Action and redaction: equal and opposite?

For the IPKat, finding a claimant called ABC
was literally a piece of cake

The IPKat has seen some strange things in his time, but never a judgment quite like this. It's in the case of ABC Ltd v Y [2010] EWHC 3176 (Ch), in which Mr Justice Lewison -- one of the Patents Court judges for England and Wales -- gave judgment in the Chancery Division today.

The judgment is so heavily censored (or "redacted", as the text reads) that it's quite difficult to follow in places, and it's so full of Xs and Ys that it reads like an algebra textbook.  At the heart of the matter is an application by someone who was not a party to proceedings. As the judge put it:

"Between November 2006 and June 2008 proceedings were on foot in the Chancery Division. [X] was not a party to those proceedings. They were proceedings between five companies [redacted] and Mr [Y], in which the five companies sought injunctions against Mr [Y] restraining him from disclosing or misusing confidential information. Those proceedings resulted in at least three orders of judges of this Division, including the Chancellor, following hearings in private. During the course of the proceedings on 27 September 2007, at another hearing in private, Master Bowles made an order that, subject to further order, non-parties might not obtain documents on the court file. The proceedings were eventually compromised in June 2008. Under the terms of the compromise Mr [Y] submitted to an injunction in broad terms; and withdrew allegations made against the five companies and/or their directors, officers, members etc and in particular withdrew all allegations of improper conduct made in the High Court proceedings. Part of the compromise was a comprehensive confidentiality agreement. Following the compromise a consent order was made by Chief Master Winegarten on 25 June 2008. A redacted version of that order is in evidence. The order does not state that it was made at a hearing in private; and the body of the order does not direct that the hearing be in private. The order includes an undertaking by Mr [Y] to be bound by a permanent injunction preventing the use or disclosure of confidential information, which is defined in very wide terms. It also included an undertaking by Mr [Y] that he had deleted copies of confidential information from all electronic or reusable media (including mobile phones and handheld computer devices). The order recited that the parties had "agreed to the terms set out in the Schedule hereto (which Schedule is confidential and therefore not to be filed at court)". The operative part of the order included an order that Master Bowles' order relating to the sealing of the court file be made permanent.

[X] has now applied for permission to have copies of documents on the court file. [Redacted]
The ground of the application, according to the application notice, is that:

"… the documents are required in connection with other related ongoing proceedings [redacted].""

Lewison J refused the application with respect to all documents save Master Winegarten's order.  In the course of doing so, he reviewed the principles of open justice as well as Article 6 of the European Convention on Human Rights ("In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice"), the need to balance that provision against the entitlement to privacy under Article 8 of the same Convention and the extent to which publicity/privacy applies to interim orders.

It has been a big year for big confidentiality cases, says the Kat, who had his work cut out in trying to lick
Imerman v Tchenguiz and others [2010] EWCA Civ 908 into shape (see IPKat posting here) and is somewhat reminded of it now.  Then there was that spat over the identity of The Stig ...

ABC here and here
X factor here
Y chromosomes here

Why BBC stalled in race with The Stig

The BBC's next great idea, "Junior Top Gear"
 -- but will little Tommy overtake The Stig in popularity?

Readers with a mild interest in the parameters of commercial privacy/publicity, or with an obsession with the BBC's "Top Gear" television series, may recall the IPKat's posts here and here on the unsuccessful efforts of the British Broadcasting Corporation to secure an interim injunction to prevent Ben Collins ,the human being whose persona as "The Stig" was the subject of much attention and speculation, from revealing in his biography who he really was. The IPKat guessed what had happened, and his guess was confirmed at the time -- but now the full judgment of Mr Justice Morgan (Chancery Division, England and Wales) is available for all to read and (unless they do the BBC's contract work) enjoy. In short, there was a contract between the BBC and Collins' service company, but no contract and no obligation of confidentiality owed by Collins himself to the BBC.  As the judge put it,

