes said that sport imitates life, Australia, and Melbourne in particular, is a place where sport can change life, or at least the application and understanding of the law.

“Confidential information” has long been understood to be knowledge which is kept secret from all but a select few. The courts have defined it as material facts or knowledge not in the “public domain”[1] or information which is not “public property and public knowledge”.[2]

This, of course, begs the question of when something is in the public domain and when it is not.

In Australian Football League and Australian Football League Players’ Association Inc v The Age Company Ltd and Ors[3] (the AFL Drugs case), certain information became “knowable”, if not actually known, by thousands or even millions, yet this did not result in it ceasing to be “confidential”.

The case

In August 2006 in the AFL Drugs case, the Victorian Supreme Court decided that The Age and other media outlets should not be allowed to publish the names of three professional footballers who had allegedly tested positive to the use of banned drugs.

This case was particularly interesting because the players had already been identified by the Sydney Morning Herald and Fox Footy and in several Internet discussion sites. Yet in March 2006 the Australian Football League (AFL) and the AFL Players’ Association were successful in seeking an interim injunction prohibiting any further publication of the names of those players.

For determination of the key issue – whether a permanent injunction to the same effect should be granted – the matter came before Kellam J in the Supreme Court.[4]

The Supreme Court decided that even though there had already been public disclosure of the players’ names, such information was not yet “in the public domain”.

The AFL Drugs case concluded that even though the confidential information (the players’ names) had already been disseminated, it was not so generally accessible that it had lost its confidentiality.

This has important ramifications for many business agreements, as discussed later in this article.

Confidentiality

The confidentiality of the information itself arose from an agreement between the AFL and the AFL Players’ Association struck in February 2005, as a result of which the first version of the current Illicit Drugs Policy (IDP) emerged. The status of the AFL Players’ Association was, and is, such that it has the right to negotiate and enter into binding contractual agreements on behalf of all registered AFL players, each of whom is then individually bound by the terms of those agreements.

The operative part of the IDP provided that all registered players (approximately 700 across all 16 clubs) were bound to submit to random drug testing. This itself was controversial enough, particularly as it exposed players not only to testing on match days but to out-of-competition testing too. An important factor, which must have influenced the AFL Players’ Association to accept the IDP, was that its members would not be publicly identified unless they became “repeat offenders”.

Under the IDP, any such player found to have tested positive to the presence of proscribed drugs was to have their details recorded, and the test results reported by the Australian Sports Drug Agency to the AFL. The AFL medical officer was then required to inform the player, who was obliged to attend on that medical officer for the purposes of education, counselling and treatment. No one else was required, or permitted, to be informed of the test results at this stage without the consent of the player.

If a player returned a second positive test the same procedure applied, except that the relevant club medical officer was also to be informed, again for the primary purpose of education and treatment. The information was not permitted to be disclosed more widely at that stage.

On a third positive test being returned by a player, that player was to face the AFL Tribunal, which would consider imposition of a sanction, possibly a fine or a suspension from playing. Because such a process would be open to the public, the name of the player concerned would become public knowledge at that time, having previously not been in the public domain.

Or at least that was the theory.

Following recent intervention by the federal government in the wake of the suspension of West Coast Eagles footballer Ben Cousins over what Mr Cousins’ father publicly described as “substance abuse”, this policy may change. However, the wider ramifications flowing from the Kellam judgment will not.

The Kellam judgment

The AFL Drugs case puts all lawyers on notice that apparent disclosure to the public does not always mean that the information is in the public domain.

In considering the extent to which disclosure in print, radio and web-based media had found its way into the public domain, Kellam J said:

“Information will be confidential only if it is not ‘public property and public knowledge’. Put another way, information will not have the necessary quality of confidence about it if it is ‘public knowledge, commonly known, publicly known, well-known, public property ... or common knowledge’.[5]

“The issue before me is whether the information the subject of confidentiality, has received sufficient publicity to effectively destroy the purpose of confidentiality, and thus to make it pointless on the part of the Court to restrain the further publication of confidential information.” [35-36]

His Honour went on to consider the words of Cross J in Franchi v Franchi, who said:

“Clearly a claim that the disclosure of some information would be a breach of confidence is not defeated simply by [the recipient] proving that there are other people in the world who know the facts in question ... It must be a question of degree depending on the particular case, but if relative secrecy remains, the [disclosing party] can still succeed”.[6]

In deciding whether “relative secrecy” has been lost in any one instance, Lord Goff in the Spy Catcher case concluded that information was in the public domain if “the information in question is so generally accessible that, in all the circumstances, it cannot be regarded as confidential”.[7]

In relation to the release of the information via the Sydney Morning Herald and Fox Footy, the Supreme Court considered, perhaps surprisingly, that these sources had only disseminated information to a limited audience.

The Court’s findings included [52]:

  • the Sydney Morning Herald had been distributed electronically to a small number of organisations before being recalled;
  • the mention of a name on Fox Footy by a talkback caller was momentary, speculative and heard by the Pay TV audience only; and
  • there had been no dissemination of the information to the public at large, being the readers of national newspapers, or viewers of free-to-air television or by other mass media outlets.

