“We have now been analysing the bioassay data on the net, and they are indeed very interesting. It seems likely that we can beat Olyset by far!”
“One of the most critical success factors for a new company is how we overcome the competition clause in [Mr Larsen’s] employment contract with [Vestergaard]. There are basically 2 scenarios: A. [Mr Larsen] gets fired from [Vestergaard]. In this case there are no problems. B. [Mr Larsen] has to resign from [Vestergaard]. In this case he will be formally restricted from working in areas that are in competition with [Vestergaard].”
“a. the [LIN] First Formula Nets Report on samples sent to [LIN] in December 2004; b. the results of the first series of tests in Burkina Faso on samples made in October 2004 and January 2005 including First Formula net samples; c. the results of the Statistix exercise carried out in July 2005 on the partial results (up to 21 washes) of those Burkina Faso tests; d. the results of the [LIN] regeneration tests on samples 108 … and 109 … showing that the regeneration time was too slow; e. some results from the second series of Burkina Faso tests on the second batch of samples including samples 108 and 109; f. No test results from either Burkina Faso or the Montpellier Lab on nets to the Later Formula recipe.”
“For a period of 12 months after termination of the employment, the Production Manager shall not directly or indirectly carry out any competing business or accept any employment with or consultancy services to any competing business. Competing business means a business carrying out trade with donors and retail markets within disease-control textiles/plastic and/or insecticide-treated textiles/plastic products, and any other business which the company may carry out at the time of the employment.”
“In this case, the Court finds that according to the testimonies given, the Defendant, while still employed with the Plaintiff, was working for Intection A/S beyond what was permissible under his duty of loyalty, and that he continued work as a consultant under circumstances contrary to the agreed non-competition clause, in that his activities as a consultant to Intection A/S overstepped the boundaries for preparation and future competing business as they are accepted in practice. In that connection the Court finds it important… that the Defendant contributed to the development of products within the same type of mosquito nets etc. as the Plaintiff traded in, and that the Defendant assisted in Intection A/S’s marketing efforts and bidding for the order of water filters to the Carter Center in direct competition with the Plaintiffs.”
“(i) recipes for PE yarns and nets and (ii) the results of tests on such yarns and nets. The specific information which [Vestergaard] contends has been misused consists of the recipes and results for samples 7 – 16, and in particular samples 8, 9 and 13. [Vestergaard] also relies upon the information which can be derived from the results recorded in the database, such as what they reveal about the effect [of] between [Additives A and C] on [REDACTED].”
“That is why the recipes were of value and why they enabled Dr Skovmand to make good guesses as to a formulation for Netprotect.”
“In my judgment it follows from my previous conclusions that Dr Skovmand did misuse the information in the Fence database, in particular the information relating to samples 7 – 16 and more particularly the information relating to samples 8, 9 and 13, by using it to devise the initial Netprotect recipes which were tested in October 2004.”
“Although I have concluded that Dr Skovmand misused [Vestergaard’s]’s trade secrets, he did not simply copy any particular recipes. Moreover the misuse of [Vestergaard’s] trade secrets I have found was merely the starting point for a substantial program of further development which resulted in a formulation which is different from any of [Vestergaard’s] recipes in a number of respects, and in particular (i) the polymer composition (at least in the case of the samples submitted for WHOPES II evaluation), (ii) the inclusion of [Additive L] and (iii) the inclusion of [Additive M]. In addition, a substantial period of time has elapsed since then.”
“107. I accept [Vestergaard’s] case to the extent that I consider that the manufacture and sale of the Netprotect product launched by the Defendants in October 2005 did amount to misuse of [Vestergaard’s] trade secrets. This is because it was made in accordance with the [First Formula] (that is to say, a formulation which was close to some of the [Vestergaard] recipes in the Fence database and which the information in the database indicated would be well worth trying, which formed part of the October 2004 trials and which was the Defendants' reference formulation for their development work) and differed little from [Vestergaard’s] recipes in terms of polymer composition and other additives. 108. By contrast, I consider that the manufacture and sale of mosquito nets made in accordance with the formulation submitted by Bestnet for WHOPES II evaluation does not amount to misuse of [Vestergaard’s] trade secrets, although that formulation derived from such misuse. This is partly because it was a [Later Formula] formulation, which is further away from [Vestergaard’s] recipes. More importantly, as counsel for the Defendants submitted, I have already found that this formulation differed from any of [Vestergaard’s] recipes, in particular in terms of its polymer composition, inclusion of [Additive L] and inclusion of [Additive M]. Counsel for [Vestergaard] relied upon Dr Skovmand's evidence that it was “not very different”; but in my judgment it was different enough. 109. I also consider that, contrary to the submission of counsel for [Vestergaard], the passage of time since October 2004 is of relevance. Although this is not a case in which the confidential information could be readily ascertained by reverse engineering (some information can undoubtedly be obtained by chemical analysis, but the Defendants have not suggested that the precise recipe could be ascertained), the identities of the three principal additives can be obtained from public domain sources and suitable proportions of them can be worked out by trial and error, which after all is what Dr Skovmand did. Thus I am confident that an independent consultant could have come up with similar recipes after the expenditure of a certain amount of time and effort. By misusing VF's trade secrets, Dr Skovmand saved the Defendants that time and effort. As indicated above, it seems to me that this is a relevant consideration even where the confidential information has neither been published nor is readily ascertainable from public domain sources.”
“The passage of time is likewise relevant. After all what the defendants did was to cut a corner, getting on the market earlier than if they had not misused confidential information. Mr Gary Howe, in cross examination, had accepted that scientifically the defendants could have developed their product independently - time was saved and perhaps not a very great deal of it. By the time of the WHOPES I product the head start had much less significance. That was a matter which the judge was properly entitled to take into account.”