"My conclusion is that Mr Collins was not a party to the relevant contracts. Although Mr Collins signed the contracts, he did so on behalf of the service company which was expressed to be the relevant contracting party, for which he signed. He did not, by his signature, become a further party to the contracts. The BBC contends that Mr Collins must have been a party to, at any rate, some of the earlier contracts because those contracts contained an obligation on the other contracting party that "you will not reveal your identity". It is said that it cannot have been intended that the service company would not reveal its identity; it must have been intended that Mr Collins would not reveal his identity. Therefore, it is argued, the contract must be directly binding on Mr Collins and it should be held that Mr Collins made himself a party to the contract for the purpose of taking on this obligation, but not, apparently, for any other purpose. I agree that the language of the obligation referring to "you" and "your" is not ideal given that the other contracting party is prima facie the service company. The real reason for that is that the parties did not think through the consequences of the fact that the contracting party was the service company rather than the individual performer. There are a number of ways for a court to react to this state of affairs. One is to take the contract literally. That produces the result that the service company contracted not to reveal its identity. That is not an absurd suggestion; if the service company had revealed its identity, that would indirectly reveal the identity of Mr Collins. Another way to read the contract is to hold that the service company contracted not to reveal its identity or the identity of Mr Collins. In my judgment, it is appropriate to hold that the contract is to be read in one or other of those ways and it is not appropriate to hold that Mr Collins himself entered into the contract for the sole purpose of entering into the obligation in question ...".

What about any duty of confidentiality which, apart from the contract, Collins might owe to the BBC? Yes, the judge said, such a duty of confidence existed.  However, that did not avail the BBC since, on the evidence the cat (metaphorically speaking) was out of the bag.

" I will ask whether the identity of The Stig is so generally accessible so that, in all the circumstances, it can no longer be regarded as confidential. In my judgment, the press coverage, in particular the press coverage in August 2010 [nb the BBC's claim was lodged on 17 August and was heard on 31 August/1 September], goes well beyond speculation as to the identity of The Stig. The statements in the press that Mr Collins was The Stig would be understood by the public as statements of fact. The number of different newspapers which have stated that fact is such that the fact is now generally accessible. For all practical purposes, anyone who would have any interest in knowing the identity of The Stig now knows it. The identity of The Stig is no longer a secret and it is no longer confidential information. I conclude that at the latest by 29th August 2010, the date of the last of the thirteen publications (between 19th and 29th August 2010) to which I referred above, the fact that Mr Collins was The Stig was so generally accessible that that information had lost its confidential character. At the lowest, I think it is likely that the court at any trial of this action would reach that conclusion".

All things considered, this was not good news for anyone seeking an interim injunction:

"Such an injunction would not protect the claimant from harm caused by the unlawful action of a defendant. Although such an injunction would deprive the defendant of a benefit, it is not a proper use of the court's power to grant an injunction merely to punish a defendant for his previous unlawful action, where the injunction does not protect the claimant against further harm, unlawfully caused. The court may award a financial remedy to a claimant in such a case, but that is not the remedy sought by the BBC on this application.".

This must be right, as far as it goes, says the IPKat, but it does raise questions as to the bases under which the BBC might seek damages or equitable remuneration at some later stage -- if they have not already contemplated doing so.

What's The Stig doing now? Click here, here and here
A speedy Morgan here

The Stig can be "outed": official

Last week, in "Stig-ment of the imagination?", the IPKat reported on the dispute between the BBC, which holds the rights to the unbelievably popular Top Gear TV series, and publisher HarperCollins over the latter's right to publish a book that reveals the secret but much-discussed identity of The Stig -- a perpetually helmeted driver.

Right: dashing from the court on foot, The Stig hopes to slip away unrecognised ...

Today, in "Stig court case: BBC loses battle over Ben Collins book", the BBC reports its own defeat. According to this news item, in relevant part:

"... The High Court in London refused to grant the BBC an injunction blocking the publication by HarperCollins of an autobiography of former Formula Three driver Ben Collins. The book, called The Man In The White Suit, claims Mr Collins is the mystery driver on the BBC Two show.

The BBC began legal action against HarperCollins last week. It says it won't confirm or deny that Ben Collins either was or remains The Stig. But Top Gear presenter James May, who was a studio guest on BBC London when High Court's decision was announced, made light of the situation. He said: "Obviously I'm now going to have to take some legal action of my own, because I have been the Stig for the past seven years, and I don't know who this bloke is, who's mincing around in the High Court pretending it's him."

The Stig is famous for his racing overalls and dark-visored helmet. His identity has long been a closely-guarded secret on Top Gear .... Several racing drivers have been linked to the role, including former Formula One world champions Damon Hill and Michael Schumacher.

Mr Collins, 33, from Redland, Bristol, was in court for part of Wednesday's hearing. The first Stig, Perry McCarthy, was dropped in 2003 after his identity was uncovered.

