between a willing buyer and a willing seller, or a consultant’s fee for the information, depending upon the nature and quality of the information. The judge expressed no concluded view on an alternative argument that the confider might recover what the confidant had saved in time and trouble in obtaining the information by its own efforts. If the information was confidential, then B may, in addition to a damages claim, have a claim for account of profits should A have profited from an intentional breach of confidence.94 If it can be said that A has used the design for its profit, then there may be, in the alternative, a claim under recompense, on the basis that B has been enriched by A’s work and that A did not intend to donate such enrichment.95 Such a claim may, however, be met with the counter-argument that the information (the design) was provided in suo by B, that is, that the expenditure was made for B’s own benefit. This counter-argument succeeded in Site Preparations v. Secretary of State for Scotland.96 In this case, the pursuer had prepared plans in an attempt to win a contract with the defender. The pursuer was denied an action in recompense even although the defender had taken some benefit from the plans, as the court held that the plans had been prepared to enable the pursuer to win a valuable contract. Any benefit received by the defender was incidental to this in suo expenditure.

B would be able to interdict A against further use or disclosure of the information97 and also C, provided that C knew or ought to have known that the information was confidential.98 B may be able to obtain from the court an order for the delivery up and/or destruction of material in the hands of A and C containing the confidential information.99 Interdict might be linked with claims for damages, account of profits/ recompense and delivery-up/destruction of infringing material.

Spain

A is liable to B on the grounds of articles 13 and 18.5a of the law on unfair competition.100 Article 13 establishes that the use or disclosure of any kind of industrial secrets by one who obtained them licitly (but

94The Laws of Scotland: Stair Memorial Encyclopaedia (1993), vol. 18, para. 1490.

95Levin v. Caledonian Produce (Holdings) Ltd 1975 SLT (Notes) 69, 71.

961975 SLT (Notes) 41.

97The Laws of Scotland: Stair Memorial Encyclopaedia (1993), vol. 18, para. 1488.

98Lord Advocate v. Scotsman Publications 1989 SLT 705; see also Quilty v. Windsor 1999 SLT 346, 356.

99The Laws of Scotland: Stair Memorial Encyclopaedia (1993), vol. 18, para. 1491.

100Ley 3/1991, 10 Jan. 1991 de Competencia Desleal, BOE no. 10, 11 Jan. 1991.

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with the duty of confidentiality) or illicitly is considered an act of unfair competition. In this case, A obtained the information about the computer chip during negotiations. Knowing that this chip was a considerable technological advance, A at least implicitly accepted a precontractual duty of confidentiality, imposed by good faith, even if this was not explicitly mentioned and even though it is not covered by any special legal rule.101 Passing on the information to a third party and in that way using the secret also for himself is to be qualified without doubt as an act contrary to fair competition. In that case, on the basis of article 18 of the Law on Unfair Competition, B can probably demand, on the one hand, that the production of the chip be stopped102 and, on the other hand, claim the losses suffered, as far as loss has been caused intentionally or negligently by violation of the Act.103 A, by passing on the secret for his own use and profit, intentionally causes loss to B: the loss B suffers by not being able to obtain any or as much gain by selling and producing his invention (lucrum cessans).

Sweden

A is liable to compensate B for all loss caused to B by A’s use of B’s trade secret, and to pay punitive damages to B.

The negotiations have probably resulted in the parties having explicitly or implicitly reached an agreement on confidentiality. According to the travaux pre´paratoires of the Trade Secrets Act,104 this is the textbook case of when to apply the Act.105 The information given by B to A legally constitutes trade secrets as it concerns information about B’s business that B keeps secret and it is of such nature that it is liable to cause B competitive loss.106 A’s use of these trade secrets is unauthorised by B.107 As A has – negligently or intentionally – used trade secrets that he has received in connection with a business relationship, he is liable to compensate B for the loss B has incurred due to A’s behaviour.108 When calculating the damages, regard should be had to the non-violating party’s interest that the trade secrets be not used without

101Audiencia Provincial de Navarra, 10 Jun. 1998, no. 133/1998, AC 1998\1455.

102Article 18.2a. 103 Article 18.5a.

104Lag om skydd fo¨ r fo¨ retagshemligheter (1990:409) (TSA).

105Proposition 1987/88:155 med fo¨rslag till lag om fo¨retagshemligheter m.m., p. 43; SOU 1983:52 Fo¨retagshemligheter. Beta¨nkande av utredningen om skydd fo¨r fo¨retagshemligheter, p. 385; Fahlbeck, Reinhold and Fo¨retagshemligheter, Konmkurrensklausuler och

yttrandefrihet. En kommentar, p. 229.

106 TSA, s. 1. 107 TSA, s. 2. 108 TSA, s. 6.

authorisation and to other circumstances not having a direct economic importance.109

Accordingly, B is entitled not only to compensation for the damage and the pure economic loss caused by A’s use of the trade secrets, but also punitive damages of such an extent that will discourage a person from considering the possibility of using trade secrets without authorisation.110 The Act does not provide any more detailed guidance as to how the damages should be calculated. However, according to the travaux pre´paratoires, due regard should be had to such things as the lost profits and costs of the non-breaching party, the profits and turnover of the party in breach, whether or not the party in breach acted intentionally, whether the non-breaching party was the weaker party, and the non-breaching party’s interest in keeping the secret to himself.111 Due to the legislation, it does not make any difference if B told A that he expected A to treat the information as confidential.

