This article has been written by Vishakha Bhanot, pursuing a Diploma in Media and Entertainment Law: Contracts, Licensing and Regulations and has been edited by Oishika Banerji (Team Lawsikho).

It has been published by Rachit Garg.

Introduction

A confidentiality agreement is a legal contract or a clause, protecting the owner’s confidential information/data from disclosure by others. Confidentiality agreements include Non-Disclosure Agreements (NDAs), which are routinely entered into by parties to protect their intellectual property rights and from premature and unauthorised disclosure of their sensitive information from reaching the public or competitors. Within the media and entertainment industry in India, NDAs are entered into by parties who wish to protect the secrecy around certain projects before they are released to the public. NDAs are usually entered into for films, screenplays and storylines, when the idea is completely original, the parties have obtained approval to move ahead with the project and the project is to be exploited commercially for a valuable consideration.

Why are confidentiality agreements needed

Confidentiality is a key legal consideration in the media and entertainment industry, as it acts as a directive to keep the original idea or an original project secret, until the same is ready to be shared with the public. For instance, actors in a play/web series/film are usually required to sign such agreements, preventing them from disclosing any information regarding a scene, plot, or any details of their projects or any project undertaken by the producer or director of a film or screenplay, which is not known to the public yet. 

This also applies to the fashion industry as well, wherein the designers may enter into confidentiality agreements with their models and employees in order to ensure secrecy and their new designs. Confidentiality is also required in cases wherein a script writer shares his story or a concept note of a screenplay with the producer or director of a cinematographic film, desiring to incorporate his story into a film or a screenplay. Therefore, in such cases, entering into a confidentiality agreement protects the interests of an individual who originates an idea.

The role of the Copyright Act, 1957 on confidentiality in media and entertainment industry 

As per the Indian Copyright Act, 1957, copyright vests in the expression a of work and is not a right vesting only upon ideas. There exists no copyright in ideas and only in the material expression of the ideas. A renowned case in this regard is that of RG Anand v. Delux Films (1978), wherein the plaintiff, an author of the play ‘Hum Hindustani’, was approached by the defendant, Mohan Sehgal, who desired to make a movie based on the play and the plaintiff had then discussed the entire play with the defendant. The plaintiff later got to know that the defendant released a movie ‘New Delhi’, and the plaintiff argued that the story of the film was based on his play. The plaintiff therefore filed a suit claiming copyright infringement against the defendant and demanded for permanent injunction against the movie and damages from the defendant. The Supreme Court of India had held that the defendant’s movie could not be considered to be an infringement of the script of the play written by the plaintiff, since the ideas behind both the stories may be the same, however, the expression of both the works was immensely different from each other. Therefore, there was no copyright infringement of the plaintiff’s work.

In the case of Mansoob Haider v. Yash Raj Films Pvt. Ltd. & others (2014), the plaintiff, a professional film script writer and author of the film script titled ‘ONCE’ claimed that the film ‘Dhoom 3’ of the defendant contravened the plaintiff’s copyright in his script and also alleged that he had submitted his copyright protected script to the defendant. The plaintiff sought for credit in the title of the film and pleaded for an interim injunction against release of the film via satellite broadcast. The court held that the plaintiff could not meet the requirements for interim relief in  his favour for violation of his literary copyright and he could also not prove that his script was seen by the defendant.

In these cases, the plaintiffs had entered into a confidentiality agreement with the defendant at the time of discussion of their play/script with the defendant, the written confidentiality agreement would have acted as an evidence and a deterrent against use of the idea of the play/script by the defendant and the plaintiff would have been able to claim damages against of the breach of confidentiality agreement, even though elements constituting copyright infringement could not be proved by the plaintiffs.

As per Section 16 of Copyright Act, 1957, “no person shall be entitled to copyright or any similar right in any work, whether published or unpublished, otherwise than under and in accordance with the act, or of any other law for the time being in force, but nothing in this section shall be construed as abrogating any right or jurisdiction to restrain a breach of trust or confidence.”  This provision therefore implies that while the copyright law protects an original expression of an idea, the law does not prohibit or restrain any actions on part of the owner of the copyright to prevent breach of trust/confidence, in cases when their expressed idea has been communicated to a third party.

