Strand, London, WC2A 2LL
B e f o r e :
| VESTERGAARD FRANDSEN A/S
VESTERGAARD FRANDSEN SA
DISEASE CONTROL TEXTILES SA
|- and -
|BESTNET EUROPE LIMITED
3T EUROPE LIMITED
INTELLIGENT INSECT CONTROL LIMITED
TORBEN HOLM LARSEN
TRINE ANGELINE SIG
Peter Prescott QC, George Hamer and Robert Smith (instructed by Grundberg Mocatta Rakison LLP) for the Defendants
Hearing dates: 12-16, 19-20, 22-23, 26-28 January, 2-5 February 2009
Crown Copyright ©
MR JUSTICE ARNOLD :
|Dr Skovmand and IIC||19-27|
|The Danish proceedings||34-46|
|Trade secrets claims||39-41|
|Procedural history of this claim||51-79|
|Mr Vestergaard Frandsen||81|
|Phan Quy Chi (Chi Phan)||83|
|Dr Helen Jamet||84|
|Dr Robin Medenwaldt||86|
|Bruno Ducoulombier, Nicholas Rose and Jørn Vestergaard-Jensen||87|
|The Defendants' witnesses||95-102|
|VF's motivation for bringing the claim||103-111|
|My approach to finding the facts||112-115|
|Introduction to the technology||116-134|
|Linear regression analysis||135-140|
|VF's development of ZeroFly, Fence and PE bed nets||141-304|
|The terms of Mr Larsen's employment by VF||305-307|
|The relationship between VF and Dr Skovmand IIC||308-335|
|The information contained in the Fence database||336-355|
|65F.0503.5 and 65F.0304.5 recipes||346|
|The [REDACTED] formulation||356-357|
|The Netprotect database||358-360|
|The development of Netprotect||361-533|
|The source of the first Netprotect recipes||537-621|
|Dr Skovmand's story||541-543|
|The "preliminary formulations"||544-546|
|The Ciba recommendations||547-553|
|The odd numbers||555-573|
|Dr Skovmand's "mathematical protocol"||574-599|
|The seven improbabilities.||600-609|
|Dr Skovmand's "search pattern"||610-611|
|The necessary quality of confidence||626-627|
|Circumstances importing an obligation of confidence||628-642|
|The scope of the obligation of confidence: the Ciba recommendations||643-647|
|The scope of the obligation of confidence: trade secrets||648-660|
|The nature of the work||653|
|The nature of the information itself||654|
|The attitude of the employer at the time||655|
|Steps taken to protect the information||656|
|The separability of the information||657|
|The commercial value of the information||658|
|The usage and practices of the trade||659|
|Appendix 1: The Extract DB documents||674-711|
|Appendix 2: Dr Skovmand's evidence to the Danish court||712-718|
Dr Skovmand and IIC
The Danish proceedings
Trade secrets claims
Procedural history of this claim
"(i) instructions to all parties involved in the manufacture of the master batches and/or the product in respect of each of the following products:
(a) the product submitted to [IRD] for testing, resulting in the report entitled 'Phase I evaluation of LLINs from In-tection' dated May 2005…
(b) the product launched as 'Netprotect' at the conference in Cameroon in November 2005…
(c) the products sent to Insight Pharm [PanAsia] in Thailand in March 2006…; and
(d) the product licensed to Syngenta Crop Protection and sold as IconLife…;
(ii) instructions to any institutions or individuals involved in testing each such product."
"We understand that in practice most of the instructions to parties involved in the manufacture of the master batches and/or the products were given orally, for reasons of confidentiality. However, our clients have located the following documents from which the instructions would have been drawn and which we list using the numbering in the Order:
1.(i)(a) We enclose the recipe for this product which is entitled 'HDPE net forsøgsoversicht, Karur January 2005'.
1.(i)(b) We enclose a document entitled 'Trial, Karur 20 -, June 2005' and a second page containing time, test nr, denier and temperature. These relate to samples produced in testing using a series of different formulae.
1.(i)(c) and (d). Our clients have not yet located the instructions sent to the manufacturer in each of the these two cases but our clients confirm that the two descriptions relate to the same net and they will continue to search for the actual instructions provided. In the meantime, we enclose a detailed form of the description of the process used to produce these two products and confirm that they are the same as our clients' current product. This document is called 'Netprotect Production Manual' and contains the raw material specifications and recipes."
"As you will see from the electronic version of this database …, the document in tab 13 [i.e. 'extract DB Apr05.xls'] is made up of 3 different documents.
Our clients created a database (which we will refer to as the 'Netprotect Database') which contained all the tests and results in the development of Netprotect.
In the development history of Netprotect … , we deliberately chose to exhibit relevant extracts from that database to illustrate that history. The overall database (and what is contained in Tab 13 and called 'A' in the electronic version) was included in error in Tab 13…
The Karur 0705 results were also annexed in error to Tab 13…"
"A copy of the information referred to is enclosed with this letter. (See Tab 4 – Intelligent Insect Control – Ciba Speciality Chemicals Joint Project – objective – investigate the influence of Ciba additives on the migration and UV stability of insecticides in polyolefin films for tarpaulin coverings for the African market.)"
1. Unedited and original copies, in electronic form, of the databases (in their entirety and including the comments of Mr Skovmand) from which come the extracts described as 'Extract DB Oct04.xls', 'Extract DB Apr05.xls' and 'Extract DB July05.xls' attached as Confidential Schedule 2 to the Defence.
5. The complete and unredacted copy of the 'Fence Database' identified in paragraphs 115-116 of the witness statement for trial of Mr Skovmand.
1. To the extent that the information is not known to the Defendants, the recipe of (a) the net or nets submitted to the WHO as a result of the application in September 2005 by Intection ApS for WHOPES I evaluation…"
"Secondly, the defendants should serve a short statement from the appropriate witness, and when I say 'the appropriate witness' I do not yet know who that is because it is not clear to me whether the appropriate witness is Dr Skovmand or Mr Larsen, which will contain the following information and no more, that is to say, an explanation as to what the three sets of extracts are, how precisely they were derived from the database from which they were derived, and when."
"1. As I was the one who made the 3 'Extracts' of databases, I have been directed to explain what they are, how they were derived from the Netprotect database and when this was done.
2. The three extracts are the databases (or copies of the databases) which were made by me and provided to Bestnet in or about October 2004, July 2005 and April 2006 respectively. They were disclosed by Bestnet as relevant documents. To the best of my knowledge and belief I provided Bestnet with no later extracts."
"As to the basis of the analysis in the IPT report, it is flawed and invalid. I use statistical methods a great deal and I am shocked that IPT can put up this report as a serious analysis, when it does not employ proper statistical methods."
Mr Howe replied to Dr Skovmand's seventh statement in his third report. While he accepted some points made by Dr Skovmand, he rejected others. Overall, he essentially stood by the analysis in his first report. Few of Dr Skovmand's criticisms were put to Mr Howe in cross-examination. Moreover, the cross-examination of Dr Skovmand demonstrated that at least some of them were unfounded.
The Defendants' witnesses
VF's motivation for bringing the claim
My approach to finding the facts
"In a well-known passage in The Ocean Frost  1 Lloyd's Rep 1 at 57 Robert Goff L.J. (as he then was) said:
'Speaking from my own experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the independent facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses' motives, and to the overall probabilities, can be of very great assistance to a judge in ascertaining the truth.'
Thus before addressing the conflicts of evidence the fact-finding tribunal should first consider what is common ground, what is asserted by one party and not contested by the other and vice versa and what is shown by the documentary evidence. Once these matters have been ascertained and put into chronological order, it is frequently much easier to resolve the remaining conflicts. In resolving such conflicts it is of assistance to consider which version of events is the more likely."
Introduction to the technology
i) [Additive A] is [REDACTED]. The same chemical is sold by other suppliers under the names [REDACTED].
ii) [Additive B] is [REDACTED]. The same chemical is sold by another supplier under the name [REDACTED].
iii) [Additive C] is a [REDACTED].
iv) [Additive D] is [REDACTED].
v) [Additive E] is [REDACTED].
vi) [Additive F] is [REDACTED].
vii) [Additive G] is [REDACTED].
viii) [Additive H] is [REDACTED].
ix) [Additive I] is [REDACTED].
x) [Additive J] is [REDACTED].
xi) [Additive K] and [Additive L] are [REDACTED].
xii) [Additive M] is [REDACTED].
Linear regression analysis
Y = A + B1X1 + B2X2 + B3X3 ….
where Y is the dependent variable, A is a constant, Xi is the value of the independent variable i and Bi is the coefficient. A larger coefficient indicates a greater influence of the independent variable on the dependent variable, a positive coefficient indicating a positive effect and a negative coefficient a negative one. If a linear relationship between independent and dependent variables does not exist, then alternative non-linear techniques are required.
VF's development of Zerofly, Fence and PE bed nets
"We are in a situation where the capacity of our present manufacturing facility is highly overbooked. I am therefore forced to look for subcontractors and this gives us a number of problems. One of these is securing the secrecy of our formulation."
He went on to ask whether Ciba could mix the chemicals it supplied to VF into a single product delivered under "a pseudo-name like PermaChem or whatever".
"I will give you the exact formulation, but not over e-mail and not before we have a secrecy agreement with you. We are at the moment filing a patent on the PermaNet(tm)."
"With regard to the specific formulation requested by CUSTOMER to be developed using CIBA products for the finishing treatment of impregnated mosquito nets:
- CIBA agrees to treat as strictly confidential all written or oral information provided by CUSTOMER with regard to the specific formulation to be developed.
- Information related to the specific formulation will not be disclosed to any third party without the prior consent or agreement of the customer."
"The blooming is a function of solubility [of the deltamethrin in the polymer] and of migration. Migration is a kinetic process, but solubility is a thermodynamic process and the combination of these two parameters is temperature dependent. Therefore it will be impossible to predict [how to combine] and instead you had to try."
"Blooming" refers to deltamethrin rising to the surface of the yarn in the net.
"Objective: investigate the influence of Ciba additives on the migration and UV stability of insecticides in polyolefin films for tarpaulin coverings for African market.
Application/problem description: tarpaulin coverings are used to protect food bags from sun and insects in Africa. Insecticides are incorporated during the processing of the tarpaulin, and will migrate to the surface where there activity is needed. However, due to poor UV stability and uncontrolled migration of the insecticide its effect is not retained during the 2yr exposure requirement.
1) Evaluation of the Safety regulations for the handling and processing of the insecticide 'Deltamethrin' at Pontecchio.
2. If there are no safety issues the following formulations will be extruded in [REDACTED].
1) w/o [REDACTED]
2. w [REDACTED]% [Additive A]
3. w [REDACTED]% [Additive B]
4. w [REDACTED]% [Additive A] / [REDACTED]% [Additive B]
5. w [REDACTED]% [Additive A] / [REDACTED]% [Additive B] / [REDACTED]% [Additive H]
6. w [REDACTED]% [Additive A] / [REDACTED]% [Additive B] / [REDACTED]% [Additive J]
7. w [REDACTED]% [Additive A] / [REDACTED]% [Additive B] / [REDACTED]% [Additive I]
8. w [REDACTED]% [Additive F]
These samples will be weathered in a WOM [Weatherometer] (% Retention of tensile strength) for a period corresponding to 1yr exposure at 180kLys.
Before and after WOM exposure samples will be sent to IIC to measure the insecticide effectiveness."
"Suggestion: we will just test in a single lamellar film of LD (since this will be the outer film) to ease the process.
We will probably use [REDACTED] deltamethrin.
The first trials will be in India and the trial sample will be 25kg…"
"[W]hat is the way that [REDACTED] works?"
"Concerning the [Additive C], due to its composition it has a better resistance to acids and/or ag-chemicals. I can not tell you at this stage how much it will influence the blooming of the insecticide, but it looks important to investigate!"
"It matter how fast and how much the deltamethrin goes to the surface and therefore the plastic, which acts as container, should be able to retain or make the deltamethrin bloom (depended on the required conditions) without loosing mechanical properties. In this point of view, I think we have set-up the correct testing formulations and I am very interested to see the results."
"Good to see that your pesticide effect remains after a day of QUV-B exposure. The question is then how this correlated to reality.
In these tests, did you see any differentiation in blooming speed of the deltamethrine for the 8 proposed formulations? [REDACTED].
Depending on you latest experience, tell me which formulations and quantity you will include in the real life Pakistanian trials."