Switzerland

A is not entitled to damages on the ground of an intellectual property right. However, this does not exclude the protection of intellectual work on other grounds.

A is liable on the ground of culpa in contrahendo. Where a party gives information in the course of negotiations, the other party, according to the general principle of good faith, has a duty not to disclose that information or to use it improperly for its own purpose.112 B therefore has a claim for compensation of the lost profits (the profits he would have realised if A had acted lawfully).

A is also liable in tort on the ground of unfair competition. The use of confidential information is an act of unfair competition under article 5 lit. a or the general clause113 in article 2 of the Unfair Competition Act.114 According to article 5 lit. a, person is acting unfairly if he improperly uses for his own purposes the result of work such as offers, calculations or designs given to him as confidential. This rule applies in

109TSA, s. 9.

110Fahlbeck, Reinhold and Fo¨retagshemligheter, Konmkurrensklausuler och yttrandefrihet. En kommentar, p. 255

111Proposition 1987/88:15 (above n. 105), pp. 26 and 49–50.

112BernerKommentar-Kramer, OR 22 n. 36; Tercier, Le droit des obligations, n. 581. Cf. Zu¨rcherKommentar-Baumann, ZGB 2 n. 176; Loser, Vertrauenshaftung im Schweizerischen Schuldrecht, n. 889.

113In BGE 113 II 319, the Federal Court applied the general clause in a similar case.

114Bundesgesetz gegen den unlauteren Wettbewerb (UWG), 19 Dec. 1986.

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particular to technical drawings which a party discloses to the other party during the course of negotiations for a contract of work.115 The unfair competition is an unlawful act. B therefore has a claim for compensation of the lost profits on the ground of tort.116

A must disgorge the profits made by his own dealing with the design. A is conducting B’s business without mandate but in his own interest.117 There is a special provision in the Code of Obligations:118 ‘If the conduct of the business has not been made in the principal’s interest,119 the latter may nevertheless appropriate the benefits resulting from the other person’s acts.’ B is therefore entitled to claim the net profits A received by virtue of his management. It is immaterial whether B would have made the same profit if he had marketed the design himself.120 According to academic writers and case law, B is, however, not entitled to claim A’s profits in addition to the compensation in damages.121

B may also apply to the judge for an injunction against the improper use of the information.122

It makes no difference if B told A that he expected A to treat the information as confidential.123 This may lead to a confidentiality agreement.124 The contractual duty, however, would only confirm the duty based on the principle of good faith.

Editors’ comparative observations

All the reporters agree in giving B a remedy for the misuse by A of confidential information provided to him by B during the negotiations for a commercial contract which failed to materialise. B’s telling A that the information should be treated as confidential can in some jurisdictions strengthen the case for the remedy, or even add additional grounds of relief (sometimes giving rise to a contractual obligation of confidentiality), but all jurisdictions are able to impose liability without this addition of the express stipulation of confidentiality. The only exceptions to this are Italy, where the reporter considers that B’s own

115 Pedrazzini and Pedrazzini, Unlauterer Wettbewerb, n. 9.10. 116 UWG 9 III.

117Cf. BaslerKommentar-Weber, OR 423 n. 3 and 16; Schmid, Die Gescha¨ftsfu¨hrung ohne Auftrag, n. 1079ff.

118OR 423 I. 119 OR 422. 120 BaslerKommentar-Weber, OR 423 n. 13f.

121BGE 97 II 178, BaslerKommentar-Weber, OR 423 n. 14; recently and with differentiations, BGE 133 III 153, 159f. E. 2.5.

122UWG 9 I.

123Cf. BernerKommentar-Kramer, OR 22 n. 36.

124See BernerKommentar-Kramer OR 22 n. 61.

failure properly to protect the confidentiality of his information might undermine his claim to remedy; and the Netherlands, where there is no evidence in the case law of such claims, although the reporter thinks it likely that there would be liability on general principles.

Whilst the imposition of liability is virtually unanimous, the basis of liability is not, and many reports offer various multiple bases of claim to protect B’s interests. Austria, Denmark, Finland, Germany, Greece, Italy, Norway, Portugal, Spain, Sweden and Switzerland have legislative provisions which cover this situation, either directly or indirectly (by defining the wrongfulness for a claim brought under the general principles of culpa in contrahendo or tort). Many jurisdictions use their general provisions for precontractual liability/culpa in contrahendo (Austria, Finland, Germany, Greece, the Netherlands, Portugal, Switzerland) or tort (France, Germany, Greece, the Netherlands, Scotland). Breach of confidence is treated in English and Irish law as an area sui generis: remedies can be given in the law of contract (in the case of contractual duties of confidentiality) as well as in tort and equity.

The remedy, too, varies. Most commonly it is damages to compensate B for his loss of profit. But many jurisdictions (Austria, England, Finland, Germany, Greece, Ireland, the Netherlands, Scotland, Switzerland and possibly Portugal) also require A to pay to B either the actual profits he has made from the misuse of the information, or the value he could have made from it, although in some jurisdictions the recoverable profits are limited under the general principles of unjust enrichment. Sweden also allows punitive damages to discourage parties from misusing confidential information without authorisation. Some reporters (Austria, England, Finland, France, Ireland, Scotland, Switzerland) point out that an injunction could be obtained (at least against A and, in the view of some, perhaps even against C) to restrain misuse of the information that was obtained in confidence. Jurisdictions which identified more than one possible remedy all made clear that the claimant has the choice amongst them.