If you believe that a competitor has come by your trade secrets and is using them to unfairly steal a march, you don’t have to just sit back and take it. In a case on point, the High Court came to the aid of an American company which accused a Chinese rival of making underhand use of its confidential information.
The company, which manufactured a type of component used in batteries, alleged that its trade secrets – the product of years of costly research and development – had come into the hands of its rival via a former employee who had moved to a senior position with the rival. It claimed that the rival had made use of those secrets to create a competing product which it planned to sell in the UK market at an unfeasibly low price.
After learning that a shipment of the rival’s product had arrived in England and that the rival was poised to win a contract with one of its most important customers, the company launched proceedings. It alleged that the rival’s use of its confidential information was contrary to the Trade Secrets (Enforcement, etc.) Regulations 2018 and in any event unlawful. It also claimed that the rival was indirectly liable for its former employee’s own breaches of confidence.
The rival denied any wrongdoing. In granting the company a pre-trial injunction, however, the Court found that it had established a serious issue to be tried that its trade secrets had been used in the development and manufacture of the rival’s product. The damage the company would suffer if refused relief would be very difficult to quantify and the balance of convenience fell in favour of the injunction being granted.
The Court ruled that the English courts had jurisdiction to determine the company’s claim and that England was the most convenient forum for the case to be heard. In doing so, the Court, amongst other things, expressed concerns as to whether the company could obtain substantial justice in China, where the law of intellectual property is still developing and the legal system was said to be overburdened.
The injunction, which would remain in force pending a full trial of the company’s claim, forbade the rival from making, offering, putting on the market, importing, exporting or storing in the UK any relevant products to be supplied, directly or indirectly, to the company’s UK-based customer.