"We have – finally – received data from the chemical analysis of the samples UV treated with UV B for 16 and 24 hours. Knowing that Gembloux found a level of [REDACTED] g deltamethrin/kg polyethylene, the results are very good
[Table setting out results for samples with no UV protection, with [Additive A], with [Additive B] and with both]
It is evident that [Additive B] by itself gives very little protection of the deltamethrin, whereas [Additive A] [giv]es a very good protection. Further, it may be speculated that [Additive B] retards the blooming of deltamethrin and that may explain the additive effect obtained by the combination of the two."
"I referred to the active ingredients. The concentration suggested yesterday are the correct ones.
For the LDPE part of the terpauline [sic]
[REDACTED]% [Additive F]
[REDACTED]% [Additive C]
[REDACTED]% [Additive A]
[REDACTED]% [Additive B]
For the HDPE middle layer, you can use [Additive D]. However if the deltamethrin is present also in this part, we might consider another [REDACTED] next trial. Let's first see what happens with this formulation."
"I work with Torben Vestergaard on the development of bednets, and I would like to add a few comments to the discussion on adding LD polyethylene to HD polyethylene fibers to use these for bednets."
"We are in the process of developing a tarpaulin with incorporated insecticide. In order to prevent problems with the extruder at the factories and also to keep our formulations a secret we want to supply the products from Ciba as masterbatches."
In a subsequent email dated 19 February 2002 Mr Larsen said:
"I demand the following from the master batch producer:* He should be able to keep the identity of the chemicals a deep secret."
Mr Kulkarni responded by recommending two masterbatch producers in Mumbai.
"3: Polyethylene net with incorporated insecticide
3 final products to be developed here:
C: Netting for application to blanket.
Production trial 1st week of April at Shri Shetty.
A: Fencing trials with UV, deltamethrin and alpha-cypermethrin in heavy yarns.
B: Bed net trials with deltamethrin and alpha-cypermethrin in light weight yarns.
C: Blanket netting trials with etofenprox and permethrin. Yarns and mesh to correspond with insecticide demands."
"ad B: for bed net it probably has to be deltamethrin which is cheaper and more UV stable."
"Please do not discuss our recipe with anyone!!! I know you will not, but this is so important that I thought I better remind you anyhow.
You may also prepare the companies with which you speak, that they have to sign a secrecy agreement with us."
"… could you please change the labels on the drum and call it [REDACTED] instead? We would like to keep our recipe a secret."
"This polyethylene net [viz. Fence] was in the beginning challenged in the same way as mosquito nets by wash-dry-and-bioassay cycles. The reason was that this was the only challenge method VF had available as standard test. These challenge tests stopped in 2002 after it was decided in VF that a polyethylene mosquito net should not be developed."
The first and second sentences were repeated almost word for word in paragraph 59 of Dr Skovmand's sixth witness statement.
"Our bioassay has primarily been mosquito tests, but the net aims for a multi-purpose application, with mosquito control being only a small part."
"We have now been analysing the bioassay data on the net, and they are indeed very interesting. It seems likely that we can beat Olyset by far! But we have no data on effect of UV treatment.
So, could you please cut out 2 samples (30cm x 30cm) of the following:
7 – black, 8 –blue, 11 orange, 12 red, 17 light yellow and 19 light green.
These should be sent to Teknologik Institut in Copenhagen for UV B treatment 30 and 60 hours."
"Results on PE net with deltamethrin are very encouraging. Samples that only lasted for 4-5 washes was heated for 10 min at 80oC (WHO std.) and have now been washed for 21 washes and still holding on.
Samples No. 7 black, 8 blue, 11 orange, 12 red, 17 l. yellow and 19 l. green to be sent to Technological Institute for 30 and 60 hours UV radiation. After radiation to be sent to bio assay and subsequently to chemical analysis. Action: OS"
"5. PE bed net. Sum up from discussion under point 4. (OS, THL)
WHOPES test on PE bed nets?
9: Fencing: Including update from point 4. (OS, THL)
9a: Latest development in field test and cooperation with Bukhard Bauer (FK, OS)"
"We need to supply these products as MB to both India and Vietnam and possibly other countries in the future. In order to avoid duty problems in India and to create secrecy around our recipe, we want to produce the MB centrally and mix all 4 product in the right ratio into the same MB.
Since you have your main store in the region for these products in Singapore, it would be natural for us to also produce the MB there.
Do you have some good and reliable MB-producers in Singapore, that could perform the manufacture, marking and shipment of the MB to our producers. It is crucial that the MB-producer we work with is reliable, because our recipe will be revealed to him. He will of course have to sign a secrecy agreement."
"[Additive G] might make the fibre brittle.
[Additive A] will in such a thin fibre be gone very quickly.
UV protection: combination of [REDACTED]% [Additive O] and [REDACTED]% [Additive C] 3 years in Africa (guess)"
"Besides what has been substantially covered in the points above, this product has been finalised in Deltamethrin.
As this is a price product it is highly essential that we design protect the pyramid shape. Action FK.
This will be sent for WHOPES evaluation ASAP. WHO will make the claims themselves as they test phase one. This will be sent latest end October, and will send from either Spain or Italy."
"In order to understand better the effect of our additives on the deltamethrin performance, could you please send me a summary of the results you obtained in the bio-assays and other tests? This will help us to recommend a more optimal LD package for the mosquito nets."
"I would like to have the actual recipes deleted from the minutes. There is no reason why this should be distributed around the world with the risk of a third party picking it up."
"The most convenient method for giving a fast data review is the attached file from STATISTIX in which I have included 20 analysis of 20 different formulations of tarpaulins. They include 5 ingredients, and the dependent variable is percentage remaining insecticide after 60hr UV radiation.
The data clearly says that the only significant parameter for the survival of deltamethrin is [Additive A] and the probability that [Additive B] contributes is nil. [Additive G] has no impact. Other ingredients have little impact, and surely not significant.
In a trial with impregnated fibres where 6 formulations were tested, [Additive F] and [Additive C] were varied at constant rates, whereas [Additive B] and [Additive A] were varied independently. Analysis of these showed again, that [Additive B] had no impact on deltamethrin survival, whereas [Additive A] had high impact and [Additive F]/[Additive C] also had significant impact. This was again confirmed in bioassays.
Therefore, I cannot agree totally on Davids conclusion. My suggestion will be to test 2 rates of [Additive A] in central core and laminate, and to separate the effect of [Additive C] and [Additive F]. Tests separating effect of [Additive C] and [Additive F] have already been made with fiber net, but we lack feed back from chemical analysis. It would be nice to have absorbtions spectra for all Ciba UVG filters, also for future product developments perhaps with other insecticides. Could these be forwarded in print, David?
Besides the role of these chemicals for the insecticide, UV protection of the PE should also be considered. I understand that [Additive B] or [Additive O] can play such a role and suggest that [Additive O] is chosen for an amount that only secure the PE, but for a period of 2 years. That level should be chosen as a non variable. David should suggest a level.
I further understand that [Additive F] can be replaced by [Additive P] (from my memory, the number could be another), which should be tried also.
These samples can then be tested in accelerated UV test and ALSO sent to Thomas in Kenya or a laboratory closer to Sahara to get an max UV load and then cut off pieces should be analysed after 6 and 12 months.
Meanwhile, the [Additive B] level can be reduced to the level suggested by David also in coming productions."
"Remember to warn Valerie when you send samples somewhere, so she can add a code number and enter in a database. So far, we use one database for all PE nets without caring whether they are used for jarlids, sewed on blankets, use for tse tse nets or whatever. We may split it up later, when specific formulations are developed for each area."
"We have several UV protectants build in the netting material. The complete concentration is not very informative, since the UV protectants serve different purposes. The exact recipe we can obviously not disclose, since it is a business secret of VF and also under patent application.
The complete concentration of UV protectants is approximately [REDACTED] g/kg."
"We are impregnating HDPE for different purposes with different insecticides:
a. For bed nets and Fencing - Deltamethrin has been used. Formulation no. 11 has been the most effective so far.
In the laboratory in Salatiga, after passing 9 washes it failed, then the same samples has been re-heated. Now the samples are still continuing and passed 25 washes.
b. For Blanket – We are using formulation no. 28 with Permethrin …"
"We also discussed that so far HDPE net, formulation no 11 has passed 25 washes and still working – Please advise why are we washing HDPE net when the washing is not required in HDPE fabric."
"I will try to speed up the new databases, that can be distributed in a wider forum, so that you can find these results yourself in the future.
2. Why do you say washing is not required for HDPE netting? The netting material is among others meant for bed nets. For fence we do perform UV tests, but these tests are very cumbersome and are therefore only performed on a very few promising versions."
"These challenge tests stopped in 2002 after it was decided in VF that a polyethylene based mosquito net should not be developed."
As the last three documents I have quoted demonstrate, this is wrong. In April 2003 the development of PE bed nets and Fence were still proceeding in parallel.
"We agreed sometime back to make a database, where we have reduced the information amount, in order to use this for wider distribution. I remember having seen some preliminary work on this. What is the time frame for this database? We need to make these databases for both PermaNet®, hegn and tarpaulins. Why don't we change the name of the 'hegn' database to 'fence'? It seems a little awkward to write 'hegn' in English."
"This recipe replaces recipe No 11
Approved, 22 May 2003
Shri Shetty Torben Holm Larsen
Elastic Enterprises Ole Skovmand
Vestergaard Frandsen A/S".
"… It was however made clear that for future orders VF will have the right to claim if the Deltamethrin content are low to errors in the production (high temperature in extrusion, not confirming to agreed recipe etc.)
Stitching of bed nets with Deltamethrin incorporate net fabric is at present a problem for EE…
New secrecy agreement signed during the meeting."
"To help you, I have made two files with data from sun exposure of tarpaulins and fence, first fence (all data, all bioassay, strictly confidential)
I have checked I can open them with Xcel, but that does not mean that Ritu also can. Let me know, Ritu, when you have Lotus on your computer, that will safe a lot of my time for updating you."
"… I feel this project went far too fast from the first trial we made together to production, and would prefer that it goes back to lab status to solve the various problems we know we have: apparently slow KD (bauers test), high losses of insecticide in production even at the lowest temp of extrusion possible in Shris factory, leakage of insecticide in water (probably that on the surface) especially in flush test."
"I am not happy about having both MB and net recipe on the same piece of paper, it gives away all information, please make it on separate papers in future."
"We are constantly working on the improvement of the PE netting, and we have just decided to put more resources into this product. In our opinion there are so many aspects where you can use a properly working insecticide incorporated PE netting, especially with UV protection incorporated, that this product is a must for us. We shall not rest until it is fully developed."
"We can add [Additive A] to the formulation, but we [k]now more than well, that when all ingredients are added as separate masterbatches, [Additive A] will increase the migration speed of deltamethrin and hence the loss in the extrusion process.
But what will happen if we use a mixed masterbatch for deltamethrin and all ingredients EXCEPT [Additive A] that is added separately as a separate masterbatch?
That may reduce the loss in the extrusion process and on the other hand help a later migration and perhaps give some UV protection and – now I am wildly optimistic – some reduced wash off … "
"But it does show the problem I talked about yesterday. We need to find a way to increase the blooming of deltamethrin AFTER production, without having it during production, where it just leads to great losses. This is the dilemma I call the Olyset dilemma.
Since we are more intelligent, we should solve it.
The suggestion made yesterday could be a first trial: two types of premixed masterbatches.
We should also play with the conc of migration inhibiting chemicals, we are perhaps overdoing."
"We also have the possibility to work with the somewhat lower extrusion temperatures they are using at the PE yarn manufacturer in West Bengal that Ritu visited last week."
"Thanks, let us remember that, that could move the compromise for [Additive A]."
"Please be aware that these are top secret and for your eyes only. I have password protected the documents."
"It [Additive A] has been put back into PE Yarn, as its removal slowed/stopped the migration of active ingredient to surface.
This has impact on all the trials we are doing on PE nets, and would have to be considered/amended in the following programmes: PE bed nets, Fencing, ZeroFly Blankets, ZeroFly Tents and Jar lids."
It also states under the heading "Matters arising":
"2) PE Yarn
TVF and THL visited one Chinese and two Taiwanese Companies in Week 36.
The Bengali yarn manufacturer is being evaluated by NG and RA.
A complete overview will be made by THL by end September.
OS has found a lab extrusion company in Germany and is taking a quotation on this."
