Written by Thomas Brereton on 04 July 2009« Return to Reading Room
Claimant - 3 companies, collectively recognized as "Vestergaard Frandsen", had recently developed a highly technical long lasting insecticidalpolyethylene mosquito net. ". They had stored the recipes and investigation results in relation to their polyethylene net development in a database known asthe Fence database.
Defendant - Danish residents Mr. Torben Holm Larsen and Mrs. Trine Sig, previously employees of Vestergaard as head of production and regional sales manager respectively, had left Vestergaard in 2004 and had launched their own company named "Bestnet", with their own advanced mosquito net called "Netprotect".
Dr. Skovmand, Vestergaard consultant in relation to the nets until December 2004, when he then went to help with the design of "Netprotect" at "Bestnet", was not (although had been at first) a party to the proceedings. Dr. Skovmand had no written contractual obligation to Vestergaard but there was held to be an oral contract in place.
The claim consisted of Vestergaard accusing Bestnet that Mr. Larsen, Mrs. Sig and Dr. Skovmand, all of whom had implied obligation of confidence during their work at Vestergaard and also after leaving in 2004, that they the defendants had breached their confidence obligation in their work on the Netprotect mosquito net. An important fact in this case was that the defendants conceded that if Dr. Skovmand was found to be liable for infringement of obligatory confidence, then all of the defendants were liable in some manner.
After much debating and close examining of previous related cases, Arnold J reached conclusions based on the claims, and through the use of the general principles of injunction. As well as for the decision, Arnold J also used these to decide upon the appropriate remedies for either side.
In conclusion to the case it was decided that there was a marked infringement by the defendant upon the obligation of confidentiality made through their employment:
Vestergaard was entitled to an injunction against the defendants as they were fully aware that the information used in the designing of their net was confidential.
Vestergaard was entitled to an injunction preventing Bestnet from further disclosure of confidential information, as they were considered Vestergaard trade secrets.
Vestergaard were able to restrain the sale of the 1st Netprotect product as the manufacture and sale of this amounted to a misuse of Vestergaard's trade secrets.
Arnold J ordered Bestnet to deliver up any copies of the Fence database in their possession power or control, and ordered the disclosure by Bestnet of other relevant information relating to all the long lasting insecticidal mosquito nets made and sold by Bestnet to date (i.e. not just the 1st Netprotect product) to allow for the evaluation of an appropriate remedy.
The remedy would be financial.
However, despite "victory" going to Vestergaard, there were several injunctions regarding the matter that they did not achieve although the Arnold J expressed that this raised "difficult questions of principle which merit consideration by the Court of Appeal"
They were not entitled to an injunction stating that Dr. Skovmand to be disallowed from future help and consultancy at Bestnet, as this would be considered an unjustifiable restraint of trade
There was no injunction which prevented Bestnet selling any products aside from the 1st Netprotect product, despite a finding that formulations for other products were derived from a misuse of Vestergaard's trade secrets.
Finally, it is considered that the outcome of this case and the work done by Arnold J will help future cases related to this.
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