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Monday, 23 June 2008

Leaves on the line derail confidence case

The IPKat has learnt of a case of great importance to anybody that travels on trains in the UK. In Basic Solutions v Sands, Eady J considered whether to grant an interim injunction to restrain Mr Sands from tendering or offering for sale a product known as Super Grip, which is meant to enable trains to run even when there are 'leaves on the line'.

The injunction was sought by his former employer, Basic Solutions. They argued that he was still within the terms of a non-compete clause with Basic, and also that his product made use of confidential information which he had learned in the course of his employment.

The court first found that the non-compete clause was invalid as, inter alia, it was too long to be competitive.

The court was also dismissed by the breach of confidence claim. The court noted that the nature of the confidence claimed fluctuated throughout the case. At one stage it was suggested that the fact that Network Rail (which is responsible for the infrastructure of the track system in the UK) was putting the contract to prevent delays caused by leaves on the line out to tender constituted confidential information, but it was found that this could not be the case as EU law requires such contracts to be put out to tender to at least three contracts. This meant that the evidence could not have a suitable 'quality of confidence'. Further claims that Mr Sands had used confidential information were based on mere speculation and assertion such as from one witness : "It is simply not possible that Super Grip [Sand's product] can have replicated Track Grip [Basic's product] without some use of the information acquired by [the Defendant] and I do not accept that he has not in fact made use of the actual product to copy it." Moreover, there was evidence that Sand's product was made of a different substance. Said Eady J

In the teeth of the unchallenged evidence from Mr Donmall and the Defendant, I cannot attach any significant weight to these bold assertions. Track Grip is not replicated in Super Grip and Mr Donmall had no input from the Claimant's know-how. The Claimant is making serious allegations against the Defendant, including to the effect that he kept samples and sought to copy them in breach of his duty of confidence, but it is incumbent upon the Claimant to produce at least some evidential support to weigh in the scales against the clear evidence from the Defendant and Mr Donmall. The decision was made not to apply for an adjournment of the hearing before me, but, even if one had been obtained, I cannot see any basis for thinking that any solid evidence would have been forthcoming to support Mr Paul's accusations.

Both the finding on confidence, and the finding on the non-compete clause meant that the case fell on the first hurdle of the American Cyanamid test, i.e there was no serious case to try. The court also drew attention to the public interest considerations involved, stating that in the decision as to whether to grant an injunction, the court had to consider the cost and inconvenience caused by leaves on the line. However, the court did note that in an appropriate case, a party's interest in protecting its confidential information could usurp these public interest concerns.

The IPKat says that this case seems to be one that was doomed from the start. It is however interesting to note the interplay between public interest concerns (both in terms of whether to grant the injunction, and as to the role played by the tendering process) and confidence.

1 comment:

Michelle Jones (Astex) said...

Interesting that 12 months was found to be excessively long for the non-compete clause. Do you think this has any bearing on non-compete clauses in employment contracts?

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