UKSC 31
On appeal from:  EWCA Civ 424
Vestergaard Frandsen A/S (now called MVF 3 ApS) and others (Appellants) v Bestnet Europe Limited and others (Respondents)
Lord Neuberger, President
JUDGMENT GIVEN ON
22 May 2013
Heard on 24 April 2013
Mark Platts-Mills QC
(Instructed by Field Fisher Waterhouse LLP)
Alastair Wilson QC
(Instructed by McGuire Woods London LLP)
LORD NEUBERGER (with whom Lord Clarke, Lord Sumption, Lord Reed and Lord Carnwath agree)
The basic factual background
"keep absolutely confidential all information relating to the employment and any knowledge gained in the course of the employment and which inherently should not be disclosed to any third party. The absolute duty of confidentiality also applies after [Mrs Sig] has terminated the employment …".
The procedural history
(i) Dr Skovmand was under a duty to Vestergaard not to use any confidential information which he had acquired in the course of his consultancy work for Vestergaard;
(iii) The contents of the Fence database constituted confidential information, namely trade secrets, owned by Vestergaard;
(iv) Dr Skovmand knew of this confidential information as a result of working for Vestergaard, and he had appreciated at all times that it constituted Vestergaard's trade secrets;
(iv) Dr Skovmand had used such information about the techniques in the Fence database as a starting point for the development of the Netprotect product;
(v) By July 2004 at the latest, Mr Larsen was aware of the fact that Dr Skovmand was using confidential information in the Fence database to develop that product;
(vi) While in the employ of Vestergaard, Mrs Sig did not have access to the Fence database, and at no time did she have knowledge of any of the trade secrets which it contained;
(vii) Although, by September 2004, Mrs Sig was aware that the Netprotect product was based on trade secrets, she believed that they originated from Dr Skovmand's work for Intection (and, subsequently, Bestnet);
(viii) By June 2005 Mrs Sig was aware of Vestergaard's allegations, the Judge did not reject her evidence that she had not appreciated that the Netprotect product was conceived with the assistance of Vestergaard's trade secrets;
(ix) At trial, Dr Skovmand and Mr Larsen had put forward an untrue account of the development of Netprotect, including the production of forged documents, but there was no suggestion that Mrs Sig was involved in that.
"23. Mrs Sig was subject to an express obligation of confidentiality contained in clause 8 of her contract of employment. This obligation explicitly continued after termination of her employment. After termination, however, the obligation is only enforceable in so far as it prevents Mrs Sig from misusing [Vestergaard]'s trade secrets. In the absence of an express term, Mrs Sig would be subject to an implied term to that effect. Although Mrs Sig was not personally involved in devising the initial Netprotect recipes or carrying out the trials, she was closely involved in setting up … Bestnet and in the commercial side of the development of Netprotect. In my judgment, this is sufficient to render her liable for breach of her own obligation of confidence.
24. Counsel … submitted that Mrs Sig could not be liable for breach of confidence absent a finding that she knew that the initial Netprotect recipes were derived from the Fence database. I do not agree. A person can be liable for breach of confidence even if he is not conscious of the fact that what he is doing amounts to misuse of confidential information: see Seager v Copydex Ltd  1 WLR 923. I would agree that a person who is not otherwise subject to an obligation of confidence (eg by contract) will not come under an equitable obligation of confidence purely as a result of the receipt of confidential information unless and until he or she has notice (objectively assessed by reference to a reasonable person standing in the shoes of the recipient) that the information is confidential; but that is a different point."
Breach of confidence: preliminary observations
The first ground: the terms of Mrs Sig's contract
The second ground: common design
The third ground: Mrs Sig's unusual position