During the case this week - which took place behind closed doors - the BBC had argued that the planned book would breach confidentiality obligations. After more than a day of legal submissions before Mr Justice Morgan, HarperCollins lawyers emerged on Wednesday to say the case had concluded in their favour.

Solicitor Robin Shaw said: "The judge has said he is not going to grant an injunction in this case. Reasons are to follow and will be given in a private judgement."

A BBC statement said: "The Top Gear audience has always made it clear that they enjoy the mystery surrounding the identity of The Stig and the BBC felt it important to do all it could to protect that anonymity. The BBC brought this action as we believe it is vital to protect the character of The Stig which ultimately belongs to the licence fee payer. Today's judgement does not prevent the BBC from pursuing this matter to trial and the BBC will not be deterred from protecting such information from attack no matter when or by whom it should arise"...".

The IPKat doesn't see how the BBC could really have won this one, so he's really excited about getting to see the court's judgment in black and white (as it were ...). It can be argued that a legal right to preserve the anonymity of one's public pseudonymous identity would encourage investment in the commercialisation of such a commodity, but there doesn't seem to be such a right on the books at present.

The Man in the White Suit here

The Cat in the White Suit here

The Stig here

The Sting here

Some summary summer for Ricoh, while Jones groans

It's a good week for sorting out confidentiality cases. Only yesterday the IPKat finally sorted out the awesome decision in Imerman v Tchenguiz (here), and now he's catching up on Robert Andrew Jones v Ricoh UK Ltd [2010] EWHC 1743 (Ch), a Chancery Division for England and Wales decision of Mr Justice Roth midway through last month.

Right: Ricoh's legal team -- or "relevant persons"?

Ricoh supplied office equipment to CMP -- which in turn provided assistance to other companies in procuring and running the machines it provided for them. Jones was the founder, principal shareholder, managing director of CMP and eventually the assignee of the causes of action which it owned when it went into liquidation. CMP's confidentiality agreement with Ricoh

* barred the manufacturer from using any "confidential information" [widely defined, naturally, but not, in the Kat's opinion, intolerably so] which CMP gave it, except for the purpose of evaluating the purchasing terms available to CMP with a view to Ricoh's entering into an agency agreement with CMP, and

* provided that no "relevant person" who remained in possession of any confidential information could contact any other such "relevant person" [the definition of "relevant person" was so wide that it could only have been drafted by an IP lawyer with reckless indifference to competition law: the term covered not just Ricoh and all associated companies in the worldwide Ricoh group, but also the "employees, agents or professional advisors" of any such company].

When chasing a tender to supply multifunctional devices to some European sites in which Bombardier, a major client, was a subsidiary, CMP found itself bidding in partnership with another manufacturer but against Ricoh, but this partnership proved unsuccessful. Bombardier's global group then issued a second invitation to tender, in which Ricoh was successful.

According to Jones, Ricoh had acted in breach of the confidentiality agreement. He sought damages on the basis that, if Ricoh had been unable to use CMP's confidential information in order to bid and win the tender on its own, it would have successfully bid together with CMP. So far as the second tender was concerned, Jones also sought, by an amendment to his original claim, damages under the rule in Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798 in respect of the sum CMP would have received from Ricoh to release it from its obligation of confidence, or at least an account of profits in respect of the benefit which Ricoh secured when it became Bombardier's global supplier.

Ricoh was most unhappy at this and retorted that the obligation not to communicate with any "relevant person" breached Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) and/or was in unreasonable restraint of trade and therefore unenforceable. As for the first tender invitation, even if there had been any breach of the confidentiality agreement the damages were irrecoverable as a matter of law, since Ricoh was not duty-bound to submit a joint bid with CMP. As for the second tender, there was no breach of the agreement on the evidence and, even if there had been, there was no justification for an account of profits.

Roth J agreed with Ricoh that the bar on sharing confidential information with any "relevant person" fell foul of Article 101(1) of the TFEU, giving the company summary judgment on that point. Among other reasons, the fact that Bombardier would be barred from receiving bids from Ricoh but could receive bids from other major suppliers was proof of its anticompetitive effect. Since this restriction amounted to a prohibition of competition and CMP was not acting as Ricoh's distributor or as a reseller, Ricoh and CMP were not operating at a different level of the distribution chain could not therefore rely on the Article 101(3) exemption for any agreement which "contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit" and which is soft and cuddly.