The Court considered that the strongest argument for the information having found its way into the public domain was that it was referred to in several Internet postings.

However, the Court found that the fact that such speculative gossip, innuendo and assertion by unknown persons had been placed on the websites of various discussion fora did not make confidential material lose its confidential nature. This was because the public, and particularly that part of the public which uses Internet chat rooms, has no such expectation of authenticity, veracity or otherwise of the information posted on such websites. [56]

This, it held, was a vastly different proposition from the circumstances of publication of material by a newspaper, television station or other source of dissemination of news and other material such as radio or authorised websites conducted by such sources. Those sources are accountable for the information they publish and are, to an extent at least, trusted by the public to report material to that public accurately. [56]

Accordingly, the Court concluded that the information was not yet in the public domain and therefore had retained its quality of confidence.

Breach of non-disclosure obligations

Legal advisers should take care that clients who are the recipients of confidential information do not misinterpret some of the key findings of the AFL Drugs case. For example, the finding that the “posting” of information on an unauthorised website does not necessarily mean that confidential information has been placed in the public domain does not mean that the recipient of confidential information may do such a thing without being in breach of their own obligations of non-disclosure.

Nonetheless, a carelessly drafted non-disclosure provision could permit an unscrupulous party to do so without penalty.

For instance, if the clause stated, “The recipient of confidential information may not disclose such information into the public domain, without the prior written consent of the disclosing party”, then disclosure of the information into an Internet discussion forum may well be permitted by such a clause, much to the dismay of the owner of the information (not to mention that of their lawyers or, in turn, their professional indemnity insurers).

One way of avoiding an argument as to whether such disclosure would breach the recipient’s obligations is to draft the relevant clause even more simply, making it a blanket restriction as follows:

“The recipient of confidential information may not disclose such information to any person or into any forum whatsoever without the prior written consent of the disclosing party”.

There is, of course, a difference between permitted selective disclosure by the recipient of confidential information and breaching the non-disclosure obligations.

Many non-disclosure agreements expressly permit a party (e.g. the potential purchaser of a business) to make disclosure to their professional advisers. The common sense behind this exception is obvious, because information that is confidentially disclosed is often of an accounting or legal nature that is beyond the ability of such a purchaser to properly analyse. If the purpose of obtaining the confidential information in the first place is to form a view whether or not to proceed with the purchase, then the recipient of the information needs to be able to understand it.

Whether expressly permitted or not, this type of selective disclosure to the recipient’s lawyers (if not also to their accountants) is capable of being implied into such agreements by applying the usual tests, such as that the implied term is so obvious it goes without saying and that it is necessary to give business efficacy to the agreement.

The public domain

Another perspective for legal advisers to consider when advising is whether or not confidential information received by their client (a recipient pursuant to a non-disclosure agreement or someone else who has an obligation of non-disclosure) can be openly disclosed once it has spread into the public domain through no fault of the recipient.

In such a case the legal position turns on what is the “public domain”.

Before the AFL Drugs case, most lawyers might have considered that disclosure in an online newspaper (albeit only for some hours) might have amounted to the information losing its confidential status, and accordingly led them to advise the recipient of such confidential information that they had become, as a consequence, free to ignore their duties of confidentiality in relation to such information.

But if the information retains its relative secrecy even after limited disclosure, it would still be “confidential” and therefore protected from further disclosure.

In determining “relative secrecy”, it therefore becomes pertinent to consider who has become aware of the confidential information. This would not necessarily be measured by the number of people who have become aware of it but the use that could be made, or the competitive advantage which could be gained, by those people who have “innocently” come into possession of the information.

Perhaps perversely, information may lose its relative secrecy (and will therefore be capable of lawful wider dissemination) when it becomes known to only a small number of people, even if they are in a position to take the greatest advantage from that knowledge, yet it would retain its relative secrecy where it becomes known to a much larger population, none of whom appreciate its commercial importance.

Conclusion

Lawyers should, as a result of the matters highlighted by this case, be aware that not all the horses have bolted just because some, perhaps many, members of the public have been alerted to certain confidential information. The relative secrecy of the information may not yet have been lost, and accordingly a concerned client whose confidential information has been threatened may still have a valuable cause of action to prevent its further dissemination.


ANDREW SCOTT is a principal with Moores Legal, a former Law Institute of Victoria president and an accredited business law specialist. He has a keen interest in sports law, having previously acted for many years for the AFL Players’ Association. JONATHAN ELLIOT is an articled clerk with the firm.
The numbers in square brackets in the text refer to the paragraph numbers in the judgment.


[1] Coco v AN Clark (Engineers) Ltd (1969) 86 RPC 41.

[2] Saltman Engineering Co Limited v Campbell Engineering Co Limited [1963] 3 All ER 413 at 415.

[3] [2006] VSC 308.

[4] Note 3 above.

[5] Robert Dean, The Law of Trade Secrets and Personal Secrets (2nd edn), 2002, Lawbook Co.

[6] [1967] RPC 149 at 152-153.

[7] Attorney-General v Guardian Newspapers (No 2) [1990] AC 109 at 282.

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