"I am sure it is not necessary to point this out to you, but I will do it anyway: Please be aware that the recipe you are using for these 3 new MB is bound by our mutual secrecy agreement and I will not hesitate to take action, should the recipe become known to any third party."
"… PE yarns are now used for many things in VF, but they are basically the same, and it is optimal for me that I can calculate on any PE yarn whatever it is used for.
Therefore, the database fence will be rebaptised 'PE yarn' and all kind of yarns including those for central weave of tarpaulins will be entered in that (also old data). This database is especially made for data analytical purposes
The fence database will be continued under that name (to avoid confusion of old numbers, but will be for test se fence and agro only. I do not know where we will put mosquito net PE, but for the moment it can rest in 'fence'."
"… for the moment 10 databases are running: bednet, fence, pressening, blanket, tent, competitor, masterbatch, Pe yarn, THL db, tse tse (hope I have not forgotten one!)"
"I have been thinking some time on this problem. There are two considerations of importance in these databases, and perhaps they can be treated differently.
For me, it is important to be able to analyse data together that are related. I do not care if a PE net is used for agricultural fence, backside of carpet, curtain or whatever, as long as I know the application and thus can see that the right type of tests are applied and can draw data from any tests of PE net into analysis. This is why I have asked for this combined database."
He went on to say that data entry in the big bednet (i.e. PermaNet) database was taking a lot of Ms Natera's time and could perhaps be done in Vietnam, that he did not like the idea of having the database on the internet for data entrance because of the risk that it could be hacked into and that putting an effective firewall into 10-10 could easily stop the system.
"I could not agree more. The solution is to move the data entry to India and give Ritu the responsibility for this. This is the kind of job she would be able to handle well. By doing that the database stays inside VF and India has quite OK data transfer speeds."
"no problem with that with the various PE databases, since Ritu is involved in the trials, the database form will force her to enter all data.
For the bednet data, where data are generated in Hanoi, Salatiga and Montpellier, I am not convinced it is a good idea. It would be better to have someone in Hanoi to enter data under the eyes of Chi.
For me, it is of course no argument that the database is on a VF computer…"
"The extrusion test in Brabender was for me very useful. I learned a lot about extrusion being among real experts, about various types of extrusion screws, of measurements that can be carried out to see impact of various ingredients on viscosity at various temperatures (they have a special instrument for that), types of HDPE and our formulation.
These are experiences that I gained partly by listening to all their explanations and partly by working with our own formulations….
What I learned by doing was:
1. HDPE quality – there are so many qualities available that we need to test a series of these to find one that is optimal for the temperature regime we prefer to use…
3. [Additive A] has a profound impact on [REDACTED] in the extruder. Without, [REDACTED]e increase to the double, but there is little difference between [REDACTED] and [REDACTED]%. If [Additive A] is removed, we should perhaps think of a [REDACTED] to decrease [REDACTED] and enabling us to run at [REDACTED]."
"a realistic time schedule for the fence project is found in our proposal. We have time to make 2 tests before the summer to attain a production in late March early April. These will be no more than an interim guidance, and it will not be an optimal solution but just an improvement compared to the existing (which is poor)."
"As mentioned, a reasonable time schedule can be found in the EU proposal, everything else would be a gamble. VF decided to gamble…"
"VF had a specific decision in a combined marketing and product and development meeting that polyethylene nets for mosquito control would not be developed."
In that witness statement this decision is dated to 2002 (see the quotation from paragraph 19 set put above). Similarly, in paragraph 21 of his second witness statement Dr Skovmand said:
"The so-called VF PE bed net does not exist. FK refers to a product made for a sociological project in Burkina where OLYSET and PermaNet were compared. This net was specifically produced for that study to interpret preferences, not to introduce a new VF product. On the contrary, VF had the year before decided NOT to develop a PE mosquito net. No entomological data was ever collected for this net, so VF does not even know if it is worked."
Again, this dates the decision to 2002 since the Burkina study was in 2003. (I note in passing that Dr Skovmand's statement that the PE bed net was specifically produced for that study is wrong, as is his statement that no entomological data were collected for the PE bed net.)
"To my mind, it is not worth the time to work on data from Shri Shetty; just move the production away from him and let us get things under control. Rob is starting rain tests now with various formulations made in Brabender, Germany, and we will see how much we loose from rain treatment with various formulations. Then we will choose in consequence of that and produce perhaps in China where we hope to find a better factory (Torben has identified). Then hopefully the nightmare of Plastic [sic] Enterprises is over."
"We are a worldwide HDPE supplier and we are involved in a project concerning Insecticide Impregnated Nets. We will have a trip to Denmark the week 5 and we would like if possible to meet you or your colleagues the 27th of January 2004 to discuss a possible collaboration."
This email appears to have come out of the blue, but it is evident that Innovene was aware of VF's interest in this field. The email led to Mr Larsen and Mr Lambert arranging to meet at a trade fair in Geneva on 29 January 2004, although Mr Larsen's evidence was that the meeting did not materialise.
"As already told Mikkel verbally, our test in China was no success. We didn't succeed in forming a yarn by extrusion at [Temperature 1]. The yarns kept breaking.
There are probably several reason for these problems.…
Subsequently we've had an emergency meeting with the people from Shandongtex, and it turns out that the tests they've been making on extruding yarn with deltamethrin have been conducted in another and smaller extrusion plant. During these tests the work has been successful at a temperature of [Temperature 1].
We may therefore still have a small chance of getting some yarn produced for the fence test in Denmark. The technician from Shandongtex who made the tests at the low temperature has been involved all the time during our test, and he is competent. He has agreed to run, at the small plant, the production of the 300kg of yarn needed for the DK test.
However in order to do this we need to get some more MB from India and send it Shanghai….
It should be noted that we'll probably still have to decide on the formulation to be used in the DK test without knowing the result of the UV exposure. Quite a lot of guesswork will therefore be involved in this.
So gentlemen it is decision time. Shall we:
1. do what we can to make the 300 kg for the DK test, under the conditions outlined above and well aware that the formulation we'll use will probably not be the correct/final formulation.
2. cancel the test in DK and thereby give Ole and me and our new man in India 1 year to find the correct formulation, the correct PE grade, the correct extrusion, net and MB supplier, etc., well aware that this will postpone the fence project for 1 year but also save us a lot of test costs on products that we won't need anyway."
"The fence formulation that Torben and I made based on reflections and the preliminary analysis of the Brabender sheets has now been compared to the experiences gained on these Brabender samples after having the analysis of Chi and Huong on samples returned from Kenya and the UV exposure in Germany (report will follow, I still miss a few data from Huong).
Actually, the suggestion we made and already realised by Ritu in India is not too bad, and should give better results than the existing formulation used last year. Especially, the UV protection and ratio of insecticide on the surface versus inside the yarns should be much better."
"1. In the production of yarns, we loose from 10 to 60% of the deltamethrin, and it is not consistently related to anything known (except when we know they do not follow temperature demand in extruding).
2. [Additive A] was originally put into yarn to protect against UV as in tarpaulin. Ciba then told us that this absolutely waste, since [Additive A] would migrate fast and then disappear. We then took it out. The result was a slower migration and loss of bio-activity. We then put it back in the last formulations, but it seems that whatever it did to migration during the extruding, the blooming deltamethrin was gone. We now await new analysis of yarns that will be presented as an accelerated migration technology. We will then see if surface extractable deltamethrin is at a higher level. As written previously to-day, I called the Indian office Saturday and arranged that such samples are forwarded to Chi.
If such a heating will increase the deltamethrin level, this fence is our best choice.
3. In the formulation tested in the field last year, there was no [Additive A]. In the new formulation, the level is [Figure 6] g/kg. "
"1. Heating or not, [Additive A] migrates itself very fast to the surface….
2. Thanks to its mobility, [Additive A] supports actively to the immigration of Deltamethrin to the surface…
3. [REDACTED] plays important key on the rate of immigration of DELTA in PE…"
"Chi has now made a small series of test with nets from last year and nets from this year.
The conclusion is very clear. Blooming rate is 8 times in the new net than in the old net both with heating and without heating.
That means that the new net has a much higher capacity of replacing deltamethrin at the surface after UV destruction.
UV light can also destroy the deltamethrin inside the yarns. Last year, the fence material lost 50% of its deltamethrin due to weathering, and since the blooming rate was slow, the surface concentration must have been very small.
With the new net, the surface concentration will be higher since the blooming rate is higher. The loss inside the yarns will probably be smaller because of the UV filter, but this UV filter migrates very fast, so the protection may be gone before the end of the season.
In conclusion, the new net will probably work better for the first year, but none of the nets are likely to be good to use again the year after. Since this is a one year study, you should use the new nets, NOT the old."
"Please be assured that we would be highly interested in cooperating with you on the incorporation of insecticides into PE.
As agreed I would encourage you to substantiate your ideas on cooperation between our two companies.
In the mean time I have a question you might help me with.
In order to scale up production we are looking for a good, stable and qualitative good manufacturing facility for PE nets in India. I have been informed that one of the largest and most modern PE net manufacturers (extrusion and knitting) is located some 2 hours drive from Bangalore in India. They are only producing for the domestic market as far as I have been informed. I have been unable to locate this manufacturing unit so far. Could you help me?
Alternatively could you help me located a good manufacturing unit for PE net in either China or India.
We agreed that a possible date for a meeting at our office here in Demark could be June 18th in the morning."
"The 18th of June is ok for me. Please find hereafter the requested information. We have in our product mix the well defined Eltex HDPE [Grade I] grade for such application."
"We should prepare the next field tests very soon. You need to make 3 different formulations for me that we send to Kenya and Benin for field exposure and to Chi for surface extraction and surface migration rate and to Huong for bioassay and perhaps also to Dr Tring for bioassay in Plutella (diamond back moth).
The receipt will be variations of that you made last time, with lower of [Additive A] and other levels of [Additive C]."
"The data from China is so good compared to the same production in India…
Delta+Risomer are found at almost 100% compared to target data. It shows very little loss in production. Please be noted that R-isomer is semiquantified only, but we can conclude that very little loss of Delta except the loss due to R-isomerisation."
"No new formulations [of Fence] were tested after 2003, and most development work was done in 2002."
As the two emails I have just quoted show, this is not correct.
"We are a Danish group working with among others mosquito nets for international aid.
We are looking for Indian companies that can produce HDPE nets for us. We have a technology for incorporation of insecticide into the HDPE fiber and we need a manufacturing unit to produce the material for us. "
Mr Larsen also sent emails to Nackul Plastics and SS AG International ("SSAG") in the same terms. He received a reply from Dr B.J. Fernando of SSAG and entered into email correspondence with Dr Fernando.
"We are getting close to the point where we start producing PE net in large scale. Fortunately for you this will mean that our need for MB will increase accordingly.
To get this process running I am looking for new HDPE net suppliers, the one we have do not fulfil our needs for capacity and speed.
I know that there are many HDPE net producers in the Karur area in Tamil Nadu. I also know from WHO that there is at least 1 that is big and have good equipment. I need to find this supplier or any other as good for that matter.
Can you help me with this?"
"The product we are producing is a HDPE netting fabric, warp knitted. Square meter weight from 40-70g yarn diameter 0.1 – 0.5 mm. Mesh size 25 holes per square cm.
The net is used in agriculture, construction, mosquito bed nets etc."
"In my last comment to UV exposures, I forgot an important point. Chi took samples made previously without [Additive A] and compared with the last productions made with [Additive A]. At same conditions, deltamethrin survive 60% with [Additive A] and 30% without, this is a clear indication that [Additive A] helps.
Our data across samples for polyethylene products (excluding tarpaulins) shows that [Additive A] survives better than deltamethrin.
Therefore, Ciba was not right stating that [Additive A] would not help and would be burned off very fast and not protect deltamethrin.
At least we can conclude, that [Additive A] is there to stay until a better UV filter is found."
"The formation of isomers and the loss of deltamethrin can be reduced by the addition of [Additive C], but this also reduce the blooming later, so a proper choice of concentration is a delicate balance."
"The transition of databases to Hanoi goes slower than I thought. And you only have the bednet database, but besides that fence and tarpaulin databases are updated regularly and then there are the smaller ones for shadenet, blankets.
Rather sooner than later, you will have to take that over also, or you decide to hire Valerie yourself to do so.
Beside the databases, she also follows samples sent for UV exposure and a few other special treatments, and survey that they return at the right time. Finally, she checks the production plans and see that she gets data from all productions.
