Infused oils misuse of confidential information ruling by High Court
Written by Ellis Sweetenham on 17 October 2016« Return to Reading Room
Kerry Ingredients (UK) Ltd v Bakkavor Group Ltd and others  EWHC 2448 (Ch), 7 October 2016
Kerry Ingredients (UK) Ltd, the claimant, was a subsidiary of the Irish company, Kerry Group plc, which carried on a large food business.
The defendants (Bakkavor) belonged to a group of companies, which were a leading provider of fresh prepared foods.
From the 1990s, Kerry supplied Bakkavor with edible infused oils.
In 2010, Bakkavor began to explore alternative sources of such oils and worked with various potential third party suppliers. In September 2015, Kerry discovered that Bakkavor was about to manufacture oils, which Bakkavor then confirmed.
It is common practice in the food industry for suppliers to provide their customers with product information so that the customers can satisfy themselves (and their own customers) that the product is safe and appropriately labelled.
This information was provided to Bakkavor by Kerry which they argue led to Bakkavor developing their own infused oils, which became a competitor of Kerry.
In November 2015, Kerry began proceedings against Bakkavor for misuse of confidential information relating to the production of edible infused oils.
In December 2015, the High Court granted Kerry an interim injunction preventing the importing, exporting, putting on the market or offering for sale any edible oil product infused with herbs and/or spices the making of which was enabled by the use of the alleged confidential information.
For a breach of confidential information claim to succeed, there are three requirements to be satisfied:
· The information itself must "have the necessary quality of confidence about it".
· It must have been imparted in circumstances importing an obligation of confidence.
· There must be an unauthorised use of that information to the detriment of the party communicating it.
These requirements need to be fulfilled for Kerry to succeed in their claim.
In relation to the three requirements, the judge in this case, Newey J considered them in turn.
Firstly, he stated that even though the information and processes revealed by Kerry could have been found by Bakkavor via the procedure of reverse engineering, it still had the necessary quality of confidence.
Secondly, the Judge stated that an obligation of confidence arose as a result of receipt of confidential information if the recipient either knew or had noticed that the information was confidential. Kerry suggested that Bakkavor’s purchasing manager had understood the importance of keeping the information confidential. On this ground Nevey J agreed that Bakkavor had an obligation of confidence.
Lastly, the judge considered that it was clear that Bakkavor had breached the obligation of confidence found, it had used the confidential information and communicated it to third parties to assist in the development of a competing product, which had nothing to do with the purpose for which it had been supplied.
Therefore, overall the Judge held that Bakkavor had misused information confidential to Kerry relating to the production of edible infused oils and that that an injunction, along the lines of the High Court's interim injunction, should be granted.
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