Virtuoso Legal successfully defends expedited High Court breach of confidence case
Virtuoso Legal successfully defends expedited High Court breach of confidence case: On 9 January 2019, we updated our readers on a matter where the Virtuoso Legal IP Protect team, led by our director Philip Partington, successfully defended an interim injunction application brought by FreshAsia Foods Limited (“FreshAsia”) seeking to (amongst other things) force our client to terminate his employment with his new employer. For more information about that, read here.
FreshAsia, despite having been unsuccessful in their interim attempts to force our client to terminate his employment with his new employer, proceeded to bring the matter to a full 3-day trial in early March 2019 before Mr Justice Arnold in the High Court. On 20 March 2019, Mr Justice Arnold’s decision was handed down. A full copy of his decision can be found here.
In summary of Mr Justice Arnold’s conclusions:
- In relation to the non-compete clause, Freshasia did not have “legitimate business interesting requiring protection” in order to justify the enforcement of their non-compete clause, as “Mr Jing’s contact with customers was minimal”, Freshasia’s confidential information was already protected by separate covenants and any trade secrets were protected by equitable obligation of confidence. The information in Freshasia’s Protected Documents was very detailed and would be difficult for Mr Jing to recall without the documents themselves. In addition, “the clause is also too wide in that it would stop Mr Jing from being employed by a competitor to Freshasia in a non-marketing role” as, for example, it would have even stopped Mr Jing working as a production manager for a competitor. Further, the period of 12 months was too long. In the circumstances, Freshasia’s attempts to rely upon their non-compete clause was dismissed.
- In relation to the non-solicitation clauses, Mr Justice Arnold was again “not satisfied that Freshasia had legitimate business interests requiring protection”, as for example this would have prevented Mr Jing from even “designing a promotional poster which someone else at [his new employer] used to solicit custom”. In the circumstances, Freshasia’s attempts to rely upon their non-solicitation clause was rejected by the court. As such, Freshasia’s claim to enforce the non-solicitation clause was dismissed.
- The court rejected Freshasia’s invitation to the court to delete parts of the wording of the above clauses, so as to make them enforceable.
- The court found that Mr Jing was contractually obliged to “deliver up any electronic copies of any Protected Documents he had in his control and then to delete them”, although he was “only required to deliver up copies of documents that Freshasia did not already have”. Since Mr Jing did not do so immediately upon termination, Mr Justice Arnold concluded that “Mr Jing did breach [his contract] by failing to delete at least 17 Protected Documents until 30 November 2018”, but was “not persuaded that he retained any Protected Documents after 30 November 2018” as “Freshasia could have instructed a suitable expert to inspect Mr Jing’s laptop for evidence of such retention, but it did not do so. Mr Jing’s willingness to permit this indicates that he had nothing to hide”.
- The court found that “Mr Jing’s retention of copies of Protected Documents did not amount to use, or therefore misuse, of the confidential information contained therein. At most it amounted to a threat to do so”. In addition, that there was “no direct evidence that Mr Jing has misused any confidential information contained in any of Protected Documents since his departure from Freshasia, let alone that he threatens or intends to do so in the future. Freshasia contends that this should be inferred from various factors. Having regard to my findings of fact, I consider that there is no basis for any such inference”. As such, Freshasia’s claim in relation to misuse was dismissed.
- In relation to alleged copyright infringement, the court concluded that “there is no evidence that Mr Jing accessed copies of Protected Documents on his personal Google Drive, between 28 September 2018 and 30 November 2018, nor is this to be inferred. He did so on 30 November 2018 for the purpose of copying files onto the USB sticks, but that was done with Freshasia’s consent. There is no evidence that Mr Jing has accessed copies of Protected Documents on his personal Google Drive since 30 November 2018, nor is this to be inferred. Accordingly, this claim is dismissed”.
Following on from Mr Justice Arnold’s judgment, the parties are expected to attend court in the coming weeks in order to argue their proposed final form of order including legal costs.
We will keep you all updated as to the result and will also be writing in our forthcoming blogs as to the consequences of this decision for all businesses.
To speak to our team of IP specialists, please call:
0207 412 8372
Virtuoso Legal successfully defends expedited High Court breach of confidence case was written by Philip Partington