She is doing a very good job, she is a smart and intelligent assistant, but since she left Montpellier, she mostly worked for you."
"I have had a meeting with Mrs Oanh today – together with Chi.
It is still to my interest that the total database is moved to Hanoi.
I will however, need to be assured that the database is well operating before I let go of your kind support Valerie, wherefore I kindly ask you for support for another month – can you do that?"
"I have a bit the impression that the existing database – made by me – is now only used by me?! I do no more analyse production and test samples together, too many other factors are different.
So, the two databases can just as well be separated.
But I could be hit by a car tomorrow – God forbidden - and then the rest of these databases are more or less useless for a period until someone found the time to sit down and get them organised so he or she can understand.
So, I would strongly recommend that your database group speed up their work. Valerie will stop working for me January first….
I would therefore strongly recommend that you find out what info people use (you, Gopi, Lars and Benny), get an idea on when the databases are transferred and working, and if this is not before January first, find out what to do."
"As you know, [Additive A] accelerate deltamethrin migration to the surface and also provide some UV protection. But in a meeting with Ciba, we were told that the migration was very fast (weeks) and it was the destroyed (in yarns), so it was a waste of money. We (being THL and me) then took it out, but that gave nets with lower effect despite high concentrations of deltamethrin. At the same time we found out that [Additive A] was much more stable in the product than Ciba told, and I (THL had left) then put it back.
To know what products have [Additive A] and which have not, you need to look into the fence database. In the future, [Additive A] will be a component.
Never listen to experts, always try, see and measure."
"I personally think that this product is not ready for registration, though I well know that this will be badly accepted in VF. We will have to prove that we have a method of production that gives a constant product, and we are not there."
"This move raises a lot of practical problems. The database work is already transferred to Hanoi, so this is not a problem. Nobody but my self can probably figure out in the old databases, so I will keep a copy of them and you can always ask on historical data. They will not be opened to other people and will not be used for other purposes, except perhaps to finish this article on wash methods and implications.
Let me take the products one by one and give you an update:
Fence: There has been no new developing in fence this year on the formulation. All productions during the last 2 years have been carried out by your Indian staff (lately Gopi), and I have as you only reports to refer to. The basic problem is the loss of deltamethrin and [Additive A] in production, which makes it difficult to relate formulations to bio-efficacy. Field tests are in the hands of Finn and Rob, so I have been out of this for so long."
The terms of Mr Larsen's employment by VF
"The Production Manager shall keep all internal information about the Company and its activities confidential. He has been informed that the Company's business goals are based on methods which have been developed in the Company and are therefore to be considered business secrets."
The relationship between VF and Dr Skovmand/IIC
"before or during the early phase of the co-operation with the First Claimant, Mr Skovmand entered into an oral contract with the First Claimant to develop, on a consultancy basis, disease control textiles for the First Claimants to have produced for them for sale."
In paragraph 15 of the Defence, this contract is referred to as a "contract for services".
"In the beginning, VF had sale of Permanet and IIC had product and production development. Using a factory in Vietnam, VF could not go on without IIC, IIC was contract (oral) bound to work with VF on nets and tarpaulins."
An email from Dr Skovmand to Mr Vestergaard Frandsen, copied to Mr Kjaergaard, dated 24 January 2002 contains a passage to similar effect.
"… during this period [sc. late 1998 to late 2000] the confidentiality and commercial sensitivity of the product development carried out by Mr Skovmand was well understood by him and was an issue which he had explicitly discussed with Mr Torben Vestergaard Frandsen."
"OS understood that the information arising out of the work we gave him was confidential to VF, and that VF owned the rights in this information, and indeed we orally discussed both of these issues a number of times."
Consistently with the Defendants' pleaded admission, this evidence was not challenged in cross-examination. Furthermore, when Mr Vestergaard Frandsen was cross-examined about the December 2000 agreement (as to which, see below), he repeated it:
"… we already had discussed the confidentiality and the rights to the parts [semble products] that would come out of it. We did that already when Ole was taking over from Matt Holmes and John Carroll."
"Q. You see, what I suggest is that there was never any intention
or suggestion that my clients could not manufacture nets in
accordance with recipes that you supplied in the course of
this relationship. My clients were entitled and free to make
nets in accordance with any of these recipes they felt like?
Q. And they would not have to pay you any royalty in respect of
A. No, there was not (inaudible).
Q. And it was not contemplated that you would be free to use any
of those recipes for your own manufacture of nets or to permit
third parties to manufacture nets in accordance with those
Q. Was that yes, you agreed with me?
A. Yes; this was the general concept, yes.
Q. It would make no conceivable commercial sense that you could
take any of these recipes and simply licence Olyset, Sumitomo?
A. Of course not. That would be unethical.
Q. It would be inconsistent with your relationship?
Q. So that if someone had come up to you from Vestergaard and
said, 'Dear Dr. Skovmand, As between the two of us,
Vestergaard and IIC' -- Skovmand – 'the information that is
developed in relation to the products is confidential.' You
would have said, 'Well, of course it is.'
A. Yes, probably."
"I am now back in the office and MVK has given me your proposal for a confidentiality agreement with BF/IIC/OS and VF A/S.
I have looked for the present agreement between OS/IIC and VF A/S but cannot find it in the relevant folder.
I know that such agreement exists – you have mentioned this to me, and both MVF and TVF have confirmed this."
"There is no wr. agreement between VF and IIC so you don't have to look for it. There is only a gentleman agreement between Torben, Mikkel and myself which was made simply as follows:
vestergaard Frandsen will not use any other consultants or companies than IIC in its product development without a prior OK from me (us), and VF is the first priority and has one month to decide on products developed by or plans to develop within the business area of Vestergaard.
This obviously provides a very intimate connection of the two companies and based on this I have rejected companies which through Guillet or directly to me have proposed cooperation.
But you are very welcome to put it on paper, especially as VF's business area has become a dynamic entity."
"… the secrecy agreement you have with VF covers my activities. The deal with VF is quite simple: the products I work on within their range of interest have a first refusal with them. If they accept, we work with them (we are actually 3 persons I IIC), if not, we can go wherever we want. bednet is clearly a VF project and so is tarpaulin."
"In principle, this is not a concern between IIC and VF, but in this special situation it is important that we have full clarity about the employment situation of Rob in IIC, especially because VF A/S has no formal agreement with IIC but just a gentleman agreement."
"IIC has to-day an oral agreement originally made with Torben Vestergaard-Frandsen, which simply says: When IIC develops products and patents within the business area of VF, then VF has a first right of rejection. The other way round, when VF has a product idea within the expertise of IIC, they first ask IIC to help with the development.
Examples of a products well defined inside the agreement and made within the agreement: Permanet, Zero Fly.
Example of a product that to-day is outside the VF business area, but nevertheless developed inside this co-operation: Fence for agriculture. It is expected that VF will develop this market."
"So far we have had 5 years of cooperation even without a written agreement, where the main points were that we would not cooperate with someone with your skills and you would not cooperate with any competitor within textiles or plastic…."
"Finally a very personal matter: As you have not signed a new agreement with the company there is still only one agreement between us, and that is the one you and I made verbally many years ago, where we agreed that you would never work for a competing company, that is within textiles and plastic for disease control and agriculture. If you break that promise you will set me in a very bad position here."
"OS's role was to oversee the product development of the ideas originated by me, although other VF employees … were also very much involved in the development work."
Ms Chan's evidence in cross-examination was to similar effect:
"What I meant is Ole is not a director of research and development. I mean he is head – he is really working – he is key person working for research and development. He is head of that work. I am not talking about the position."
"He would speak to [additive suppliers such as Ciba] regarding what additives could potentially be used in VF products… As far as I know, OS always made it clear to Ciba that he was working on behalf of VF, even though he was working through IIC."
Again I accept this evidence which in my judgment is supported by the documentary evidence and to a considerable extent by Dr Skovmand's own evidence.
"Regarding your previous emails about the involvement of the Vestergaard Frandsen group: yes of course they are involved … through you. I fully understand their interests and yours in obtaining new chemicals and trying new formulations and combinations, but Kate Aulman has clearly steered me away from that avenue of work; and in addition I have no more direct access to these chemistries than you do apparently. Actually I had thought all along that you and V-F were the same entity and that you were regularly examining new chemistries in your work but that is not so I see."
The information contained in the Fence database
i) A – "Sample NR".
ii) B – "Date". This generally appears to refer to the date of production of the yarn.
iii) C – "Type". This generally provides an indication of the purpose of the sample.
iv) D – "recipe". From row 40/sample 31.1 onwards this is generally used to record formulation or recipes numbers for repeat samples manufactured using formulations set out earlier.
v) M – "insecticide". This records the type of insecticide.
vi) Q – "ins. i g/kg". This records the amount of insecticide introduced into the formulation in g/kg.
vii) Y – "[REDACTED] [Additive A]". This records the nominal [Additive A] content in g/kg.
viii) Z – "[REDACTED] [Additive B]". This records the nominal [Additive B] content in g/kg.
ix) AA – "[REDACTED] [Additive C]". This records the nominal [Additive C] content in g/kg.
x) AB – "[Additive G]". This records the nominal [Additive G] content in g/kg.
xi) AC – "LD pure". This records the LDPE content in g/kg.
xii) AD – "[Additive D]". This records the nominal [Additive D] content in g/kg.
xiii) AE – "[Additive F]". This records the nominal [Additive F] content in g/kg.
xiv) AF – "[Additive E]". This records the nominal [Additive E] content in g/kg.
xv) AI – "analyse where". This identifies the laboratory or laboratories which analysed or bioassayed the sample. These are typically identified as "VCH" (VF Chemical Laboratory, Hanoi), "VBH" (VF Bio Laboratory, Hanoi), "Sal" (the VRCRU in Salatiga) and "Gembloux" or "Gem" (the WARC in Gembloux).
xvi) AK – "analysed deltamethrin content g/kg". This records the deltamethrin content found by chemical analysis of the sample.
xvii) AO – "% af tilsat". This records the analysed deltamethrin content as a percentage of the nominal amount.
xviii) BH-BK – "after UB B radiation 30 Hr mg/kg", "60 hr", "30 HR%", "60 HR%". These columns contain the results of UV exposure tests after 30 hours and 60 hours in terms of deltamethrin content.
xix) BN and BO – "90%" and "%". These columns refer to columns I and J in the "analysis result" spreadsheet. They set out the number of washes at which performance of the net reduces to a 90% and 80% mortality value.
|11||8 and 31||21 and 39|
|16||4, 24 and 42||6, 33 and 41|
|17||5 and 24||16|
|20||3, 24 and 36||4, 31 and 38|
The [REDACTED] formulation
The Netprotect database
The development of Netprotect
"Our aim is to rope in 1 customer for starters: IKEA. This is to create sales and provide capital.
- price of IKEA net. Trine to buy 2 nets in Aarhus. Torben to negotiate with Shandongtex and take 1 net with him to VN and talk to MK/Tan Quang/10-10/a.o. perhaps a cautious chat with C.K./Akrungaroon."
"Purpose of the meeting: To discuss the development of a LLIN based on alternative technology and how to speed up this process. To discuss the set up of a company to handle this business and how to handle the situation that THL has a competition clause in his contract.
We agreed that it is necessary for us to have our own laboratory set up. We need to separate from VF now in order to avoid future claims that the technology development was paid by VF. There are the following needs:
Physical textile laboratory:
Within a time frame of 2-3 month a fully operational textile lab will be installed at Ole's new house in Montpelier (MP)
Until the lab is established in MP we will be using the facilities at TEKO in Herning.
Chemical analysis laboratory:
It is not practical to install an HPLC at the lab in MP, since we will have to install this equipment at the production site in the near future. We have the following alternative possibilities:
- MP University …
- Rudolf Chemie …
- We ask Chi to look for external analysis possibilities in Hanoi at institutes, universities etc. This will require that we let Chi in on our project. We both agree that we should do so anyway. We might need her to remove some records from the laboratory and we could easily use her for setting up lab facilities in the region. OS and THL will meet with Chi on the 15th May in Hanoi….
- Hanoi Chemical Lab, Dr Lan. We used this laboratory in VF before we had our own HPLC. This is last possibility since we were not too happy with the results.
The future solution is to install an insectarium at the lab in MP. ..
For now we will use OS contacts at bioassay lab in Burkina Faso. We need to invest in a washing machine for the lap in MP immediately, since the lab in BF cannot do washing. … We could run wash test at LIN for a limited period of time.
