“The cannibalisation comes from the fact that the strength of our portfolio, our revenue and generation is largely allocated to the global reports. Those are huge reports and we are able to capture a much wider customer base with them. The regional reports reach a limit very quickly and when they reach that limit in saturation and market point, we struggle with profitability. Q. Sorry? A. That is because -- if you take, for example, the Brazil reports. It has struggled to get anywhere close to$200,000 , it has been losing money and we also have two editorial resources devoted to it. That is two people working on it full-time, plus the port from the Houston office and that is without including cost allocations for production, for data and for other support teams on it. So it is very difficult to maintain and we do risk cannibalisation. I had a conversation with sales just last week about they were concerned selling certain products to customers because it would cannibalize that Brazil report.”
“Now I am developing a different model to Argus where I plan to publish hybrid publications with consulting and pricing on regions/products that Argus do not cover (as previously mentioned)”
“Q. So, this gives the impression, doesn't it, that you are joining two other guys who have a group already. A. Reading exactly on this, on a group, yes. It's -- for me it was a figure of speech, what I'm saying that these guys -- two guys are not a group. It's obvious in that sense, but in this sentence that's what it says, yes. Q. It is your words. You are giving the impression that you were joining something existing, aren't you? A. I said I've joined a couple of other guys that are trying different ideas. Q. Yes, and you are bringing something new to their group. A. Correct, so I was the one that is going to be doing on fertilisers. Q. Yes, but in fact what we know is that you had set up a new company of your own, Afriqom, correct? A. Correct. Q. Which you described as -- you are a one-man band in that. That's what your evidence says. A. And still -- and I'm still describing it as it is. Q. Yes, so it wasn't true, was it, for you to say that you were joining a couple of other guys? You were setting up your own business. A. My own business with these two other guys and that's their involvement in them being part of this, this venture. Q. But the only involvement, as I understand it now, I appreciate you don't want to tell the court about it, but the only involvement of any other guys is people who are investors and shareholders. A. Absolutely correct. Q. So, you are not carrying on business with any other guys. A. By carrying on business -- Q. They are not involved in Afriqom and won't be. A. No, they're not.”
“Q. The only reason that Mr Binks asked you if Mr Halim was joining Acuity was because you had said he was going to a start-up PRA in the fertiliser sector? A. No, I did not. I have repeated this several times. I said to Mr Binks actually it was the conversation with Mr Binks was effectively replaying the conversation I had with Mounir. And I said he was going to a two-person start-up that had been in operation for two years which since turns out is exactly the profile of Acuity. Q. You didn't say to Mr Binks that he was not going to be competing? A. Yes, I said he would not be competing. Q. You said he wasn't going to be competing? A. Yes. Q. So why would Mr Binks have asked if he was joining Acuity then? A. Because I think, and I can't speak for him directly but the profile of a twoperson start-up that had been operating for two years, sounds very much like Acuity, as far as I understand. Q. But if you said that he was not going to be competing, Mr Binks is not going to ask you if he is going to Acuity which is a direct competitor, isn't it? A. He asked me the question and I said, "he can't be because he's not going to be competing", so I assumed the profile of the company struck a chord with Adrian, in that it is the same profile, been operating for two years, two people.”
"The defendant was in fact employed for over six years by the plaintiffs and no doubt became a valuable servant and acquired considerable knowledge of and personal relation with the plaintiffs' customers. It is natural in those circumstances to tend to look at what in fact happened under the agreement. But the question of the validity of a covenant in restraint of trade has to be determined at the date at which the agreement was entered into and has to be determined in the light of what may happen under the agreement, although what may happen may cover many possibilities which in the result did not happen. A covenant of this kind is invalid ab initio or valid ab initio. There cannot come a moment at which it passes from the class of invalid into that of valid covenants."
