Injunctions
Injunctions are an essential remedy for trade secret disputes. An injunction requires a party to either do a specified act (mandatory injunction) or refrain from doing a specified act (prohibitory injunction). Failure to comply with an injunction can lead to fines, confiscation of assets or imprisonment. Injunctions can either be interim (meaning they are made at the beginning of a case) or final (meaning they are made at the end of a case, following assessment at trial).
When assessing whether to grant an interim injunction, the court is required to consider (1) whether there is a serious question to be tried, (2) whether damages would be an adequate remedy, and (3) who the balance of convenience favours (American Cyanamid Co (No 1) v Ethicon Ltd [1975] UKHL 1).
Usually, the potential damage caused by the release of trade secrets outweighs the inconvenience to the defendant in refraining from releasing or making use of that information. For example, the courts have been willing to grant injunctions to prevent ex-employees misusing confidential information (Sectrack NV v Satamatics Ltd (1) and Jan Leemans (2) [2007] EWHC 3003), and to restrain solicitors from acting against their client in which confidential information was relevant (Western Avenue Properties Ltd and another v Soni and another [2017] EWHC 2650 (QB)).
Damages
Damages are the most common remedy, the goal of which is to compensate the claimant for the loss they have suffered due to the defendant’s acts. How damages are calculated in a trade secrets case will depend on how the trade secret is monetised. If the claimant uses the information themselves to earn profits, damage should reflect fair compensation for what they have lost ( Universal Thermosensors Ltd v Hibben [1992] 1 WLR 840). However, if the claimant would have licensed or sold the information to others, damages should reflect the value of sale or licence of the information between a willing seller and a willing buyer (Seager v Copydex (No 2) [1969] 1 WLR 809).
A further category of “negotiated damages” is also available in trade secret disputes, based on the court assessed value of a “hypothetical bargain” for release of the defendant’s obligations. This approach requires the court to examine what the defendant would have paid had he, before breaching the contract, negotiated a release of the obligations to the claimant (Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798).
Account of profits
An alternative to damages is an account of the Defendant’s profits. This allows a Claimant to claim for the Defendant’s profits instead of traditional damages. This remedy is restricted to cases where claimant’s interest in performance of the obligation makes it just and equitable that the defendant should retain no benefit from their breach of that obligation (Attorney General v Blake [2001] 1 A.C. 268, [2000] 7 WLUK 824). The courts tend to use this remedy sparingly. It usually requires the infringement to be in relation to the Claimant’s proprietary information, failing which “negotiated damages” for a reasonable buy-out fee for the obligation would be appropriate (Vercoe & others v Rutland Fund Management Ltd & others [2010] EWHC 424 (Ch)).
Destruction or return of items in Defendant’s possession
In some circumstances, the court can order the destruction of confidential information, particularly where the court considers the defendant cannot be trusted to seek out and delete the confidential material itself (Arthur J Gallagher (UK) Ltd and others v Skriptchenko and others [2016] EWHC 603 (QB)).
The court can also order the destruction of any goods that infringe a trade secret under the Trade Secret Regulation 14(1)(iii).
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