For the laboratory impregnations that we are doing now, we will use the following tests: Chemical analysis at 0 and 6 washes, Bioassay at 0 and 6 washes. We will use bioassay at 0 washes as criteria for go/no go decision on the individual samples in order to save laboratory time and cost.
THL/TS will run a large series of impregnations in the lab in Herning. We will work with the following parameters: Deltamethrin/Alfacypermethrin, +/- [Additive A], 80/120/150°C, Rucoplast PES/Rhodia DS910/Rhodia duramul/Dicrylan AC at different concentrations. Detailed test plan has been discussed and agreed. Dicrylan AS has been ordered from Ciba and Rucoplast PES from Rudolf Chemie. Trials will be run when chemicals have been received, probably in week 18. Concentrates containing insecticide, solvents, dispersant and UV filter were produced. Action THL/TS
One of the most critical success factors for our new company is how we overcome the competition clause in THL's employment contract with VF. There are basically 2 scenarios:
A. THL gets fired from VF. In this case there are no problems
B. THL has to resign from VF. In this case he will be formally restricted from working in areas that are in competition with VF.
TS/THL will visit Tan Quan in HCMC in week 19 to investigate the equipment at the factory and the interest of the company in working with us on the LLIN project.
THL will visit Shandongtex in Shanghai on the 10th May, to inspect a net factory with a capacity of 300.000 pcs. Per month."
"24. I wrote a letter (which I have been informed by the Defendants' solicitors VF have exhibited at ('TVF1') outlining my frustrations. The response (also I am informed exhibited at 'TVF1'), of course, came from Torben VF.
25. I later became aware that two of VF's employees, Torben Holm Larsen ('Torben HL') and Trine Sig, were setting up on their own as 'Intection' to produce mosquito netting and wanted me to help… "
"29. … in the early summer of 2004, Torben approached me to see if I would like to assist a new company that he planned to create. He had thought about something I had said to him some time earlier, which is that I had an idea to develop a polyacrylide insecticide treated mosquito net…
30. … I went to a meeting of potential investors in Kolding. I thought the time planning which was presented to the potential investors was very optimistic and totally unrealistic, which I told them. I suggested that the first product should be a polyethylene net…
155. I had a first meeting with the group behind Intection in August, 2004. … The recipes given to Torben before the meeting were for polyester nets, not polyethylene nets…."
In fact, as I shall relate below, the meeting at which Dr Skovmand suggested that a PE net should be developed took place in May 2004.
"Your company were recommended to me by WHO and I found your details on the Internet."
"I share your point of view as regards its time complications. There is no product yet, but nevertheless sales are expected from October. You say that it can easily take one year before you have a finished and registered product. That is inconsistent with the fact that Trine is expecting to receive salary already from August. I cannot see what kind of sales and marketing she should do in the time. So you have to ask how sensitive you are (Trine in particular) to a postponement of income. I do not know how far you have come with the development of the product…"
"We completely agree. The problem is that Torben and Trine will then try to start with a Polyethylene net (as opposed to Permanet, which is a polyester net). Due to the fact that Sumitomo's Olyset net (approved by WHO, but is a rather inferior product based on PE but tested with acetone extraction and not washes as stress factors) is racing ahead, they believe we can get in that market. The problem is then that PE nets I cannot make in my lab. They can only be made in a factory, i.e. someone must make a trip out there, make tests and have them evaluated in bio and chemical assay. The travel costs in that connection must be paid for, and the test lab must be paid. Torben and Trine were in South America – a market VF has not really touched – and have identified some very interested customers at government level. Based on our Fence tests we can make some good guesses as to how a formulation should be, but we had huge problems with the then Indian manufacturer, who could not control his production (last time he delivered unimpregnated nets, which in bioassay and later in chemical analysis turned out to be full of deltamethrine). Torben has during a trip to India identified some major and hopefully better manufacturers. But it is still uncertain when such a product can be in place, i.e. developed and tested for washability and continuous activity, so I have suggested I join with capital on 1 January but do not stop earning money with VF until Intection has a product that has been tested and considered OK. The WHO approval may come later, precisely on the South American market it is not so important – as opposed to the African, donor-dominated market. As regards the rest of your comments, I can only agree to them, and I will forward them to Torben."
"A fact that you seem to ignore is that we are pressed for time because there is a window of opportunity in the market at present as everybody is screaming for a competitor to Permanet. 1 December is the time when we expect sales of PE nets in the budget – that is what Ole estimate at our meeting in May. If this is to be realised Trine can not just sit back and do nothing until then; a proper preparatory sales effort has to be made. Furthermore she will lose her hold on the market and her contacts if she does not start contacting the market already in September/October. … That we have chosen to launch a PE net first, and Ole, do not say that it is Trine and I who want that, at the meeting in May you agreed to make that part of our plan, is precisely due to the uncertainty about the time schedule for the development of the PES net. At the same time we know that the product we can make will be better than the Olyset net in several regards (mesh, weight, efficiency, regeneration and possibly fire resistance)."
"We are a European company working with incorporating insecticide into HDPE and have developed a technology that can be used in mosquito nets….
At the moment we are setting up a production facility in India hence therefore we are looking for suppliers of master batches within India."
"I had two years of chemistry at University and 29 years experience in formulations, but I decided I knew too little about the plastics themselves. Therefore, in 2005, I contacted Yves Lambert of Innoven, a leading producer of polyethylene and partly owned at that time by Solvay who develop new polyethylene types, for help. I met Mr Lambert at the meeting in Johannesberg where I had the final discussion with Mikkel VF."
"During a malaria meeting in South Africa in September 2004, where I had participated for IIC (not VF), I was lucky to meet Mr Yves [i.e. Mr Lambert] from Innoven, with whom I spoke. I got his business card. Innovene is one of the biggest polyethylene producers in Europe and they also make new polyethylene types, specially developing them for customers. I contacted Mr Yves in October 2004 and went with Torben to meet him in November 2004 to discuss with him and his colleagues what sort of polythene mixes would be appropriate for making insecticide-filled blankets."
Similarly, Mr Larsen says in paragraph 32 of his fifth witness statement:
"Ole had discovered from talking to Innoven that the crucial factor was the plastics mix and had Netprotect's plastics mix specially formulated for the product by Innoven. I met Yves Lambert of Innoven in November 2004 with Ole."
"The products we need for the MB are the following:
Please check availability and price with Ciba…
Please be aware that this is confidential information and this should not be communicated to any third parties."
"All information shared regarding formulation will be kept strictly confidential."
"Oct. 2004: Development of recipe and production method for insecticide containing master batch.
Oct. 2004: Initial production trials run at Shobika Industries, only involving insecticide with polyethylene, to evaluate the production equipment of Shobika Industries. See 'Shobika Initial'. Also trials with different MB concentrations."
The first of these entries goes on to say "See 'insect-control ech 7 et 10 janv(1).xls'" and the second goes on to say "See 'Extract DB oct04.xls'" in the column headed "Tests performed".
"This led to the first masterbatches being produced in September/October 2004, for test purposes i.e. for testing the machinery and process, rather than establishing a formulation for the product."
|Netprotect yarn samples||VF sample||Deltamethrin g/kg||[Additive A] g/kg||[Additive B] g/kg||[Additive C] g/kg|
|9-10||13||[Figure 2]||[Figure 4]||[Figure 6]||[Figure 15]|
|11-12||8 & 9||[Figure 2]||[Figure 14]||[Figure 6]||[Figure 15]|
"From the results [of the October 2004 tests], it was clear to me that there was too much sample variation. The 6 formulations made could not be evaluated….
In my view, the problem was not in the extrusion process, but simply because Torben, in an attempt to be economical, had asked for concentrated (40%) masterbatches, which makes homogenous mixing much more difficult."
Mr Larsen said in paragraph 33 of his fifth witness statement:
"In January 2005, the results of the trials were submitted to LIN/IRD and for the chemical analysis at Gembloux. At this time Ole and I discussed the way in which we would deal with the results although we realised they would not arrive for some time. In fact, the results were not good"
"Intection should run a series of trial in Karur with ELTEX, to see how it performs. This would probably be in January. Action: HJ to send address of Sivalakshmi to Yves. Yves will supply 300kg sample of ELTEX to Karur."
"Nov. 2004 Initial contact and discussions with Innovene on development of special mixtures of PE to enhance insecticide migration, facilitate low temperature extrusion and secure strength of the final net material. See 'Innovene 1'."
'Innovene 1' consists of two emails from Mr Larsen (as Hans Johnsen) and Dr Skovmand to Mr Lambert and a colleague dated 29 November 2004. Given the previous contacts recorded above, I do not accept that the "initial contact and discussions with Innovene" occurred in November 2004.
"As you probably know, my partner in Pure Culture I/S has set up a new business. This business may be regarded as a competitor to Vestergaard Frandsen A/S. In this respect, I have therefore, after consultation with my trade union concerning my non-compete clause, decided to take the following steps:
It should be emphasised that in the period in which the non-compete clause applies, I have neither been, am being nor will be involved in my partner's other business."
This statement was quite simply untrue.
"- IIC transfers money to Intection next week and is subsequently a shareholder of Intection.
- The net technology (netprotect) or other technologies developed in under the auspices of Intection, IIC is a shareholder of Intection, belongs to Intection."
"Neither IIC nor I ever became a shareholder of Intection. IIC became a shareholder of Besnet Europe Ltd. IIC paid Intection DKr 300,000 as a help for the start up company. This was paid on 31 December 2004… "
In cross-examination Dr Skovmand maintained his denial that IIC became a shareholder in Intection, and claimed that the payment was a loan, but was unable to explain the terms of the bank transfer note. By contrast, Mrs Sig accepted that Dr Skovmand had purchased shares in Intection and that the shares were issued.
"Results are particularly good and I encourage you to continue further testing on these LLINs."
"Jan. 2005: Initial trials with Innovene polymer and different UV additives. Nets from this trial sent to LIN/IRD and to Walloon Agricultural Research Centre (Gembloux)."
"We know already that LIN achieves good results with PE nets, and at the time of writing this email we're about to find out how far our samples get at LIN – if they reach 30 washes, I guess we must conclude that the PE concept is working even though we are uncertain about the exact concentration of insecticide on the samples at LIN."
"We only have the chemical results I told you already. These show that the variation in deltamethrin is reduced, but it is still very big. This can be further improved, when a final masterbatch is made. It does mean that currently all bioassays must be based on average results of 5 samples, and not of single samples per formulation!! These 5 samples must of course be taken a bit apart to give a true average of the net. Chemical analysis is the same thing."
"Net for field trials:
60 nets recipe 1 (white)
50 nets recipe 3 (violet)
50 nets recipe 8 (dark blue)
50 nets recipe 1 (white)"
"April 2005: Further trials with different PE mixtures and UV additives. 3 formulations from this trial sent to Indonesia for field trial. Results from this field trial received in August 2005 and published at the MIM [Multilateral Initiative on Malaria] conference in Cameroon October 2005. See 'Recipes for field trial 0405'."
i) In paragraph 56(ii) of his fourth witness statement dated 20 June 2007 Mr Larsen identified NPT1 as a [Additive A] masterbatch, NPT2 as [Additive C] and [REDACTED] as an [REDACTED].
ii) In a response to a request for further information which was verified by a statement of truth signed by Mr Larsen on 24 January 2008, the Defendants said that NPT1 and NPT2 were "believed to be single ingredient Masterbatches", yet in the next sentence said "NPT1 and NPT2 are probably mixed Masterbatches", but without specifying the contents of these masterbatches in either case.
iii) In the same response, [REDACTED] was identified as a mis-print for [REDACTED], a [Additive C] masterbatch.
iv) On pressing, the Defendants said in a letter dated 30 April 2008 "NPT1 and NPT2 are Deltamethrin".
"So the positive side is that they are extremely wash resistant, not even half have been washed off after 35 washings, and here is probably a product that can't be exhausted by washing in practice.
The negative side is the big spot to spot variation, however, if one used WHO's test technology, you'd cut out 5 samples of a net, cut them into small pieces and look at the average for 1 net and then it's the value of that net. A number of whole nets extracted from a production or order then all have to (if a large order, then except for one or two) be within the declared average."
