Court of Appeal considers breach of confidence damages

The Court of Appeal has dismissed an appeal to strike out parts of a breach of confidence damages claim. In a judgment that discussed procedural and intellectual property issues, and which reviewed the principles for assessment of damages in trade secret cases, the court insisted that the points in question were evidently arguable and should not be determined until the facts had been decided at trial.

The respondents to the strike out application (Vestegaard) produced mosquito nets with an insect killer impregnated into the fibre. In earlier liability litigation, the Court of Appeal found that Vestegaard’s competitor, the appellants (Bestnet), had misused Vestegaard’s trade secrets concerning the chemicals and ‘recipes’ for the nets. The court granted an injunction preventing the sale of Bestnet products created as a direct result of this breach of confidence, but refused an injunction in respect of certain later-developed products (the derived products) on the basis that they were sufficiently different from any of Vestergaard’s products, and considerable time had passed, that Bestnet might have independently worked out the formulations. The question of damages therefore arose, to be decided at a separate hearing.

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