Case 12

A is a major manufacturer of computers. B, who has recently established his business of design and manufacture of computer components, approaches him and tells him that he has designed a new form of computer chip which will allow hand-held computers to be produced to run at twice the current speed. A tells B that he is interested in the details, because he may wish to introduce the chip into his new model of computers, and they begin negotiations with a view to contracting for B to manufacture the computer chips for A. During the negotiations A asks for, and B gives, information about the detail of the design of the computer chip which A says he needs in order to evaluate whether the chip will be suitable for his computers. The design is not yet protected by any intellectual property rights (such as patent). After some time, A says that the price B is proposing is too high, and breaks off the negotiations; he then approaches C, asking C to produce the same kind of computer chip at a lower price than B had been asking. A passes on to C the design information he had received from B. C agrees to produce the chips, and a contract is formed between A and C for their production. What liability (in contract, tort, restitution, or any other form of liability), if any, does A have to B?