“As in the case of any other tort (leaving aside cases where exemplary damages can be given) the object of damages is to compensate for loss or injury. The general rule at any rate in relation to “economic” torts is that the measure of damages is to be, so far as possible, that sum of money which will put the injured party in the same position as he would have been in if he had not sustained the wrong. (Livingstone v Rawyards Coal Co(1880) 5 AC 25 , 39 per Lord Blackburn.)”
“Sometimes defendants have sought to evade substantial liability by contending that they could have avoided infringement, for instance by using some other equally efficacious but non-infringing device. They suggest that they could have inflicted the same economic “injury” by lawful competition. The courts have consistently rejected this approach. The rejection follows from the compensation principle. One is concerned with compensation for what the defendant has done by acting “improperly”
“It appears to be beside the mark to say that the Respondents might have arrived at the same result by lawful means and that, without infringing the appellants’ rights, they might have produced a nail which would have proved an equally dangerous rival to the Globe nail. The sole question is, what was the loss sustained by the Appellants by reason of the unlawful sale of the Respondents’ nails?”” “It appears to be beside the mark to say that the Respondents might have arrived at the same result by lawful means and that, without infringing the appellants’ rights, they might have produced a nail which would have proved an equally dangerous rival to the Globe nail. The sole question is, what was the loss sustained by the Appellants by reason of the unlawful sale of the Respondents’ nails?””
“344.The law relating to breach of confidence covers a very wide range of different factual situations, and it is unsurprising that the strength of the arguments in favour of any particular remedy or set of remedies in respect of a particular breach of confidence varies across that range. Sometimes the nature of the obligation of confidence may be closely similar to a fiduciary obligation (as in the special context of obligations imposed on officers of the Secret Intelligence Service in Blake’s case), in which case it may be appropriate for remedies to be available similar to those in respect of a breach of fiduciary duty; sometimes the nature of the obligation may be closely similar to the obligations which protect forms of intellectual property (as in Peter Pan Manufacturing Corpn v Corsets Silhouette Ltd[1964] 1 WLR 96 and Seager’s case), in which case it may be appropriate for remedies to be fashioned equivalent to those available in that context; sometimes (as observed by Lord Nicholls in Blake’s case) the obligation may spring from a contract, or arise in circumstances closely similar to a contractual relationship, in which case the appropriate remedy (in the absence of exceptional circumstances) is likely to be similar to those available for breach of contract; in yet other cases, e.g. where the law of confidence is used to address use of private information obtained by a stranger, a relevant analogy may be drawn from the law of tort.”
“Rules which make the wrongdoer liable for all the consequences of his wrongful conduct are exceptional and need to be justified by some special policy. Normally the law limits liability to those consequences which are attributable to that which made the act wrongful.”
“An employer like anyone else is entitled (all usual defences aside) to restrain unauthorised disclosure of information which, in the Coco v Clark sense is confidential. On the other hand, for public policy reasons, an employee is entitled to use and put at the disposal of new employers all his acquired skill and knowledge. That is so, no matter where he acquired that skill and knowledge and whether it is secret or was so at the time he acquired it. Where the employer's right to restrain misuse of his confidential information collides with the public policy, it is the latter which prevails. The critical question is how to distinguish information which can be treated as an employee’s acquired skill and knowledge from that which is not. As the Court of Appeal pointed out in Lancashire Fires, that may be a difficult borderline to detect and where it lies will depend on the particular facts of the case.”
“If the information in question can fairly be regarded as a separate part of the employee’s stock of knowledge which a man of ordinary honesty and intelligence would recognise to be the property of his old employer, and not his own to do as he likes with, then the court, if it thinks that there is a danger of the information being used or disclosed by the ex-employee to the detriment of the old employer, will do what it can to prevent that result by granting an injunction.”
“112. What then is the proper approach? I consider that the two-fold approach put forward by the Defendants is a fair and proportionate approach. One head of damage should be a lump sum, quasi-consultancy fee to reflect the extent to which the sales of Later Formula nets were brought about by the use of the confidential information by the Defendants. In order to decide how much this should be, one needs to consider how closely linked the Later Formula is to the First Formula and in what other ways the Defendants made use of that information, beyond simply building on the experimental results in the Fence database to arrive at the Later Formula. 113. The second head of damage is a payment of compensation in respect of sales made in any period when the Defendants were on the market selling Netprotect when they would not have been on the market if they had not misused VF's confidential information.”
“In the light of that I conclude that if the WHOPES I test results had only been available in March or April 2007, it is still likely that the WHOPES II testing would have occurred at the same time it occurred in the real world, during the mosquito seasons in Burkina Faso and Tanzania. There would have been no need for a pause of five or six months between the two phases of testing to await the 2007 mosquito season. I recognise that the period of delay in the real world between13 September 2006 and March 2007 was used by the Defendants further to refine the recipe for Netprotect and that the samples submitted for WHOPES II testing in March 2007 were to a different formula from those subject to WHOPES I testing. But there is no reason to suppose that the WHOPES I version of the Later Formula would have performed less well in the field tests than the WHOPES II version of the Later Formula nets.”
“217. I bear in mind the very unsatisfactory way in which the exercise of showing which nets were made to which recipe was carried out by the Defendants in purported compliance with the court's orders. Given my findings in relation to the large IDA order, I consider that it is likely that all the sales recorded on Mrs Sig's spread sheet up to and including the line recording IDA's order of 121,828 were of nets made to the First Formula. Thereafter they were nets made to the Later Formula or subsequent formulae.”