Ricoh wasn't so lucky regarding Jones's claim under the first tender invitation: since this concerned the assessment of damages where there was a breach of a negative obligation, Jones's claim was for damages for the loss allegedly caused by Ricoh's decision to use confidential information to bid alone -- not for Ricoh's failure to do something that it was not obliged to do. Such loss could only be assessed on the basis of what, on the balance of probabilities, would have happened if Ricoh hadn't taken its particular course of action. Factual issues such as this were not appropriate for summary determination and had to go to trial. However, Jones would have to provide security for Ricoh's costs since it was improbable that Jones's claim under this head would succeed.

Finally, Jones was not allowed to amend his application concerning his claim for account of profits claim (this claim not being sustainable), but he was allowed to do so regarding the claim for damages.

Says the IPKat, this looks like a remarkably bold and decisive application of Article 101(1) of the TFEU by a domestic law. It's not every day that a provision of the European Treaty furnishes a basis for summary judgment. He remembers the old days when British judges were so hesitant about applying provisions of European law, especially when they were raised as "Euro defences", that they would do almost anything to say there was an arguable case in the hope that the trial would end up before someone else ... Merpel adds, there's a lot more factual detail and legal analysis in the judgment than this little note suggests.

Both Kats wonder whetherWrotham Park damages fall within the provision of the IP Enforcement Directive 2004/48. Probably they don't have to, since (i) breach of contract in an IP case isn't really an IP infringement but a contract matter and (ii) it's not clear if confidential information is IP for the purposes of the Directive.

Lance-corporal Jones here

Incorporeal Jones here

Jones the Cat here

Wrotham Park here

Court restores confidence in confidentiality

Why, some readers ask, does the IPKat have so little to report on the subject of confidentiality? Isn't that also part of intellectual property law? Yes, it is -- but there's not always that much news to report. Like any other case-law subject, confidentiality depends on cases for a continuing flow of interesting things to write about. However, good news for enthusiasts is that, in the recent 177 paragraph decision of the Court of Appeal for England and Wales in Imerman v Tchenguiz and others [2010] EWCA Civ 908, there were a few good points for connoisseurs to savour.

The background to this litigation suggests that none of the parties was legally aided and that the threat of mounting legal costs was never going to pressurise reluctant combatants into reluctantly accepting a cash-saving settlement. Vivian Imerman shared an office with his brothers-in-law Robert and Vincent Tchenguiz, in which his computer was supported by a server. Robert owned or leased both this office and the server and had unrestricted access to the latter. After the Tchenguiz's sister Elizabeth petitioned Vivian for divorce, Robert evicted him from the office, also accessing the server in order to make electronic copies of Vivian's emails and other documents. For good measure, Robert also took further copies of that material on various digital storage media, including two USB memory sticks and one hard drive -- all with Vincent's knowledge.

Robert handed the materials so obtained to the brothers' solicitor Zaiwalla (which boasts rapport with clients who are "high net worth individuals": various Gandhis, Bhuttos and -- representing those who don't have a silent 'h' in their surnames -- former boxing champion Chris Eubank), who in turn passed the two USB memory sticks and hard drive to forensic accountants, in order to prepare a report. A big chunk of that material, being thought to be of particular relevance to Elizabeth in any ancillary relief proceedings, was printed out and handed over to Zaiwalla, while the rest (some seven files) was collated and passed on to Elizabeth's solicitors; they were later passed on to Vivian's solicitors.

None too happy about this, Vivian sought and obtained interim relief to stop the brothers using information obtained from the documents, plus summary judgment for orders precluding both Robert and Vincent from (i) communicating or disclosing to third parties any information contained in them, (ii) copying or using any of them or information contained in them. Vivian also sought delivery up. After the brothers appealed, Elizabeth launched ancillary relief proceedings and Vivian them sought from her (i) the return of the seven files and any copies and (ii) an order prohibiting both her and her solicitors from using any of the information obtained in them. The judge ordered the conditional return of the files to that Vivian could identify any privileged material in them, but added that they then had to be returned to Elizabeth for the purpose of her ancillary relief claim.

Both sides appealed, Vivian denying that there was any legal justification for permitting a wife to retain copies of documents which she had unlawfully obtained on the grounds that to do so would assist in preventing or curing a less than frank disclosure by her husband of his assets.

