Case No. HC07C02914

Ltd v Ellis [1987] ICR 464 C.A. at page 474F Nourse LJ said as follows:- “Although reference is frequently made to the judgment of Maugham L.J. in Wessex Dairies Ltd . v . Smith [1935] 2 K.B. 80, 89, the decision which established the general rule about lists of customers was that of this court in Robb v . Green [1895] 2 Q.B. 315, affirming the very elaborate and illuminating judgment of Hawkins J. [1895] 2 Q.B. 1, as Greer L.J. described it in Wessex Dairies Ltd . v . Smith [1935] 2 K.B. 80, 85. Mr. Fitzgerald sought to avoid the application of the rule to the present case by relying on the evidence already quoted from paragraph 16 of the first defendant's second affidavit, which is to the effect that he only used the card index for the purpose of looking up the addresses, freely available elsewhere, of people who were already known to him personally. I will only say that that evidence falls short of convincing me that that would be found at trial to have been the first defendant's only use of material which, on his own evidence, was prepared at his request nearly five years after he joined the plaintiffs and only some two months before he gave in his notice. Be that as it may, and even allowing for some differences of fact between the two cases, I think that Mr. Fitzgerald's submission is effectively disposed of by a passage in the judgment of Hawkins J. in Robb v . Green [1895] 2 Q.B. 1, 18-19. The value of the card index to the defendants was that it contained a ready and finite compilation of the names and addresses of those who had brought or might bring business to the plaintiffs and who might bring business to them. Most of the cards carried the name or names of particular individuals to be contacted. While I recognise that it would have been possible for the first defendant to contact some, perhaps many, of the people concerned without using the card index, I am far from convinced that he would have been able to contact anywhere near all of those whom he did contact between February and April 1985. Having made deliberate and unlawful use of the plaintiffs' property, he cannot complain if he finds that the eye of the law is unable to distinguish between those whom, had he so chosen, he could have contacted lawfully and those whom he could not. In my judgment it is of the highest importance that the principle of Robb v . Green [1895] 2 Q.B. 315 which, let it be said, is one of no more than fair and honourable dealing, should be steadfastly maintained.” 110. In my view this is precisely what the Defendants have done. I have already observed that there is no legitimate reason for them to divert to Concept and retain the vast amount of material and documents that clearly belonged to the Claimant. I accept the Defendants’ contention that it is important to distinguish between information on pieces of paper and the pieces of per themselves. The Claimant is plainly entitled to delivery up of their pieces of paper and any copies of them. 111. Whether they are entitled to an injunction restraining the Defendants from using some or all of the information on pieces of paper is an entirely different matter. I reject the submission by the Defendants that such is not included in the prayer for relief. It is to be found in paragraph 2 (ii) and the Claimant’s application for interim relief which initially came before me. Equally the Claimant is entitled to delivery up of all copies of documents containing the same material. 112. The Defendants have failed to persuade me that none of this vast array of material was of any use to them. It is an unattractive plea. If it was of such little use I cannot understand why it was taken or retained. If they had wished to use the material in the public domain and in their own heads that would not have been actionable. What the Defendants have done is shortcut that exercise in the same way in which the Defendants did in the Bullivant case. In other words they have sought to take an illegitimate step and provide themselves with a springboard so that their business is up and running “fully armed as it were” from the word go. There is no other reason why they would have all of this documentation. It is not theirs. They had no legitimate use for it thereafter. It is said that there was no mention made of an obligation to hand over the Claimant’s documents. That in my view is disingenuous. As I pointed out in the course of the evidence would they expect to be asked to hand back the company car or would they think they could keep it for themselves if not asked. The obvious answer is “no”. The same applies to the documentation. The documentation which they had legitimately whilst they were employees ought to have been returned. However the Defendants conduct goes beyond that. As I have set out above they helped themselves to some of the Claimant’s documents for post employment use and there can be no legitimate reason for that.113. It follows therefore