"(1) The court will never uphold a covenant taken by an employer merely to protect himself from competition by a former employee. (2) There must be some subject matter which an employer can legitimately protect by a restrictive covenant. As was said by Lord Wilberforce in Stenhouse Ltd v Phillips[1974] AC 391 at p.400E (cited by Slade L.J. in the Office Angels case[1991] IRLR 214 , supra): 'The employer's claim for protection must be based upon the identification of some advantage or asset inherent in the business which can properly be regarded as, in a general sense, his property, and which it would be unjust to allow the employee to appropriate for his own purposes, even though he, the employee, may have contributed to its creation.' (3) Protection can be legitimately claimed for identifiable objective knowledge constituting the employer's trade secrets with which the employee has become acquainted during his employment. (4) Protection cannot be legitimately claimed in respect of the skill, experience, know-how and general knowledge acquired by an employee as part of his job during his employment, even though that will equip him as a competitor, or potential employee of a competitor, of the employer. (5) The critical question is whether the employer has trade secrets which can be fairly regarded as his property, as distinct from the skill, experience, know-how, and general knowledge which can fairly be regarded as the property of the employee to use without restraint for his own benefit or in the service of a competitor. This distinction necessitates examination of all the evidence relating to the nature of the employment, the character of the information, the restrictions imposed on its dissemination, the extent of use in the public domain and the damage likely to be caused by its use and disclosure in competition to the employer. (emphasis added) (6) As Staughton L.J. recognised in Lansing Linde Ltd[1991] IRLR 80 … the problem in making a distinction between general skill and knowledge, which every employee can take with him when he leaves, and secret or confidential information, which he may be restrained from using, is one of definition. It must be possible to identify information used in the relevant business, the use and dissemination of which is likely to harm the employer, and establish that the employer has limited dissemination and not, for example, encouraged or permitted its widespread publication. In each case it is a question of examining closely the detailed evidence relating to the employer's claim for secrecy of information and deciding, as a matter of fact, on which side of the boundary line it falls. Lack of precision in pleading and absence of solid evidence in proof of trade secrets are frequently fatal to enforcement of a restrictive covenant…"
"...In assessing reasonableness, there is essentially a three-stage process to be undertaken. [1] Firstly, the court must decide what the covenant means when properly construed. [2] Secondly, the court will consider whether the former employers have shown on the evidence that they have legitimate business interests requiring protection in relation to the employee's employment. In this case, as will be seen later on, the defendant concedes that TFS have demonstrated on the evidence legitimate business interests to protect in respect of customer connection, confidential information and the integrity or stability of the workforce, although the extent of the confidential information is in dispute in relation to its shelf life and/or the extent to which it is either memorable or portable. [3] Thirdly, once the existence of legitimate protectable interests has been established, the covenant must be shown to be no wider than is reasonably necessary for the protection of those interests. Reasonable necessity is to be assessed from the perspective of reasonable persons in the position of the parties as at the date of the contract, having regard to the contractual provisions as a whole and to the factual matrix to which the contract would then realistically have been expected to apply."
“It is thus established that an employer can stipulate for protection against having his confidential information passed on to a rival in trade but experience has shown that it is not satisfactory to have simply a covenant against disclosing confidential information. The reason is because it is so difficult to draw the line between information which is confidential and information which is not and it is very difficult to prove a breach when the information is of such a character that a servant can carry it away in his head. The difficulties are such that the only practicable solution is to take a covenant from the servant by which he is not to go to work for a rival in trade. Such a covenant may well be held to be reasonable if limited to a short period.”
“41. In order to establish that the inclusion of a non-competition clause in an employment contract was reasonably necessary for the protection of the employer’s interest in confidential information, the first matter which the employer obviously needs to establish is that at the time of the contract the nature of the proposed employment was such as would expose the employee to information of the kind capable of protection beyond the term of the contract (i.e. trade secrets or other information of equivalent confidentiality). The degree of the particularity of the evidence required to establish that matter must inevitably depend on the facts of the case. To say this is to say nothing new. Aldous LJ stated the principle in Scully UK Ltd v Lee[1998] IRLR 263 at 23: ‘In cases where a restrictive covenant is sought to be enforced, the confidential information must be particularised sufficiently to enable the court to be satisfied that the plaintiff has a legitimate interest to protect. That requires an enquiry as to whether the plaintiff is in possession of confidential information which it is entitled to protect. (See Littlewoods Organisation v Harris[1977] 1 WLR 1472 at 1479F). Sufficient detail must be given to enable that to be decided but no more is necessary.” 42. Provided that the employer overcomes that hurdle, it is no argument against a restrictive covenant that it may be very difficult for either the employer or the employee to know where exactly the line may lie between information which remains confidential after the end of the employment and the information which does not. The fact that the distinction can be very hard to draw may support the reasonableness of a non-competition clause. As was observed by Lord Denning MR in Littlewoods Organisation Ltd v Harris[1977] 1 WLR 1472 , 1479, and by Waller LJ in Turner v Commonwealth &British Minerals Ltd[2000] IRLR 114 , para 18, it is because there may be serious difficulties in identifying precisely what is or what is not confidential information that a non-competition clause may be the most satisfactory form of restraint, provided that it is reasonable in time and space.”
“the necessity for non-compete provisions arises where non-solicitation and non-dealing covenants and confidential information restrictions are difficult to police or where there are material disputes as to what information is confidential.”