The Court of Appeal (with Lord Neuberger, Master of the Rolls, reading the judgment to which both Lord Justice Moses and Lord Justice Munby contributed) allowing Vivian's appeal and dismissing that of the Tchenguiz clan and their solicitor. In the court's view,

* It was a breach of confidence for a person, without the claimant's authority, to examine documents or to make, retain, or supply copies of them to a third party where that person knew or ought to have known they were confidential to that claimant. This was because, at the heart of the claimant's right to confidentiality, the claimant has the choice of whether and, if so, to whom and how, to reveal his confidential information. Once this is shown, the claimant should be entitled to restrain use of publication of that information and to ask for any copies back: he should not be at risk of that confidentiality being actually or even potentially lost.

* White v Withers LLP [2009] EWCA 1122 established the proposition that the mere receipt of documents by solicitors from their client and their continued retention in connection with matrimonial proceedings could not give rise to a cause of action. This proposition should only be taken as applying to the receipt of documents by solicitors from their client and did not mean that a claimant could not recover the documents from the solicitors.

* The fact that misuse of private information was now recognised as an actionable wrong under English law did not mean that a claim for breach of confidentiality could not succeed in the absence of such misuse -- unless the claim was brought in respect of the pre-Human Rights Act 1998.

* The court would almost always order the return or destruction of wrongfully held information and copies of documents. If it didn't, the information would still be 'out there' in the possession of someone who should not have it.

* Confidentiality claims being based on equity, any relief ordered by the court was at its discretion. However, where confidential information is passed by the defendant to a third party, the claimant's rights will prevail as against the third party unless he is a bona fide purchaser of the information without notice of its confidential nature.

* It could not be argued that a husband could not enjoy rights of confidence as against his wife in respect of information which, if they were not married, would be confidential as against her.

* Under English law, while marriage might be a partnership of equals, there remained a sphere in which each spouse had, within and as part of the marriage, a life separate and distinct from the shared matrimonial life. This was implicit in the protection under the European Convention on Human Rights, Article 8, which each spouse enjoys in relation to his or her personal and individual private life, in contrast to their shared family life.

* Once a court found that a document was properly to be regarded as confidential to one spouse but not to the other, the relationship had no further relevance in relation to the remedy for breach of confidence.

* In this case Vivian had an expectation of privacy for most of his documents which he stored on the server and the fact that Robert had access to it as controller of the server did not affect this ("Confidentiality was not dependent upon locks and keys or their electronic equivalents": para.79).

*The illegal nature of the "self-help" in this case could not be condoned on the ground that it was feared that Vivian would unlawfully conceal that which had to be disclosed.

* The defendants could not rely on the so-called Hildebrand Rules in order to justify the retention of wrongfully obtained documents so that they could be admitted in evidence in matrimonial proceedings because "There are no such rules. There are no rules which dispense with the requirement that a spouse obeys the law" (para. 139).

* This was an extreme case of wrongful access to confidential material and Elizabeth should not be entitled to benefit in any way from the wholesale, wrongful, and possibly criminal, accessing and copying of the claimant's confidential documents.

The IPKat is, as ever, impressed with the Master of the Rolls' elucidation of the law and application of it to the facts. It seems to him entirely correct that confidentiality should be respected in this manner, and it's very reassuring for all of us who use computers extensively for the creation, storage and transmission of confidential information to know that the ability of a third party to access it does not diminish its confidentiality. Merpel says, I think Hildebrand's a great name for a cat ...

Theme song for this litigation here

Robert Tchenguiz and borrowings from Icelandic banks here

The fantasy world of Vincent Tchenguiz here

Other Vincents here and here

Strange brew -- but free speech holds out against confidentiality challenge

A tricky issue relating to the protection of rights in confidentiality versus freedom of speech was the subject of a lengthy and somewhat repetitive decision of the European Court of Human Rights (Judge Garlicki presiding, Judges Bratza, Bonello, Mijovic, Bjorgvinsson, Bianku and Poalelungi, and L Early) this Tuesday in Financial Times Ltd and others v United Kingdom (App. No. 821/03).

On 30 October 2001 mega-brewery Interbrew, contemplating a possible takeover bid for South African Breweries (SAB), asked its advisers Goldman Sachs to prepare a preliminary working document. Even the existence of the document was confidential: it was market-sensitive since it disclosed a possible takeover bid. A little later, someone obtained a copy of the document and prepared copies of it, which the Financial Times newspaper (FT) claimed to be 'doctored' in that they contained a fabricated offer price and timetable for the bid. That person sent copies of the doctored document to various publishers of news.

