It is accepted wisdom that, in the field of the environment, improved access to information and public participation in decision making enhances the quality and the implementation of decisions, contributes to public awareness of environmental issues and gives the public the opportunity to express its concerns and take part in the debate. That wisdom is enshrined in the Aarhus Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters1 to which both the EU and the UK are signatories.
However, there is a natural tension between openness and transparency in decision making and the protection of commercially sensitive information such as pricing structures or intellectual property. This area of the law is still evolving and the boundaries are only just emerging as a body of case law fleshes out the principles. Businesses and in-house lawyers need to understand the risks, and opportunities, that this area of law presents.
In The In-House Lawyer 178 we discussed the operation of the regimes permitting access to information in the UK: the Freedom of Information Act (FoIA) 2000 and the Environmental Information Regulations (EIR) 2004, and we provided some practical tips. This article focuses on two important cases on the EIR 2004 and, in particular, the operation of two exceptions contained in regulation 12:
‘5) For the purposes of paragraph (1)(a), a public authority may refuse to disclose information to the extent that its disclosure would adversely affect:
[…]
c) intellectual property rights;
[…]
e) the confidentiality of commercial or industrial information where such confidentiality is provided by law to protect a legitimate economic interest.’
THE CONFIDENTIALITY EXCEPTION
The most recent case to consider the issue is Roy Jones (on behalf of Swansea Friends of the Earth) v Information Commissioner, Environment Agency and S I Green (UK) Ltd [2012].
The case concerned the financial security provisions required under the UK’s implementing regulations for the EU Landfill Directive (now contained in the Environmental Permitting (England and Wales) Regulations 2010). The UK regulations require the landfill operator to provide financial security for the period of operation of the landfill and for 60 years after its closure. The purpose is to ensure that funds are available to the Environment Agency to remedy issues that arise at the landfill in the event that the operator is unwilling or unable to do so itself. Often the security is provided in the form of a performance agreement and a bond in favour of the Environment Agency. The amount of security is site specific and is a matter of negotiation between the Environment Agency and the operator.
S I Green (UK) Ltd applied for a permit to landfill a disused quarry near Swansea in Wales and it negotiated security with the Environment Agency Wales in the usual manner. The applicant, Mr Jones, applied for information relating to the landfill and was supplied with a number of documents including the performance agreement and bond but with the financial information redacted. Mr Jones complained to the Information Commissioner (IC) but the IC dismissed the complaint on the grounds that the exception in regulation 12(5)(e) had been properly applied.
The applicant appealed to the First-Tier Tribunal (Information Rights). The key issue was whether the confidentiality of the information was ‘provided by law’.
The Tribunal relied on the articulation of the English law of breach of confidence set out in a case from the 1960s, Coco v AN Clark (Engineers) Ltd [1968]: the information must be confidential in quality, it must be imparted so as to import an obligation of confidence, and there must be an unauthorised use of that information to the detriment of the party communicating it. The Tribunal concluded that, because the financial information was obtained through negotiation between the Environment Agency Wales and S I Green, it had not been ‘imparted’ so as to import an obligation of confidence and as such was not subject to confidentiality provided by law.
The Tribunal also rejected an argument that the confidentiality was created by the UK regulatory regime. The Environmental Permitting Regulations and its predecessors allow operators to agree that certain information is confidential and should be withheld from the Environment Agency’s public registers. S I Green has specifically asked for other information within its application to be treated as confidential but (tellingly, as far as the Tribunal was concerned) it did not make this request for the financial information in the bond and performance agreement.
The Tribunal also rejected S I Green’s argument that the financial information could be ‘reverse engineered’ to enable competitors to calculate its business model.
The Tribunal concluded that the purpose of the financial provisions was to ensure that there were adequate funds to protect the public in the event of an environmental issue at the landfill in the future and therefore it was important for the public to have access to that information.
Unfortunately, the reasoning behind the decision is not convincing and is at odds with other decisions of the Tribunal.