"The WHO cone test measures knock down and mortality of susceptible mosquitoes exposed in a small chamber to a piece of treated netting (25 x 25 cm) for a 3 min exposure time. … KD effect is recorded 60 min post exposure and percentage mortality after 24 hours. Mosquitoes able to fly are counted as alive. However, it is commonly observed, when testing pyrethroids, surviving mosquitoes able to fly with several legs missing, sometimes up to 5. This phenoment of leg auto-section related to pyrethroids is likely to occur in the field as well as the lab. For this reason, we also record mosquitoes surviving with 3 legs or less, since these mosquitoes are unlikely to survive in the field (not able to bite and/or to lay eggs). We count them as 'functional mortality (dead + alive with 3 legs or less) by opposition to effective mortality. Difference between effective and functional mortality is sometime important and this double count gives a better estimation of the overall killing effect of the insecticide."
"Once washed, net samples were laid vertically in clotheslines at room temperature during 2 hours. After drying, nets were stocked in a clamtic chamber at constant 27oC and 80% RH until next washing. According to In-tection recommendations, net samples were placed in alufoil and stored at 40oC during 48 hours after the last washes and before the next bioassays (weekend period)"
"Two samples of LLIN were tested after different wash regimen. Samples 19.1 and 19.2 were tested at 0 wash, samples 19.3 and 19.4 after 5 washes, and samples 19.5 and 19.6 after 10 washes. Finally, samples 19.7 and 19.8 were tested after 20, 25, 30 and 35 washes. This cycle of wash-dry-wash was repeated until KD effect after 60 min falls down below 95% and/or mortality after 24 h falls down below 80% (WHO thresholds). In this case, the samples were tested after a 5 min exposure time. If efficacy was still below WHO thresholds after a 5 min exposure, regeneration procedure was carried out by storing the samples at 40oC during 48 hours in alufoil ('heat assisted' reactivation). Samples were then tested after a classical 3 min exposure time."
"Figure 2 showed that effective mortality remained above the cut-off point (WHO threshold) until 25 washes (we did not consider the decrease of mortality to 78% after 20 washes as significant). However, after 30 washes, effective mortality decreased under the cut off point (61%). With a 5 minutes exposure (or after 'heat assisted' reactivation) efficacy of the net samples was restored (mortality was 94%). The same trend was noted after 35 washes, where a longer contact period on nets allows mortality to increased above the WHO threshold (82%).
Figure 2 showed that functional mortality was above 80% (WHO threshold) until 35 washes. Exposure of 5 min and/or 'heat assisted' reactivation allowed efficacy to recover 100% for both samples at 30 washes."
"I would now recommend to Intection to test these mosquito nets following standardized procedures as recommended by WHOPES for laboratory testing of LLINs (WHO/CDS/WHOPES/GCDPP/2005.11)."
"Icon Life has been evaluated by the WHO collaborating centre Laboratoire de Lutte Contre les Insectes Nuisibles (LIN) at the Institut de Recherche pour le Développement (IRD) using the methods established for WHOPES Phase I (Guidelines for laboratory and field testing of long lasting insecticidal mosquito nets – WHO/CDS/WHOPES/GCDPP/2005.11). These studies have demonstrated that Icon Life has the ability to control malaria vectors for at least 35 washes."
"We were in contact one month ago, discussing Intection's possibilities for submitting our product for WHOPES evaluation. At the time you kindly requested us to wait for the new guidelines to be published (in 3-4 weeks time).
Please let me know if these guidelines are no available? And if yes, where I can find them.
For your information, we have just received the final report from our testings at LIN, France and also we have started field trials in 2 different countries. And of course we are eager to get the WHOPES evaluation started as soon as we know the importance of this evaluation."
"In order to have a good relationship in the future, I would like to propose you a mutual Secrecy Agreement."
"We go ahead with the HDPE net while at the same time talking and making plans with Innoven, i.e. we start by submitting to WHOpes (still no reply from Zaim) and at the same time commence sales to get some experience."
"I … think your plan about going ahead with the present HDPE net while at the same time talking and making plans with Innoven is the only way to go right now."
"Siva Enterprises (SE)
9 trials were run, basically the trials were aiming at trying out some alternative chemicals in the recipe and 2 trials were designed to try a new polyethylene polymer from Innovene.
The trials went well except 1 trial that were designated with the colour Dark Blue….
The trials with Innovene polymer went extremely well. We ran the second trial at only [Temperature 2] (normally we have problems keeping below our max temperature of [Temperature 3]) and we could have went further down in temperature….
We started bulk production of Netprotect® late Friday. There was a great sense of excitement surrounding the event. Unfortunately the first 50 kg did not run well and we created some 30 mg of waste. I decided to raise the temperature in the extruder to the limit ([Temperature 3]), reduce the speed of the screw and switch from blue colour to white colour. This improved the running of the yarns and even before the switch of colour was effected, the production was running smoothly. CONGRATULATION INTECTION – WE NOW HAVE A PRODUCT!!!!!!!
The following will be sent to SGS, Chennai for chemical analysis:
2 samples of each colour from bulk production (blue and white)
Siva will send samples of net from all 9 trials and 2 production run to DK. THL will send to BF, together with samples of net from field trial in Indonesia, for bioassay.
Mr. Vikram Bhadouria
Vikram visited us while we were at Siva. We discussed the future MB situation.
Vikram will immediately make a trial a single MB – I gave him the recipe – to see if it is possible. I underlined that it is of outmost importance that only very few people at ALOK knows this recipe. He promised me that he, Amit and one other trusted employee would be the only ones to know the recipe."
"the recipe of the chemicals for the purpose of adding to polyethylene for giving it a long lasting insecticidal effect and the process by which it is incorporated into HDPE yarns for creating the Products."
"July 2005 Further trial with Innovene polymer. See 'visit report India 0705'."
"Visit report India 0705" is Mr Larsen's visit report quoted above. The entry goes on to refer to Extract DB July05.xls.
"It seems certain we have a loss somewhere, which is OK, I guess, as long as we can keep it constant (of course. I'd rather be without it)."
"Intection hereby kindly request WHOPES to evaluate a new LLIN, Netprotect®.
WHOPES I & II:
We kindly request WHOPES to run tests, WHOPES I & II of Netprotect at the same time.
Selection of net:
For your information we have taken a random selection of 20 nets from a running production of 50,000 nets. Hereof we have send 15 nets to LIN, France and 5 nets we have kept for your own reference.
The tests are to follow the protocol for PermaNet as this has been the protocol for Netprotect under the product development.
A copy of this letter has been sent to LIN, France together with the nets. Nets left India … 15th August 2005.
Nets are being produced in India at Shobika Enterprises …"
"Samples of Netprotect for WHOPES evaluation
As per agreement with Ole Skovmand I hereby forward you 15 samples for testing."
"At the end of 2005, IIC had a preliminary recipe that was used to make nets for WHO. It was slightly modified during 2006 to become more economically viable without compromising quality and the new formulation was sent to WHOPES II for simulated field evaluation including simulated field washing and is now used in production."
"the 15 samples have been sent directly to you and and at the same time, a letter has been sent by Trine to WHOPES.
The purpose is to start WHOPES I and II evaluation of these nets according to the WHO protocol."
"there was never sent any nets to WHO in September to my knowledge, the processs of sending the nets would have been expected to start some months later after WHO had accepted the request and Intection had provided a tox evaluation. It never came so far before VF had stopped the process with a letter to WHO claiming that Netprotect was a copy of Permanet and thus patent protected."
It can be seen that this is not an accurate account.
"Sept. 2005 Refinement trials with UV and other supporting ingredients."
No supporting documents are cited in the Schedule, none have been disclosed, there are no entries in the Netprotect database datable to September 2005 and no work during this period is mentioned in the Defendants' evidence.
I have asked LIN to run tests of the product for my own knowledge of product performance. These tests showed that the net is of a regenerating type if the net is first washed 3 times and then tested repeatedly to see if and when a level is reached. I know well that this is NOT a WHOPES I test, but with this information I now know that it is behaving like a regenerating net as the prototype Olyset although with a faster regeneration (5 days in the test carried out). I therefore kindly request WHO to consider using the Olyset test model and the fast track model as discussed on the Informal Consultation on the development of guidelines for testing/evaluation of long-lasting insecticidal mosquito nets held in WHO headquarters, Geneve 4-7 this year.
Where to send nets:
Please inform where to send nets and how many."
"You have asked for 3 sets of information and confirmation, which I shall happily give you.
One is the ownership of the Net Protect technology. This product is developed by my company Intelligent Insect Control and we own the technology. It will be licensed out for production, but we will control production…
Another is about relations ship to Vestergaard Frandsen. … We are not involved in any legal dispute with Vestergaard Frandsen.
The third is the origin of the insecticide used for the production of Net Protect. IIC has used deltamethrin and alfa cypermrthrin from Tagros during the product development phase and will continue to use this for production. In connection with license agreement(s) it will be a condition that license receiver(s) use a WHOPES recommended insecticide producer of one of these two chemicals."
"In October or November , Torben was in Kahrur to produce 6 formulations. Two of these were used for bioassay and chemical analysis. High levels of [Additive C] were tested together with [Additive L]."
This is not mentioned by Mr Larsen in his fifth witness statement.
"Net Protect must be as different as possible from any VF product whatsoever, so I'm happy about the last recipe I sent. It's really different and expectedly also a lot better."
It is not clear which recipe is the "last recipe" referred to, but it may be the [REDACTED] formulation discussed below.
"I hope we all agree that until we have sent a product to WHOPES and made official recipes for use in production, Netprotect is a working title of an experimental product, even though we've had a lot of them packed in real packages to be given as samples and possible for sale to minor customers, who will of course receive the same message.
Tests performed at LIN of the first recipe are not the same as tested in the field in Burkina and Sumba or the second time round on LIN. The tests on Sumba clearly indicated a future direction for a final recipe and away from the previous recipes, which look more like Fence recipes. Why on earth would I test 3 products if I felt the recipe was finished? Besides, we still need results from our polymer chemist's friend parameter test of extrusion to be able to optimise net strength, which must also be in place for the final recipe and production guide.
Lastly, we need to select insecticide, having run parallel with alpha-cypermethrine and deltamethrine. Out of price concerns and other concerns I've said we should choose alpha-cypermethrine. That way we can avoid a market profile as 'yet another deltamethrine' product.
I've also worked with new types of additives to decrease the loss of insecticide in the process and in use, a promising area I have no intentions of letting go.
I cannot accept that the work on a preliminary recipe for concept testing of small-mesh polyethylene nets suddently becomes a final product…"
"Nov. 2005 Laboratory evaluation of different mixtures of Innovene polymers in relation to strength of yarn a.o. factors. Performed at Innovene pilot plant."
The entry goes on to refer to two documents referred to as "Lara 13760 II". These do indeed appear to show tests on Innovene polymers (namely Eltex [Grade I] (HDPE), Eltex [Grade II] (MDPE) and a mixture of Eltex [Grade I] with [Grade III] (LDPE)) carried out on 29 November 2005. These documents were emailed by Mr Lambert to Dr Skovmand and Mr Larsen on 23 December 2005.
"As you may know one of the main point in producing insecticide impregnated nets is process control and low temperature. This is an area where we have done too little with additives.
I send you attached a page that you can check on the internet about how to make masterbatches with [Additive M]. Very good blending (preferably from powder is needed); these ingredients are a bit expensive, but so is the insecticide that we currently loose due to process temperature problems, so it is worth doing.
The final concentration should be max [Figure 12] g/kg, it would be interesting to try [REDACTED] g/kg, [REDACTED] g/kg and [Figure 12] g/kg for the final product. The masterbatch could be made as a [REDACTED]% concentrate.
You may already have good experience with [Additive M] masterbatch production, if so, so much the better.
Let me know what you think. We better prepare this work for the next trials"
"… everyone is saying that WHOPES will succeed because it is a formality more than anything else."
"In January 2006, two larger scale test productions were made, one the standard formulation and the other with a lower level of insecticide and [Additive A] (to see if the starting surface concentrations would then be the same)."
