Healthy competition is one thing, but using a rival’s confidential information in order to gain an unfair edge in the marketplace is quite another. That distinction was at the heart of a bitter commercial dispute between competitors in the party balloon business.
A group of companies that supplied illuminated balloons to supermarkets and others believed that its former global sales director had passed confidential information of great value, including customer lists and design and pricing details, to competitors. It claimed that its former employee had acted in breach of restrictive covenants in his contract of employment and had engaged in a clear conspiracy with the competitors with a view to copying its products and luring away its clients.
In granting a wide-ranging injunction against the competitors, the High Court found that the group had put forward a strong case that they had paid for and knowingly enjoyed access to its confidential information. Although there was little hard evidence of the competitors having targeted the group’s customers, or that they planned to do so imminently, the group had established that there was a serious issue to be tried in those respects.
There was also evidence of actual or potential misuse of the group’s confidential information in terms of product copying. In those circumstances, a so-called ‘springboard’ injunction, which would remain in place for 12 months, was justified. The order, amongst other things, forbade the competitors from supplying certain products to a list of eight of the group’s major customers.
The Court noted that the list was more limited than that sought by the group and that the injunction granted was not so draconian as to prevent the competitors trading fairly. The group was also refused an order that would have required the competitors to submit email accounts and electronic devices to forensic scrutiny. The group had already obtained a confidentiality injunction against its former sales director.
If you are concerned that your confidential trade information is at risk, or may be put at risk by an employee or ex-employee, we can advise you of the appropriate steps to take.