The Tribunal appears to have taken the test in Coco as a definitive statement of the law without looking at the cases on confidentiality over the past 40 years. The Tribunal took a similar position in an FoIA 2000 case (Home Office v BUAV & ICO [2008]) a few years ago and was subject to criticism for doing so on appeal in the High Court. On appeal, Mr Justice Eady stated:
‘The Tribunal… proceeded on the assumption that “the law of confidence” was to be found only in… Coco v Clark… with respect, however, this does not seem to me to be necessarily the case. Much will depend on context.’
Has the Tribunal in Jones repeated this mistake? The Tribunal does not appear to have considered the other ways in which English law protected confidential information. Nor did it consider the impact of human rights jurisprudence – confidential information is a ‘possession’ and therefore subject to Article 1 of the First Protocol to the European Convention on Human Rights (see for example the case of Veolia ES Nottinghamshire Ltd v Nottinghamshire County Council [2010]).
Jones is also at odds with an earlier decision of the Tribunal in South Gloucestershire CC v IC and Bovis Homes [2009], in which the Tribunal concluded that a public authority’s own information could attract the protection of the law of confidence notwithstanding the fact that it was its own information, and therefore had not been imparted by a third party as required by Coco.
Jones is on appeal and the Upper Tribunal will hear the case in March 2013. It is anticipated that these arguments will be aired in detail.
THE INTELLECTUAL PROPERTY RIGHTS EXCEPTION
The tension has been examined in detail in The Office of Communications v The Information Commissioner [2009] (The Ofcom case).
The case concerned access to information on the precise location (including grid reference numbers) of base stations for the mobile telephone network. Following concerns about the health risks of electromagnetic radiation, the Office of Communications (Ofcom) established its Sitefinder website enabling people to discover whether there is a base station in a particular area by imputing a postcode, town name or street name and examining a map with the approximate locations of the base station. To create this website, the commercial mobile network operators (MNOs) provided datasets with all of the grid references for all base stations to Ofcom on the voluntary basis. Ofcom was also provided with the locations for all of the base stations used by the emergency services’ ‘TETRA’ network.
It was accepted that the MNOs had a database right in the information it submitted to Ofcom and it had done so on a voluntary basis. The scope to which Ofcom used that data in its Sitefinder website had been subject to rigorous debate at the time that the site was created. As a result, the Sitefinder website does not give the address of the base station or its postcode, national grid reference or latitude/longitude co-ordinates and it does not indicate whether the base station is mounted on a particular building or structure.
On 11 January 2005, Health Protection Scotland (an arm of the National Health Service) requested a list of all mobile phone base stations on the database in a form which it could use for epidemiological research. Ofcom refused on the grounds that the information was already substantially available on the Sitefinder website but the applicant challenged this decision on the grounds that the information was not in a format which enabled it to utilise it for research.
Ofcom reviewed the decision and upheld the refusal on two grounds. The first was under regulation 12(5)(a) on the grounds that criminal enterprises may be able to target those sites used by the police and this would have an adverse effect on public safety. The second was under regulation 12(5)(c) on the basis that disclosure would adversely affect the intellectual property rights of the MNOs who had provided the information to Ofcom on a voluntary basis and who would otherwise be able to obtain licence fees for use of the information.
The matter proceeded to the Information Commissioner, then to the Information Tribunal (now called the First-Tier Tribunal (Information Rights)), then to the High Court and again to the Court of Appeal. The question for the Court of Appeal was: did the Tribunal fall into error by taking into account, as an aspect of the public interest in disclosure, the ‘benefit’ arising from the use of the information for epidemiological research, even though such use would breach the intellectual property rights of the MNOs?
