This was an appeal to the House of Lords by OK! Magazine (OK) against the decision of the Court of Appeal in Douglas v Hello [2005] EWCA Civ 595, which had reversed the High Court’s decision on OK's breach of confidence claim and the damages awarded to OK.

This long dispute surrounds the publication by Hello Ltd of the unauthorised photographs of the wedding of Hollywood stars, Michael Douglas and Catherine Zeta-Jones, who had given exclusive publication rights in certain photographs approved by the pair to Northern & Shell Plc, publishers of OK, in consideration of £1million. The unauthorised pictures were taken by paparazzi who sold them to Hello, which later published the photographs in its magazines. OK sued Hello for breach of confidence and for the tort of causing loss by unlawful means. The High Court decided in favour of the Douglases and OK, holding that the photographs were confidential information unavailable to public, and that OK had the exclusive right to publish the photographs. This was known to Hello, and the obligation of confidence was binding on Hello. Thus, Hello was liable for the damages arising from its publication of the unauthorised photographs.

On appeal by Hello, however, the Court of Appeal reversed the High Court’s decision to the extent that the obligation of confidence on the part of Hello was limited to the photographs to be published and did not extend to other photographs. Thus, Hello did not infringe OK’s right, but may have infringed the Douglases’ privacy rights.

Most recently, the House of Lords has reversed the Court of Appeal’s ruling on 2 May 2007 in a split decision of 3:2. In his judgment, Lord Hoffmann distinguished the case of Campbell v MGN Ltd [2004] 2 AC 457, which concerned the unauthorised disclosure of personal information based on Articles 8 and 10 of European Convention on Human Rights, from the present case, which concerned OK’s claim to protect ‘commercially confidential information’ within the control of the Douglases. This enabled the imposition of an obligation of confidence in respect of any pictures of the wedding. He further clarified that such right was not an ‘image-right’, but was merely a right OK had to protect information of commercial value over which the Douglases had control and which they had exclusively granted to OK. However, with regards to the issue of causing loss by unlawful means, he held that although the intention to cause loss was present, there was no ‘interference by unlawful means with the actions of Douglases’.

Lord Nicholls, dissenting from Lord Hoffman’s analysis, found that since the content of the unapproved pictures was the same as that of the approved pictures, the information lacked any ‘confidentiality’. This coupled with the fact that the pictures were published following the publication of the approved pictures meant that there was no breach of confidentiality. Lord Walker held that the claim for such confidentiality by the Douglases and OK amounted to a claim for a character or image right, unprecedented in English law. He also dissented from Lord Hoffman’s finding that since the information and the exclusive right had significant market value, they must attract an obligation of confidentiality. Lord Walker emphasized that it was the nature of the information and not its market value which determined the confidentiality of information. This case illustrates that extensive commercialisation of information, albeit in the form of pictures or data, can be protected by the law of privacy and also the law of confidential information

Threats against an allegedly dormant company In Microsoft Corporation v (1) P4 Com Ltd. (2) Dr. Mozaffar Nami [2007] EWHC 746 (Ch), Microsoft had received information relating to the trading of counterfeit software. According to third party invoices, a business entity named Phase 4 had been a trade buyer of counterfeit Microsoft package software. Prices for the counterfeit Microsoft Office Professional were only 10% of the normal distributor rate and were described as being “too good to be true”. The argument thus was that the defendants must have known that they were not buying genuine licensed products.

After a significant amount of correspondence between both parties’ solicitors, in which both parties appeared to assume that P4 Com Ltd had been the entity trading in the allegedly infringing products, Microsoft sued P4 Com Ltd and its director, Dr Nami, for infringement of Microsoft trade marks, copyright and for passing off. The defendants subsequently argued that during the relevant time P4 Com Ltd had in fact been dormant and the second defendant had been operating as a sole trader under the name Phase 4. However, the evidence was contradictory as to whether the company really had been dormant. The defendants also filed a counterclaim alleging that Microsoft had made groundless threats to sue a dormant company based on trade mark infringements and that the defendants had suffered damages, and made an application for summary judgment on their counterclaim.

Mr Justice Rimer dismissed the application for summary judgment and sent the matter for full trial. As the evidence showing whether the defendants had traded as Phase 4 or not during the relevant period was largely in the hands of the defendants, this could only be determined during the disclosure and cross-examination stages.

The decision is interesting as Dr Nami was sued solely on the basis of his directorship of P4 Com Ltd, rather than his relationship with Phase 4. The defendants appeared to try to exploit Microsoft’s omission in taking action against Dr Nami on a personal basis, without success.