An FT journalist, having received a doctored copy, contacted Interbrew whose chief executive officer said Interbrew had been looking at a bid for SAB, but that it was not true that a bid was imminent. On 27 November, the FT published a story based on the doctored copy and on the conversation with the Interbrew's CEO. Other newspaper publishers, having also received doctored copies, also published articles on the bid. The result of these stories being published was that Interbrew's share price fell while SAB's rose. The volume of SAB's shares traded on 27 November 2001 was less than 2 million. On 28 November 2001, it was more than 44 million.

On 19 December 2001 Interbrew secured interim injunctive relief, forcing the FT and the other newspaper publishers to preserve and, within 24 hours, deliver up their doctored copies of the document, on the ground that a person who, albeit innocently, facilitated the tortious act of another had to cooperate in righting that wrong. In March 2002 the Court of Appeal dismissed the publishers' appeals, holding that the public interest in Interbrew being able to take proceedings against the source for breach of confidence outweighed that of protecting journalists from having to reveal their sources. In July of the same year the House of Lords refused leave to appeal, following which Interbrew required the FT and the other publishers to comply with the court order for delivery up of the documents. They refused and complained to the European Court of Human Rights that the original decision to order them to disclose the leaked document to Interbrew violated their right to freedom of expression as provided in Article 10 of the European Convention on Human Rights.

The Court, holding in favour of the FT and the other newspapers, found that there had been a breach of their freedom of expression under Article 10. In its view

* Even though the disclosure order had not been enforced, that had not removed the harm since, however unlikely such a course of action appeared, the order remained capable of being enforced. It followed that that order constituted an interference with the newspapers' right to freedom of expression.

* On the basis that there was such an interference, it was next necessary to examine whether the interference was justified under Article 10(2).

* The interference was one which was 'prescribed by law' within the meaning of Article 10(2). It was intended to protect the rights of others and to prevent the disclosure of information received in confidence, both of which were legitimate aims.

* Since the aims of the interference were themselves legitimate, it next had to be asked whether that interference was necessary in a democratic society.

* Freedom of expression was one of the essential foundations of a democratic society and the safeguards guaranteed to the press were particularly important. Further, protection of journalistic sources was one of the basic conditions for press freedom. Without such protection, sources might be deterred from assisting the press in informing the public on matters of public interest. As a result, the vital 'public watchdog' role of the press might be undermined and the ability of the press to provide accurate and reliable reporting might be adversely affected.

* Having regard to the importance of the protection of journalistic sources for press freedom in a democratic society and the potentially chilling effect that an order for disclosure of a source had on the exercise of that freedom, such a measure could not be compatible with Article 10 unless it was convincingly justified by an overriding requirement in the public interest.

* It was for the national authorities to assess in the first place whether there was a 'pressing social need' for the restriction and, in making their assessment, they enjoy a certain margin of appreciation. However in this case the national margin of appreciation was circumscribed by the interest of democratic society in ensuring and maintaining a free press. That interest would weigh heavily in the balance in determining whether the restriction was proportionate to the legitimate aim pursued.

* Limitations on the confidentiality of journalistic sources called for the most careful scrutiny by the Court, whose role was not to take the place of the national authorities but rather to review the case as a whole, in the light of Article 10, and consider whether the decision taken by the national authorities fell within their margin of appreciation. The Court thus had to look at the interference and determine whether the reasons adduced by the national authorities to justify it were 'relevant and sufficient'.

* Article 10 protected a journalist's right, and duty, to impart information on matters of public interest so long as he was acting in good faith in order to provide accurate and reliable information in accordance with the ethics of journalism.

* Disclosure orders had a detrimental impact not only on the source in question, whose identity might be revealed, but also on the newspaper against which the order was directed, whose reputation might be negatively affected in the eyes of future potential sources by the disclosure, and on the members of the public, who had an interest in receiving information imparted through anonymous sources and who were also potential sources themselves.

* The public perception of the principle of non-disclosure of sources might suffer no real damage where it was overridden in circumstances where a source was clearly acting in bad faith with a harmful purpose and disclosed intentionally falsified information. However, the courts should be slow to assume, in the absence of compelling evidence, that those factors were present in any particular case.

* Given the multiple interests in play, the conduct of the source could never be decisive in determining whether a disclosure order ought to be made but would merely operate as one, albeit important, factor to be taken into consideration in carrying out the balancing exercise required under Article 10(2).

