Securing the net: protecting trade secrets and confidential information

The importance of trade secrets in today’s commercial world is indisputable; one small advance in technology, design or manufacturing processes can make the difference between winning the commercial edge or falling behind the game. The Supreme Court’s decision on 22 May in Vestergaard Frandsen SA v Bestnet Europe Ltd highlights the very real problems facing businesses seeking to protect their know-how in the marketplace.

A major aspect of Vestergaard’s business was the development, manufacture and marketing of insecticidal bednets. In 2004, Vestergaard’s head of production and its sales manager for Europe and Latin America left to set up a rival company, eventually known as Bestnet. Soon afterwards, a consultant biologist who had worked for Vestergaard since 1998 joined the venture. By 2006, Bestnet had gone to market with a rival bednet product, Netprotect. Perhaps alarm bells were heard through the hum of mosquitos, as in 2007 Vestergaard sued, claiming that Bestnet and its directors were unlawfully using its trade secrets.

At first instance, the judge found in favour of Vestergaard and held that all three individuals and Bestnet were liable for misuse of confidential information. The issue of the liability of the former sales manager, however, was appealed; first to the Court of Appeal, then to the Supreme Court…

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