Ofcom’s argument was that the Tribunal had erred in its substantive finding that disclosure of the databases would be a value in epidemiological investigations because it could be ‘searched, sorted or otherwise manipulated for statistical and illustrative purposes’ (paragraph 41 of the Tribunal’s decision). The ‘manipulation’ which the Tribunal had held to be of value to the public when conducting the public interest test was by its very nature a breach of the intellectual property rights of the MNOs and was therefore unlawful. Ofcom contended that it was not open to the Tribunal to rely on an unlawful breach of intellectual property rights as giving rise to a public interest benefit that would then weigh in favour of disclosing the information protected by that right. It was argued that it cannot be in the public interest that recipients of information are assumed to benefit the public through a subsequent unlawful infringement of third parties’ intellectual property rights. It was also argued that it was against public policy for a public authority to facilitate a breach of the rights of third parties. Further, intellectual property is ‘property’ within the meaning of Article 1 of the First Protocol of the European Convention of Human Rights and as such public authorities must act in a manner consistent with the Human Rights Act 1998.
The Court of Appeal agreed that the contemplated use of the information for epidemiological research would constitute a prima facie infringement of the intellectual property rights in question.
The Court of Appeal noted that there was nothing in the EIR 2004 that would preclude reliance by the MNOs on their rights to prevent or restrict post-disclosure use of the information disclosed. Therefore, the MNOs could take action against the recipient of the information if the data sets were manipulated for epidemiological research. However, it was also acknowledged that, in practice, this would be difficult, especially for electronic data that could be manipulated in such a way that it would be difficult to trace those responsible for the manipulation and to enforce the right against them.
However, ultimately the Court of Appeal did not agree with Ofcom’s argument. Giving the leading judgement, Lord Justice Richards said:
‘… in the case of the EIR, since an adverse effect on intellectual property rights is the subject of a specific exception under regulation 12(5)(c), it is obvious that breaches of intellectual property rights can and must be taken into account both by determining the application of the exception and in assessing, under regulation 12(1)(b), the public interest in maintaining the exception. It is plain, too, that regard can and must be had not just to the immediate effect of disclosure, but also to its wider consequences, including subsequent use of the information disclosed: it was the adverse effect of subsequent use for epidemiological research that was at the heart of the Tribunal’s finding that the intellectual property rights exception applied in this case. But if such use also has beneficial consequences, furthering the policy of the disclosure regime (as was also the case on the Tribunal’s findings here), in my view it is implicit in the EIR that such consequences can be taken into account on the other side of the balance as an aspect of the public interest in disclosure’.
The Court of Appeal judgment is significant. Private sector businesses providing environmental information to a public authority under a licence for the public authority to use the intellectual property are at risk of the disclosure of that intellectual property to third parties under the EIR 2004. The applicant who receives that information does not have a right to use it – the intellectual property rights remain in the possession of the private sector business – but the practical ability to enforce a breach is limited.
That was not, however, the end of the story. The Ofcom case raised another important point of law: to what extent can a public authority aggregate the public interest in refusing disclosure from different exceptions and weigh them together against the public interest in disclosure? The Supreme Court referred this question to the European Court of Justice who confirmed that it was permissible to ‘take into account cumulatively a number of grounds for refusal’. The case was remitted to the First-Tier Tribunal (Information Rights) and on 12 December 2012 the Tribunal released its written decision concluding that the information must be disclosed. In January 2013 Ofcom sought permission to appeal and a decision is awaited.
More than eight years has passed since Health Protection Scotland made its initial request.
RISK OR OPPORTUNITY?
It is not uncommon for the business community to consider the law on access to information in predominantly negative terms because of the threat posed to its own information. However, the law on access to information can also provide an opportunity for companies to obtain valuable information about their competitors, customers, suppliers and wider interest groups, and regular requests are made on behalf of companies to obtain information for commercial purposes.
Individuals, non-governmental organisations and some companies are alive to the opportunities that the law provides to access environmental information and the attempts to access that information are often innovative and creative. Businesses need to be aware of the limitations in the ‘commercial interests’ exception under the EIR 2004 and the fact that intellectual property provided under licence to a public authority might be disclosed to the public, at which point enforcement of those intellectual property rights might become more difficult. Some steps can be made to protect commercially sensitive environmental information provided to public authorities but risks remain.
Note
- UNECE Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters, Aarhus, Denmark, 25 June 1998