The IPKat thinks this was a close call, since the facts relate to a situation in which one of two morally innocent parties has to suffer: a company whose takeover target suddenly becomes more expensive through a deceitful breach of confidence and a newspaper which in good faith seeks to report and comment on matters of immediate concern to the commercial community. Merpel doubts that orders of this nature have much of a chilling effect in the United Kingdom anywhere, where the media are so powerful and the mechanisms for law enforcement so puny.

SAB here

SABIP here

Shhh ... it's a secret, as spicy burgers go to court

Thanks are due to the IPKat's friend Gemma O'Farrell for sending him this item from the Irish Times, entitled "Legal row over recipe for spice burger". According to this article,

"The makers of the spice burger have secured a number of [interim] High Court injunctions against a former director who it is claimed has been passing off burgers made by him as their product.

Walsh Family Foods Limited have sought the orders against one of its former directors Patrick Walsh, .. the son of the person credited with inventing popular chipper staple [the IPKat is unfamiliar with this term, which has no corresponding Wikipedia entry. An internet search revealed just 47 'hits', so it may be an obscure Irish term of art ...], and is one of the few people who knows the burger's secret recipe. ...

The injunctions restrain Mr Walsh from destroying any information or interfering with any of the companies property, in particular any documentation sent by the suppliers of ingredients for the spice burger. ...

The orders also restrain Mr Walsh deleting or destroying any confidential information that relate to any scope of the company’s business acquired by Mr Walsh during his employment with or in his capacity as a director of the company. ...

Mr Walsh, counsel said, sells the burgers as “Paddy Walsh Spice Burgers,” and the “Original Spice Burger Company”.

Those actions, counsel claimed, are in breach of the provisions of his contract of employment, which prevents him from revealing any trade secrets to any group or company. ...

[Evidence was given] that the spice burgers being made by Mr Walsh look indistinguishable from those made by the company [The Kat wonders whether this was on the basis of the ECJ's beloved "global appreciation" basis, or was there a burger-for-burger comparison of individual characteristics. Merpel wonders whether, strictly speaking, the burger is just the bit in the middle, the bun being merely an outer casing] [but] that Mr Walsh had re-introduced MSG into the product to give it a slightly stronger flavour"".

Speculation is rife as to whether counsel for the parties belong to the Burger Bar ...
Wikipedia on burgers here
Spice burger recipes with video here
Kangaroo burger here
Warren Burger here

Net profit saved though springboard loses its spring?

A few short but busy weeks have passed since the IPKat first received word of Vestergaard Frandsen A/S and others v Bestnet Europe Ltd and others [2009] EWHC 657 (Ch) and its sequel at [2009] EWHC 1456 (Ch), these being Chancery Division for England and Wales judgments of Mr Justice Arnold. Now he has the time to deal with them.

The dispute in question related to technical information concerning mosquito nets which was contained in a database. The action was brought by the Vestergaard group of companies against a variety of defendants, including two ex-employees. The judge found that a consultant, who was initially engaged by Vestergaard but then worked with the defendants in developing their own competing mosquito net, had been bound by both express and implied obligations of confidence. He also found that the information in the database constituted trade secrets that belonged to Vestergaard.

Holding that the obligation of confidentiality continued even after the consultant's relationship with Vestergaard had ended, Arnold J rules that his use of recipes and test results contained in the database, in order to devise the initial recipes for the defendants' competing product, amounted to a misuse of confidential information for which all the defendants were liable.

In a complex and long judgment, Arnold J the factors to apply when determining whether there has been a misuse of confidential information consisting of technical information. Both he and the parties accepted that the consultant's position was analogous to that of an employee, which meant that the Court of Appeal's well-established guidance relating to the position of employees, laid down in Faccenda Chicken Ltd v Fowler [1987] Ch 177, could be deployed when determining whether the consultant could use the information once his relationship with Vestergaard was over.