"In March 2006, I went to Karur to test 9 formulations, this time testing alternative producers of [Additive A] (called [Additive A] when from Ciba), different mixes of polymers and two levels of [Additive C]. Samples were tested in 3 round by the bioassay laboratory in Burkina together with two nets from a competitor of PE nets (from China, the product did not survive the WHOPES evaluation). The tests also included the first tests with mixed masterbatches: until this time, all masterbatches have been one ingredient per masterbatch. The results showed that it was possible to mix everything in just one masterbatch, but for better economy, we chose to have the insecticide alone and at low concentration in one and the rest of the additives together in a more concentrated masterbatch."
i) The first group comprises recipes 1 and 4-9. These are based on a 100kg batch size made from masterbatches NPTD1, [REDACTED], [REDACTED], [REDACTED], "NPTS3" and "NPTS2" together with [Additive M] and [Additive T]. NPTS3 contained [REDACTED] and NPTS2 contained [REDACTED], which are the same chemicals as [Additive A] and [Additive B] respectively, but supplied by Sunny Chemical Corp Ltd of China. Recipe 5 includes "[Grade I]" and recipe 6 includes "[Grade II]" in place of "hdpe".
ii) The second group comprises recipes 2 and 3. Recipe 2 contains NPTTOT, while recipe 3 contains NPTMIX1 and NPTMIX2. These are mixed masterbatches. In recipe 2 NPTTOT contains all the additives, while in recipe 3 the additives are split between NPTMIX1 and NPTMIX2.
iii) The third group comprises recipes 8 and 9, but this time for a 25kg batch size.
"Netprotect® from IIC showed good performance against susceptible mosquitoes of Anopheles gambiae through laboratory assays and met the WHO criteria to undergo Phase II testing (at least 80% mortality and/or 95% KD after 20 washes). One should note that after 20 washed, the KD effect remained maximal (100%) whereas mortality fell slightly under the cut-off point (76%)."
Nov. 2006 Several refinement production trials at Shobika Industries involving alternative UV chemical and other supporting chemicals (Antioxidants, Silicone etc.) Arriving at the present recipe as described in 'NPT details.doc' as earlier served."
"Please run this production test as soon as possible.
Then send me 5 m2 of each sample.
Please use the sample numbers attached (126 to 130)."
"[The Manual] indicates in error that the HDPE content was only [REDACTED]% where in fact it was about [REDACTED]%. Mr Skovmand has confirmed that [REDACTED] of LDPE was used per 28 kilogram total batch. Professor Stevens has used these corrected proportions in Table 3-7 of his report."
"Nov.2006 Final recipe delivered to WHOPES phase II testing."
"The formulation which we submitted for the WHOPES II recommendation test is No.
131134 i.e. 130 compositions were tested before it, combined with different product conditions and test conditions."
He went on to say in paragraph 69 that Netprotect contained [Additive K] and [Additive M], although this statement was not tied to the formulation submitted for WHOPES II.
"81. In December 2006, there 4 tests planned in which LLDPE (low linear density polyethylene) was to be tested against low density polyethylene, in order to see the impact on release rate but only one I think was made. Before the test above
werewas analysed, we had to decide on the formulation to be sent to WHO for WHOPES II. We chose [REDACTED] Plus [Additive L] and with MDPE and LDPE added ([REDACTED]% of total polyethylene). This then became the recipe for Netprotect in January 2007. The current product is not identical to the test product of January 2005, and this one was different from the product sent to WHO in 2006 for the WHOPES I test. The one sent to WHOPES II is slightly different, but of course it cannot be very different or we would have had to have redone WHOPES I.
84. All in all, over 130 samples from 6 series of experiments were made, tested and analysed to arrive at the formulation for Netprotect submitted for WHOPES II testing in
(insert date)Spring 2007. …
98. … As stated before, we did however change this [formulation] slightly in November 2006, especially in the aspect of the polyethylene composition. This is the product supplied for WHOPES II and sold now."
The source of the first Netprotect recipes
"30. IIC subsequently developed 'NETPROTECT' from scratch without any reference to the way in which any VF product had been made (beside what everyone must do to make such a product: make masterbatches, mix, extrude, knit the product etc). The development process was very different: firstly we identified a capable producer (which VF never did for FENCE during the time IIC consulted on Fence (or PE net)), then we sought expert help from a company specializing in the design of plastics, getting a special combination of 3 different types of polyethylene. Then we looked to the process of extrusion, solving problems and ensuring the production of a net of sufficient strength for the purpose. The additives were selected from those recommended by Ciba and a number of others which, as far as I am aware (and I ought to know), VF had never used, which I had identified from the literature (including web sites). Then we had a testing program. We also tested additives from several producers to reduce costs without losing quality….
31. A colleague told me that Sumitomo (the major competitor of VF) had been able to produce their PE mosquito net in some factories in India and obtained good results, although they never started any production there. He would not identify the manufacturer. However, later on, THL went to India and tracked the manufacturer down. It was not a manufacturer that VF had ever used, which was another attraction in using him. The first point was now to see if he could make a net of our design, which would mean thinner yarns and therefore greater difficulty in manufacture without losing large quantities of the insecticide in the process. Having researched the available additives, I suggested some preliminary formulations for Intection to test the company. The additives I suggested were those suggested and promoted by Ciba and I also tested a number of others I found by researching the subject, for instance, by using Google and also on specialchem4polymers.com.
60. … It is simply a matter of trial and error to determine the minimum levels of DM which are effective in the final product, although, of course, this depends also on the degree of migration in the plastic. We tested more than 10 different dosages in many combinations to arrive at the low dose we can use."
"69. The additives were selected from those recommended by David de Corte of Ciba when I inquired in 2001 (when I was considering what additives I should use in Zerofly) (see the document exhibited already in OS1 and OS5 and e-mail from Ciba (pages 36-38 and 147 of 'OS6')). Others were selected based on literature and company information. David had suggested that the UV filter [Additive A] should not be used in yarns, because it leaves the yarn due to migration. This was all information freely given to me and clearly could not be considered any sort of trade secret of Ciba or, especially, VF. I chose to add it (despite possible negative experience from the Fence production) because the molecule is very close to a pyrethroid and thus is also a process aid.
71. As can be seen from the Ciba recommendation, the percentages which David suggested I should consider were [REDACTED]% [Additive D], [REDACTED]% [Additive B], [REDACTED]% [Additive A] and [REDACTED]% deltamethrin. He later changed his mind and recommended [Additive C] instead of [Additive D] (see mail from David de Corte (pages 36-38 of 'OS6')). I started there: I did not use any of the information from the results recorded in the Fence trials …"
"21. It is also remarkable that the Fence formulations which IPT claim to have been copied were … the two specific formulations which I came up with by looking again at the Ciba recommendations. Surely this illustrates the point that I was the same developer, starting again from the same point (the Ciba recommendations) and therefore likely to come up with much the same formulations to test. …
27. The Netprotect development started exactly the same way as the Fence development (except that the former did not start with FMC bifenthrin masterbatch) with the advice of CIBA on these additives, their concentrations and effect, a grid of formulations and trial and error testing by analysis of results. It is inevitable, therefore, that one can find similarities in the two 'grids'."
"Based on our Fence tests we can make some good guesses as to a formulation should be."
"This comes about because until recently, the total weight of masterbatch and basic granules used when testing and in production, was 28 kg. Instead of recalculating to make the total weight of the net and the additives 25 kg, we simply calculated the dosages to be added to a 25 kg sack of polyethylene HDPE. The [Figure 2] therefore comes from adding [REDACTED]g of deltamethrin [REDACTED]% masterbatch into 28kg of polyethylene (25kg plus weight of all masterbatches). If you look at the database, you can see we started with a net of 25 g/m2 and [Figure 2]g DM/kg net. Since 2007 masterbatches were made so the workers can weigh out even number of kilo masterbatches on top of the 25kg sack and get an even number of % DM, like [Figure 16] g/kg."
This explanation was repeated almost word for word in paragraph 137 of his sixth witness statement.
i) There is no record of the Defendants having used a total mass of 28 kg per batch. Instead the recipes indicate a total mass of 25 kg.
ii) If the intended polymer mass was 25 kg, that would imply that the intended deltamethrin concentration was [REDACTED] g/kg. This is itself an unexplained figure with no support in the documents, and inconsistent with the suggestion that the target was [Figure 16] g/kg.
iii) Adding masterbatches to a 25 kg sack of HDPE would not give a constant total mass of 28 kg. On the contrary, as the formulations changed, the total mass would change. Hence the concentration of deltamethrin would change. This is not what the Netprotect database shows, which is a constant figure of [Figure 2] g/kg deltamethrin with differing concentrations of additives and other materials such as LDPE.
iv) It is inconsistent with the documents relating to the July 2005 trials in Karur and the note about the weighing error of 1 kg in HDPE.
"10. … I believed that the real origin of the figure was the one I set out in [paragraph 137 of his sixth statement] (because the database referred to it being an error). However, whether it was one or the other or some other reason is not really the point, the point being that it was not a figure which the manufacturers could achieve: they could never be that accurate, weighing out the ingredients individually …. There was no point specifying [Figure 2], rather than [REDACTED] or [REDACTED] or even [Figure 16] therefore. This is particularly the case because the bioassays would not discriminate significantly between such products. One would never target [Figure 2] and, in the final formulation, one would aim for a rather rounded figure anyway. In trials you would normally try to take a convenient number – one which made the job of weighing out easier. Having once made a calculation and come up with a figure of [Figure 2], that figure just became a sort of 'pet number' for me. It may be remarkable, but it is of no significance at all.
145. … Whether if it was [Figure 16] or [Figure 2] g/kg of deltamethrin is of little importance and it can be seen, that, from March 2006, it is [Figure 16]. [Figure 2] was a 'pet number', but of no real significance. It just happened to be a number which I had once calculated (after the event) to have been used at one stage and I just used from then on: it was a quirk I had, rather than a number of any consequence."
"The database referred to is the one called 'extract DB Apr05.xls' which is the database as it was in April 2006. It is the tab 'kahrur 0705', column L, line 12-18."
"Likewise, the difference between [Figure 2] or [Figure 16] g/kg was of no concern. The IPT conclusion in paragraphs 388 and 390, that IIC was aiming at [Figure 2] g/kg does not seem to follow and is wrong in any event: it would be pointless to aim for such an exact concentration. IIC was actually aiming for having [REDACTED]% in the product at that time, adding a little more to allow for losses in production."
"The correct explanation is that [Figure 2] is something between 5 and 10% more than [Figure 16], that would be [REDACTED] and then I used [Figure 2]. That is a 'pet number' you have got. You can see [REDACTED], so it is not so difficult to remember."
"Q. The true answer is that you simply copied it from the Fence
A. I simply remember[ed] it from the Fence database."
"The others are the result of my correcting errors by the workers in formulating the samples: the figures are taken straight off my calculator. One example is the figure [Figure 3], which is again the result of the workers simply adding the additives to a 25 kg bag of the plastic substrate, instead of making up the total to 25kg, thereby reducing the amount of the additives from the intended [REDACTED]%. "
"[A] bad example chosen – reconsidering the Fence database, OS finds that there is no indication that the figure [Figure 3] was ever [Figure 3] (which would indicate a recalculation on a calculator), thus concluding that he is likely to have erred when thinking the figure arose from a mis-weighing of ingredients, rather than simply a choice made by him to use [REDACTED] in accordance with his mathematical protocol."
"Over the years (before I started to do any work for VF) I developed my own method of testing and experimenting. I used general mathematical criteria and developed a deterministic method, with the exercise of my own judgment. I knew from this, never to synchronise the steps which I used to vary the additives: there had to be asynchronism otherwise the results would just be synchronised as well. I therefore used what might appear to be slightly random figures but they were in fact chosen deliberately using my gut feel and judgment. I would also grade the parameters in importance. I used this same approach once I started to work for VF and it is still my method today."
"In connection with that project Ole Skovmand's company started from additive compositions suggested by Ciba and proceeded by trial and error. It tried out a large number of samples, varying the ingredients stepwise and observing the results. Thus it built up a sort of grid – referred to in this case as the database."
The Defendants contended that Dr Skovmand had followed the same course when devising the Netprotect recipes:
"It was the same man on both occasions and in each case he started with additives in proportions recommended by Ciba, and proceeded by trial and error."
"Q. … You have put forward a report which suggests that Dr. Skovmand
copied from the Fence database. What steps did you take to
investigate the contrary hypothesis before you accused your
scientific colleague of cheating?
A. I looked at the claims that the formulations had come from
published information, from information provided by Ciba
Geigy, from information provided by Innovene, and I could not
correlate that information to the formulations that occur in
the October production trials.
Q. So were you, therefore, as it were, investigating the
hypothesis that the explanations for this or that numerical
parameter where they came explicitly in that form from that
source? That is to say, if for example it says [Figure 3], that
specifically that number came from a specific source, such as
an additive that Ciba Geigy supplied?
