Application of springboard doctrine in calculating duration of injunction preventing misuse of confidential information

Matt Hanson

In Kerry Ingredients (UK) Ltd v Bakkavor Group Ltd and others, the High Court granted an injunction in similar terms to an earlier interim injunction for misuse of confidential information under the springboard doctrine, on the basis that the defendant had gained a head start in product development by using the claimant’s confidential information, equivalent to approximately one year of internal development.

Background

The claimant was a manufacturer and supplier of edible infused oils. It obtained an interim injunction in the High Court in December 2015 against the defendant, a provider of fresh foods (here, a customer of the claimant), in relation to a claim for misuse of confidential information.  The claimant had imparted confidential information to the defendant for the purpose of allowing the defendant to satisfy itself that the oils were safe and appropriately labelled, as is standard practice in the food industry.

The defendant subsequently manufactured and sold its own range of edible infused oils using the confidential information, leading the claimant to make a claim for misuse of confidential information. The court granted an interim injunction prohibiting “the importing, exporting, putting on the market or offering for sale any edible oil product infused with herbs and/or spices which was enabled or assisted by the use of the confidential information“.

At full trial, the High Court assessed whether to grant a further interim or a permanent injunction, and if so, for how long the injunction should extend.

Judgment

Mr Justice Newey granted the claimant a further injunction which would extend to 30 June 2017, but he did not grant a permanent injunction.  Newey J agreed with the defendant that to have done so would have put the claimant in a better position than if there had been no misuse of the confidential information, given that the oils could have been reverse engineered by the defendant using public information, albeit only with “special labours”.

In light of this finding, the springboard doctrine applied. This was first enshrined in Terrapin Ltd v Builders’ Supply Co (Hayes) Ltd [1967] RPC 375, and further developed in Vestergaard Frandsen A/S v Bestnet Europe Ltd [2009] EWHC 1456 (Ch). In the latter case, the High Court held that the duration of injunctive relief should be calculated by reference to “the time it would take someone starting from public domain sources to reverse engineer or compile the information“.

Applying this, Newey J approximated that the defendant would have gained a head start in the product development process equal to roughly one year by using the confidential information. The further injunction is largely on the same terms as the original interim injunction and does not prevent the defendant from undertaking any development work.

Comment

Mr Justice Arnold cautioned in Vestergaard that where the court is considering the duration of final injunctions where the springboard doctrine applies and there is information of a nature of limited confidentiality (such as information that could be reverse engineered only with “special labours”), permanent injunctions should not be granted if they would put the claimant in a better position than it would have been in had there been no misuse of confidential information.  Newey J broadly followed this approach in this case by estimating how much of a head start the claimant had gained by using the claimant’s confidential information, or how long it would take to reverse engineer or compile the sources.

Kerry Ingredients (UK) Ltd v Bakkavor Group Ltd and others [2016] EWHC 2448 (Ch)

Post By Matt Hanson (1 Posts)

Connect

Leave a Reply

Your email address will not be published. Required fields are marked *