Having held in favour of Vestergaard, the next issue for Arnold J to determine was whether injunctive relief was appropriate, given that Vestergaard's secret information wasn't quite so secret any more. On this issue the judge picked his way carefully through a minefield of conflicting (or complementary) principles and case law. Granting injunctive relief (though not as much as Vestergaard had hoped for), he held as follows:

* In the absence of specific discretionary reasons for the refusal of an injunction, where a claimant establishes that a defendant has breached an equitable obligation of confidence and that there is a sufficient risk of repetition, an injunction will be granted unless there are exceptional circumstances;

* There had never been any sound authority for the proposition that an injunction could be granted to restrain continued misuse of confidential information even once the information had ceased to be confidential. Neither Terrapin v Builders Supply Co (Hayes) [1967] RPC 375 nor Cranleigh Precision Engineering Ltd v Bryant [1965] 1 WLR 1293 QBD was authority for that proposition [If Kats could blush, this one would be pretty pink -- he's sure he has persuaded a generation of students of the opposite, confident that Speed Seal Products Ltd v Paddington [1985] 1 WLR 1327 CA said this was the case];

* There was strong authority for the proposition that publication of confidential information brought the obligation of confidence to an end, regardless of whether the information was published by the confider, a stranger or by the confidant himself. This being so, no injunction could be granted to restrain continued misuse of confidential information once the information had ceased to be confidential;

* If the "springboard" doctrine was understood to mean that an injunction could be granted to restrain continued misuse of confidential information once the information had ceased to be confidential, then it should now be regarded as having been laid to rest [if you listen very quietly you can probably hear the sound of the IPKat's lecture notes being gently shredded ...];

* As the law stood, it was not clear whether an injunction could be granted to prevent a defendant from benefiting from past misuse, and in general the remedy for past misuse of confidential information was a financial one. .

* On the facts, Vestergaard had established misuse of their trade secrets. There remained a clear risk of further use or disclosure if an injunction were not granted, in which case neither damages nor equitable compensation would be an adequate remedy.

The IPKat is still taking this all in. Merpel's quite positive about it though. She points out that Arnold J offered two other possible interpretations of the springboard doctrine: (i) information might still be worth protecting if it had a limited degree of confidentiality even though it could be ascertained from public domain sources;(ii) an injunction could be granted to prevent a defendant benefiting from a past misuse of confidential information even if it was no longer confidential.

Mosquito nets here

Springboards here

Mosquito cat association here
Rusty Springboard here

Varec ruling values confidentiality ahead of transparency in tendering

The conflict between maintaining the confidentiality of industrial data and facilitating open competition for public contracts lay at the heart of last week's European Court of Justice ruling in Case C-450/06 Varec SA v Belgium, Diehl Remschied GmbH & Co intervening (click here for the IPKat's note on the Advocate General's Opinion in this case).

Right: for the not-so-tender -- real leopard tracks

To summarise the issue: back in December 2001 the Belgian government invited tenders for the supply of track links for Leopard tanks for which Varec and Diehl both submitted bids. Belgium didn't think Varec's bid met its technical selection criteria and also thought it unlawful. Diehl's bid, however, was unobjectionable, well priced and fitted all the criteria. Unsurprisingly the contract went to Diehl. In Belgian proceedings to annul the award of the contract, Varec wanted to see the details of Diehl's submission and was told it couldn't because that information was confidential. The trial court stayed the proceedings and asked the European Court of Justice a question for a preliminary ruling on whether the provisions of EU law relating to public tenders required the relevant authority to ensure confidentiality and observance of the business secrets contained in the files communicated to it by the parties to the case, including the contracting authority, while being entitled to appraise itself of such information and take it into account.

The European Court of Justice ruled as follows:

"[The law] must be interpreted as meaning that the body responsible ... must ensure that confidentiality and business secrecy are safeguarded in respect of information contained in files communicated to that body by the parties to an action, particularly by the contracting authority, although it may apprise itself of such information and take it into consideration.

Right: another Belgian phenomenon -- Leopold tracks

It is for that body to decide to what extent and by what process it is appropriate to safeguard the confidentiality and secrecy of that information, having regard to the requirements of effective legal protection and the rights of defence of the parties to the dispute and, in the case of judicial review or a review by another body which is a court or tribunal within the meaning of Article 234 EC, so as to ensure that the proceedings as a whole accord with the right to a fair trial".

The IPKat notes that the European Court of Justice appears to value the confidentiality of information ahead of the entitlement to disclosure in the interests of open competition and fair play, whereas Advocate General Sharpston, while recognising the need for confidentiality, appeared to give it a more subservient role as against the entitlement of bidders for a contract to see that competing offers are fairly evaluated. Merpel says, yes but where does this leave the unsuccessful bidder who has been rejected on technical grounds that it may believe are open to challenge?

How the leopard got his spots here
The IPKat's favourite Belgian tank here