In the case of Tarun Wadhwa v. Saregama India Ltd. & Anr (2021), the Bombay High Court dealt extensively into legal principles governing breach of confidentiality in copyright cases. The plaintiff, an amateur filmmaker had conceptualised a synopsis on a zombie comedy, under title ‘Haila! Zombie’ and has shared the synopsis with defendant, Saregama. The plaintiff’s cause of action arose when he found that the defendant had announced production of its film ‘Zombivli’, claiming that the defendant had incorporated the synopsis of the plaintiff in its film.

The court delved into the jurisprudence of confidentiality, wherein the court observed that when a confidential information is shared with an individual, wherein it is proved that such individual had notice, explicit or implicit and had also agreed to the fact that the information was indeed confidential, then in such cases, there arises an obligation on part of the such individual to maintain confidentiality with respect to such information. The confidential information must be proprietary and original. Any confidential information is always outside the public domain. The court opined that all the above elements must co-exist. 

In Zee Telefilms Ltd v Sundial Communications Pvt Ltd & Ors (2003), the court of law had held that in a breach of confidence action, the plaintiff must,

1. Be able to clearly identify the information which has been leaked;
2. Establish that the information was expressed in confidence;
3. Prove that the information was to be treated as confidential; and
4. Prove that it was used or threatened to be used without the plaintiff’s consent.

In the above cases, the court dealt with elements of confidentiality, and what constituted its breach.

Exceptions to confidentiality agreement

It must be noted that there may be some exceptions to the information which can be considered as confidential and can be excluded from being classified as such in confidentiality agreements. Such information, which is already in the public domain, can be treated as an exception to the confidentiality agreement. Further, any information which is disclosed by a party before entering into a confidentiality agreement, any information which has been provided by any third party, wherein such third party was under no obligation to confidentiality or had the right to disclose such information or any information obtained by lawful means before entering into such agreement, can be excluded from being classified as confidential information.

Crucial clauses in a confidentiality agreement

Drafting a confidentiality agreement requires thorough attention to detail, so as to leave no space for ambiguity. Some of the important clauses within a confidentiality agreement have been explained below:

1. Definition clause, which clearly sets out what information is to be treated as confidential and which information is open to the public.
2. Recital clause, wherein both the disclosing and receiving parties are clearly introduced, and any representative or third party who shall have access to such confidential information is clearly mentioned.
3. Terms of confidentiality, wherein the parties are required to clearly indicate the date on which the confidential information will be shared and the time period during which confidentiality must be maintained.
4. Use of confidential information must be clearly stated, indicating the purpose for which the information can be used as well as the name of the third party who shall use such information.
5. Legal disclosure clause, which states that in event the receiver of the information is required to disclose the confidential information due to a court order or a government enquiry, such disclosure shall not amount to violation of the agreement.
6. The agreement should also include a remedy clause acceptable to both parties in case of breach of confidentiality.
7. A jurisdiction clause, establishing the court that shall have jurisdiction to adjudicate conflicts, in case of a breach of confidentiality.
8. A non-binding clause, stating that the agreement would not bind either of the parties on a permanent basis and parties shall have a right to withdraw from the agreement at any point.

Conclusion

Protection of one’s own privacy is imperative for all creatives working in the media and entertainment industry. Therefore, familiarising yourself with the key legal aspects is crucial in order to avoid undue disclosure of confidential information to the public. A confidentiality agreement is no guarantee that one’s original ideas will not be misappropriated, however, there are a number of good reasons for insisting upon such an agreement. Firstly, it demonstrates to the receiving party that the disclosing party is serious about protecting its rights. Secondly, it clarifies the subject matter and scope of protection. Thirdly, it creates enforceable rights in case of breach.

References 

1. https://sprintlaw.com.au/articles/nda-entertainment-industry/.
2. https://www.investopedia.com/terms/c/confidentiality_agreement.asp.
3. https://www.mondaq.com/india/copyright/536650/idea-expression-dichotomy-under-copyright-law.
4. https://iprmentlaw.com/2021/11/14/confidentiality-and-copyright-infringement-interesting-observations-from-the-bombay-high-court-tarun-wadhwa-vs-saregama-india-limited/

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