“… (4) Even if the covenant is held to be reasonable, the Court will decide whether, as a matter of discretion, the injunctive relief sought should in all the circumstances be granted having regard, amongst other things, to its reasonableness at the time of trial. (5) The burden is on the covenantee to establish that the restraint is no greater than reasonably necessary for the proper protection of protectable interests. (6) Reasonable necessity is to be assessed from the perspective of reasonable persons in the position of the parties at the time that the contract was entered into or varied and having regard to the contractual provisions as a whole and to the factual matrix to which the contract would then realistically have been expected to apply”
“Whilst I have no doubt that, as a matter of construction, contact means some substantial contact (not for example a mere handshake) in the course of Mr. Hart's employment, it can plausibly be suggested that the provision would apply even if the contact consisted of, for example, a substantial business discussion of some kind taking place at a conference two or three years before Mr. Hart left ICS, with a customer who subsequently had abortive negotiations with others at ICS.”
“49. For Argus’s business as a PRA, the lifeblood of its business is its (a) client base, (b) product portfolio, and (c) information sources. 50. Given the nature of confidential information that Dr Halim had access to (Williamson 3, paragraph 37) (Kewish, paragraph 25), this was likely to be of significant commercial value to a competitor and justified post-termination protection: 50.1 Client contact and sales information provides a new competitor direct access to a potential market for the sale of price reporting products in the Fertilizer industry. 50.2 Knowledge of a new product development would enable a competitor to market that product for its own business, notwithstanding that the product has been produced by someone else. 50.3 The identity and contact details of information sources assists a competitor particularly a new market entrant) to obtain data from which a reliable market report can be produced. Dr Halim accepts this was confidential [Halim, Day 5, page 33, lines16-24]. Getting information on the African Fertilizer market is more difficult given the nature of the market and having a developed network of sources would “hugely” assist when starting up [Nash, Day 3, page 80, lines1-19].”
“When I'm saying "the Argus way", it means how we look at data sets, and it depends on the data set. It might be pricing, how are we looking at pricing, how are we looking at the methodology that goes into that? You can call data sets bids, offers, transactions, how we have a certain hierarchy of where we place that data. You can look at imports, exports, how we model it for forecasting, what methodologies that go into our forecasting, back testing methods, how we use linear regression, also the Argus way of thinking in terms of price reporting is really, really unique, and it is a very specific way of approaching market trade, commenting on it, analysing it, it's picking up elements of news and policy that is relevant and can shift buyers, sellers, government, all the things that impact economics, that's roughly what I'm referring to. MR JUSTICE FREEDMAN: And how does the Argus employee come to learn the Argus way? A. I would say part of that is through time, part of that is through being with a team that reinforces our way of working, part of that is in dealing with other departments. We have a lot training that goes on, and that training internally is confidential, and I'm pretty sure those are noted as confidential as well. It's training on how we assess, how we launch market reports, it's training on our own business. I think a lot of companies have just very specific ways and habits of approaching their business, and we have a pretty robust process of reinforcing that.”
“It is obvious, for example, that merely making a decision to set up a competing business at some point in the future and discussing such an idea with friends and family would not of themselves be in conflict with the best interests of the company and the employer…At the other end of the spectrum, it is plain that soliciting customers of the company and the employer or the actual carrying on of trade by a competing business would be in breach of the duties of the director and the obligations of the employee. It is the wide range of activity and decision making between the two ends of the spectrum which will be fact sensitive in every case…”
“It is accepted that clause 16.1 only applies, post termination, to restrict D from misusing trade secrets or information of a sufficiently confidential nature to warrant equivalent protection. Construed in this way, the clause aligns with the implied duty of confidence as pleaded at (PoC/6c) and is not a restraint of trade. Even if the clause were found to be unenforceable, D remains bound by the implied duty of confidence in his contract and by his equitable duty.”
“First, where a person has obtained a ‘head start’ as a result of unlawful acts, the Court has the power to grant an injunction which restrains the wrongdoer, so as to deprive him of the fruits of his unlawful acts. This is often known as ‘springboard’ relief. Second, the purpose of a ‘springboard’ order as Nourse L.J. explained in Roger Bullivant v Ellis[1987] ICR 464 is “to prevent the defendants from taking unfair advantage of the springboard which [the Judge] considered they must have built up by their misuse of the information in the card index”
" ... Even if I am satisfied that the defendants, or some of them, have made unlawful use of material belonging to the claimants, that is not enough to found a claim for springboard relief. The claimants must show that the defendants have gained an unfair competitive advantage over the claimants and that that advantage still exists and will continue to have effect unless the relief sought is granted. It is clear from the authorities that the court should exercise considerable caution both as to whether to grant such an injunction at all and, if so, as to its form and duration. In particular, the duration of such an injunction should not extend beyond the period for which the defendants' illegitimate advantage may be expected to continue because such injunctions are granted to protect against and to prevent further loss, rather than being used to punish for past breaches of contract."