No Liability For Misuse Of Confidential Information Without Knowledge

Author:Mr Mark Alsop
Profession:Charles Russell LLP
 
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Mrs Sig and Mr Larsen left Vestergaard to set up a competing company, along with Dr Skovmand (the previous Head of Product Development at Vestergaard, who was a consultant rather than an employee). The competing product was insecticidal mosquito nets. In other proceedings, the courts had held that Dr Skovmand was liable for misuse of Vestergaard's confidential information, and that Mrs Sig was also liable even though she was not aware that the new company had misused the confidential information - she had never been involved in product development and had no access to the relevant database.

The Court of Appeal allowed Mrs Sig's appeal, so Vestergaard appealed to the Supreme Court.

The Supreme Court dismissed the appeal and found for Mrs Sig:

She could not be primarily liable for misuse of confidential information since she had not received any. She could not be secondarily liable for misuse of confidential information as she had not known that Dr Skovmand was using or had used Vestergaard's confidential information. Similarly her lack of knowledge meant that could not be party to a "common design". The argument that Mrs Sig had turned a blind eye to the fact that Dr Skovmand had been using misusing...

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