that the taking and retaining of the Claimant’s documents is a breach of the Defendants’ duties of fidelity and Mr Rider’s fiduciary duty irrespective of whether or not the information contained therein was confidential. INTELLECTUAL PROPERTY CLAIMS 114. The Claimant asserts that the Mr Rider and Mr Stimson have infringed its Database Rights by a substantial extraction of information from that Database into the information held by Concept on its computer system.115. The Claimant in its Closing submits that the clearest examples are the Spreadsheet which Mr rider created on 20th April 2007 and which was created using information of The Claimant’s sales, and the electronic documents which Mr Rider admitted he transferred to Concept's Computer namely confidential Exhibit 2 ( The Claimant's Worldwide Customer Database) and item 6 (The Express Costings). It seems to me that the transfer of the Email addresses by Mr Stimson on 6th June 2007 also appears to be from the Claimant's Database.116. The principles applicable to this area are usefully reviewed in Goulding "Employee Competition" (OUP) paragraphs 3.161 to 3.180. The protection derives from the Copyright and Rights in Database Regulations 1997 (" The Database Regulations"). Regulation 16 provides:-“Acts infringing Database right 16 (1) Subject to the provisions of this part, a person infringes database right in a database right if, without consent of the owner of the right, he extracts or reutilises all or a substantial part of the contents of the database.” 117. The Claimant's case is based on extraction; the extraction being the items referred to above. I do not see how it can be seriously argued that the Claimant consented to the transfer to Concept. Whatever consent it gave to Messrs Rider and Stimson to utilise the database whilst employees was for the benefit of their employer as Mr Rider admitted in cross examination. For there to be a right protected the database must be arranged in a systematic or methodical way and be individually accessible by electronic or other means 9 Reg 12(1). The Confidential Documents referred to above satisfy those requirements in my view. The Database needs to be created as a result of substantial investment in obtaining verifying or presenting its contents (Reg 13(1)). Investment includes investment whether of financial, human or technical resources.118. The Defendants put the Claimant to proof of such investment. It was provided in Mr Worrall's 1st Witness Statement (para 28) and his 2nd Witness Statement (Paras 31-35). The evidence was not challenged; indeed Mr Worrall was not cross examined on it at all. The Claimant has satisfied me on the basis of his unchallenged evidence that it has made a substantial investment in the Database as required by the Regulations. Further it is plainly the Owner of the right.119. The Defendants submit there has been no copying of the Database. However the Claimant's case is based on extraction and I do not see how the admitted actions can be anything other than an extraction. Further it is clear that the extraction has been substantial. The extraction of confidential item 2 is the clearest possible example of substantial extraction. It is the act of transfer to Concept's computer that is the extraction and not as the Defendants submit the minimal use they subsequently made of it. I do not accept the extent of the use by the Defendants is clearly established at this stage but it does not help them if they extract substantial parts of the Database. They do not take it in my view for any reason other than to use it as they need from time to time.120. Accordingly in my view the Claimant has made its claim out in this regard. CONCLUSIONS 121. The trial is one for liability only. I have determined that the Defendants were in breach of their duty of fidelity and that Mr Rider was also in breach of his fiduciary duty in a number of ways. First they set about creating a rival business in breach of those duties. Second they retained or copied or transferred to Concept documents belonging to the Claimant with a view to using them as an illegitimate springboard to compete with the Claimant. Third they solicited the business of agents and some customers. Fourth they diverted some business opportunities to themselves.122. However the Claimant has failed to establish any of the information was confidential. 123. I have determined that the Defendants have infringed the Claimant’s Database Rights.124. I will consider what relief the Claimant ought to obtain in the light of this judgment. It may assist the parties if a make a number of observations in that regard. 125. First I have real doubts about the worth and enforceability of a springboard injunction. The Robb and Bullivant cases show that the injunctions restrain them from using the information contained in the documents but do not prohibit them from using the information if it can be shown to have been part of their memory (see