A. Yes, I was looking for a source of (a) the typical values used
and (b) the specific values which were used in the
Q. To what extent do you consider that, first of all, this was
admittedly a case of the same man doing essentially the same
job a second time?
A. I do not believe it was the same job done the second time. It
was, in my opinion, it was a continuation of the same job
conducted by the same man."
"Q. By looking at hypothesis 2, why do you suppose the
investigator might choose a number like [Figure 3] to investigate in
the first place?
A. When your other two variables are [Figure 6] and [Figure 4], it would appear
logical to go for the [Figure 8].
Q. Yes, reinforcing my question, really, yet it is [Figure 3]?
Q. A strange number. Talking about when you did Fence, as a
scientist did you ask yourself why should that number of all
numbers that could have been was chosen?
A. I asked myself and I could find no evidence to support why.
The most likely conclusion I drew was that it was probably
some formulation error.
Q. Some formulation error. We will come to that in a moment.
Apart from cases where [Additive B] is set to [Figure 5], is this essentially
the pattern that is investigated? The variables are varied
step wise but because of introducing a number like [Figure 3], which
obviously has no logical relation to anything in particular,
it means that it is irregular step wise, do you follow?
Q. What now that you think about it, might the advantage of that
A. It would throw an irregularity into the data which would
presumably better test a response.
Q. Yes, and why would it be good to throw an irregularity into
the data, thus to better test?
A. To form better confidence on trends that were observed.
Q. Why would using [Figure 3] rather than, say, [Figure 8] or [Figure 17] give
A. I do not know.
Q. Yet throughout the Fence database again and again we see this
number [Figure 3], do we not?
Q. … Have you any scientific experience of a third, and I
suggest better, method, which is, provided I take proper steps
to vary one of the parameters in irregular steps -- irregular
steps like [Figure 3] -- then I can vary them all together, no more
than one anyway, thus getting the combined advantages of
getting a result which is sufficiently reliable, and saving
time and money. Correct?
Q. Is that right?
Q. OK. I do not want to be unfair to you but before now had you
heard of that method?
A. Yes, I have heard of similar experimental design procedures.
Q. What steps did you take when writing your reports to ask
yourself whether what was going on in the Fence database, the
reason the space, the N-dimensional space was being searched
in that way was because that method was being used?
A. I considered the data and the way that things were being
adjusted and I tried to see if the data would fit some sort of
quadratic high/low, high/low interaction.
Q. Is the short answer to my question you did sort of look into
it but you will now fairly admit you did not think far enough?
A. If that's the way the system was being varied."
"Q. …. I am just interested for the moment in the
numbers, [Figure 3], [Figure 6], [Figure 3] and so on. Was the choice of those
numbers second time around what led you to suspect cheating?
I want an honest answer to this, please.
A. The combination of [Figure 2] for deltamethrin content, which is
only doubled, there are only two values whichever database you
look at. ..
[Figure 2], [Figure 3] were strong, I took as strong indicators that
similar technology had been moved forwards."
"Q. In the light of these matters, the feeling of the search
pattern and what you have said about that, [Figure 3], [Figure 6], [Figure 3] and
so on, the same man aiming at the same goal twice over, using
additives which we have just agreed he must have investigated
before, is there any scientific reason to suppose there is
anything remarkable about the same numbers turning up in the
A. No, I do not think so.
Q. If I have been unfair to you, that was wrong of me because
I think I am now revising my opinion. As a fair minded
scientist, with the light of what I have been putting to you
in cross-examination, you would have expressed your report
somewhat differently or with certain qualifications, to say
the least, would you not?
A. I think the same methods could have been applied by the same
person and assuming the same starting point, then it is
reasonable to assume the same numbers could be used.
Q. Without any impropriety that one would think as a scientist
was going on?
A. Yes, as long as that data is freely available to be used."
"Q. I am going to ask you this as a perfectly formal question. I
am going to, I submit, test your fairness as a scientist. Now
that we have been through this is there anything in the
databases that as a scientist makes you infer copying at all?
A. Based on those three additives being used, and your line of
questioning, I think I need to concede that they could be
achieved by the same person using the same approaches.
Q. Yes, that is not quite the point I put to you. It is not that
it could be achieved. Is there any scientific reason for
saying that there has been copying at all, based on scientific
reasons and what is in the databases?
A. I think there is a hypothesis that says that there was not.
Q. We know there is a hypothesis, there is always in science two
hypotheses at least, the question is, is there any, I put it
this way, is there any scientific support for hypothesis one;
namely, that there was copying? I think you are a man of
integrity. You know what the answer is, do you not?
A. I think there is a strong -- I am struggling to respond to the
direct nature of the question. I think there is a scientific
approach which could lead to hypothesis two being correct,
Q. Legally I do not have to do this but I believe, contrary to my
first impression, you are actually a very honest man. I am
going to ask you a last time. Is there any scientific
evidence that supports hypothesis one; namely, copying? For
your benefit I give you that opportunity to answer that.
A. I think the support for hypothesis one is in the use of
factors like [Figure 2] for a deltamethrin content, where that does
not form part of a series that is being randomly varied or
systematically varied. That is a value that has been
Q. Same chap second time around. Is there any scientific basis
for saying he would never be able to remember [Figure 2]?
A. I do not see why he would specify [Figure 2] and not [Figure 16]. For [Figure
16] if you are making up a 25kg batch, you add [REDACTED].
Q. Final, final, final, time. It is your reputation as a
scientist now. Do you still accuse your scientific colleague,
Dr. Skovmand, of fraud, cheating, lying, simply based on the
scientific evidence available to you from these databases?
A. I still believe that the work that was done in Fence was used,
if you like, to springboard the Net Protect development.
Q. Is that based on scientific reasons, because if you say yes I
am going to ask you what they are. You do not get off with the
question, if I can put it that way.
A. I think, no, I cannot put a scientific basis behind that."
"A. So the logic behind this that you see on this page is that if you
want to have a series of dilutions which is [Figure 6], [Figure 8] and [Figure 4],
then your statistical analysis will go wrong. You cannot have
the same steps in your recipes because if you do that, you get
I think it is called co-correlation; you get high VIP data,
that means your analysis will come out and say that some of
your independent variables are not independent. Therefore,
I put in irregular number to avoid that problem.
…. So instead of putting in [Figure 8] here, I put
in [Figure 15].
Q. Why did you do that?
A. Because if you put in [Figure 8] you risk that you get, I said before
high VIP values, it means that two of your parameters are not
independent. The whole point of making these screens of
testing is that you can -- that I can make linear regression
analysis after that. And to do that the demand is that the
parameters are totally independent. If they are not totally
independent, then your analysis will go wrong. So what you
have to do is you have two possibilities, you can be very,
very careful in your planning or you can put in some odd
numbers. If you put in some odd numbers, that will work.
Q. What is VIP?
A. VIP is a statistical parameter which indicates that two
parameters are not independent."
"The benefits of plastics additives are not marginal – they make the difference between success and failure in plastics technology."
Furthermore, it is clear from the evidence in this case that the choice and concentration of the additives makes a difference to the performance of the product, in particular so far as migration of deltamethrin is concerned.
"First, the information itself ... must 'have the necessary quality of confidence about it'. Secondly, that information must have been communicated in circumstances importing an obligation of confidence. Thirdly, there must have been an unauthorised use of the information to the detriment of the party communicating it."
The necessary quality of confidence
Circumstances importing an obligation of confidence
"The general principles governing the respective rights of the contractor and client in the copyright in a work commissioned by the client appear to me to be as follows:
(1) the contractor is entitled to retain the copyright in default of some express or implied term to the contrary effect;
(2) the contract itself may expressly provide as to who shall be entitled to the copyright in work produced pursuant to the contract. Thus under a standard form Royal Institute of British Architects ('RIBA') contract between an architect and his client, there is an express provision that the copyright shall remain vested in the architect;
(3) the mere fact that the contractor has been commissioned is insufficient to entitle the client to the copyright. Where Parliament intended the act of commissioning alone to vest copyright in the Client e.g. in case of unregistered design rights and registered designs, the legislation expressly so provides (see section 215 of the 1988 Act and section 1(a) of the Registered Designs Act 1949 as amended by the 1988 Act). In all other cases the client has to establish the entitlement under some express or implied term of the contract;
(4) the law governing the implication of terms in a contract has been firmly established (if not earlier) by the decision of the House of Lords in Liverpool City Council v Irwin  AC 239 'Liverpool'). In the words of Lord Bingham MR in Philips Electronique v BSB  EMLR 472 ('Philips') at 481, the essence of much learning on implied terms is distilled in the speech of Lord Simon of Glaisdale on behalf of the majority of the Judicial Committee of the Privy Council in BP Refinery (Westernport) Pty Ltd v The President, Councillors and Ratepayers of the Shire of Hastings (1978) 52 ALJR 20 at 26:
'Their Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that "it goes without saying"; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.'
Lord Bingham added an explanation and warning:
'The courts' usual role in contractual interpretation is, by resolving ambiguities or reconciling apparent inconsistencies, to attribute the true meaning to the language in which the parties themselves have expressed their contract. The implication of contract terms involves a different and altogether more ambitious undertaking: the interpolation of terms to deal with matters for which, ex hypothesi, the parties themselves have made no provision. It is because the implication of terms is so potentially intrusive that the law imposes strict constrains on the exercise of this extraordinary power.
The question of whether a term should be implied, and if so what, almost inevitably arises after a crisis has been reached in the performance of the contract. So the court comes to the task of implication with the benefit of hindsight, and it is tempting for the court then to fashion a term which will reflect the merits of the situation as they then appear. Tempting, but wrong.'
(5) where (as in the present case) it is necessary to imply the grant of some right to fill a lacuna in the contract and the question arises how this lacuna is to be filled, guidance is again to be found in Liverpool. The principle is clearly stated that in deciding which of various alternatives should constitute the contents of the term to be implied, the choice must be that which does not exceed what is necessary in the circumstances (see Lord Wilberforce at p.245 F-G). In short a minimalist approach is called for. An implication may only be made if this is necessary, and then only of what is necessary and no more;
(6) accordingly if it is necessary to imply some grant of rights in respect of a copyright work, and the need could be satisfied by the grant of a licence or an assignment of the copyright, the implication will be of the grant of a licence only;
(7) circumstances may exist when the necessity for an assignment of copyright may be established. As Mr Howe has submitted, these circumstances are, however, only likely to arise if the client needs in addition to the right to use the copyright works the right to exclude the contractor from using the work and the ability to enforce the copyright against third parties. Examples of when this situation may arise include: (a) where the purpose in commissioning the work is for the client to multiply and sell copies on the market for which the work was created free from the sale of copies in competition with the client by the contractor or third parties; (b) where the contractor creates a work which is derivative from a pre-existing work of the client, e.g. when a draughtsman is engaged to turn designs of an article in sketch form by the client into formal manufacturing drawings, and the draughtsman could not use the drawings himself without infringing the underlying rights of the client; (c) where the contractor is engaged as part of a team with employees of the client to produce a composite or joint work and he is unable, or cannot have been intended to be able, to exploit for his own benefit the joint work or indeed any distinct contribution of his own created in the course of his engagement: see Nichols Advanced Vehicle Systems Inc v Rees  RPC 127 at 139 and consider Sofia Bogrich v Shape Machines unreported, 4th November 1994 and in particular page 15 of the transcript of the judgment of Aldous J. In each case it is necessary to consider the price paid, the impact on the contractor of assignment of copyright and whether it can sensibly have been intended that the contractor should retain any copyright as a separate item of property;
(8) if necessity requires only the grant of a licence, the ambit of the licence must be the minimum which is required to secure to the client the entitlement which the parties to the contract must have intended to confer upon him. The amount of the purchase price which the client under the contract has obliged himself to pay may be relevant to the ambit of the licence. Thus in Stovin-Bradford v Volpoint Properties Ltd  1 Ch 1007, where the client agreed to pay only a nominal fee to his architect for the preparation of plans, he was held to have a licence to use the plans for no purpose beyond the anticipated application for planning permission. By contrast in Blair v Osborne & Tompkins  21 QB 78, where the client was charged the full RIBA scale fee, his licence was held to extend to using the plans for the building itself. Guidance as to the approach to be adopted is provided in a passage in the judgment of Jacobs J in Beck v. Montana Construction Pty [1964-5] NSWR 229 at 235 cited with approval by Widgery LJ in Blair v Osborne & Tompkins supra at p.87:
'it seems to me that the principle involved is this; that the engagement for reward of a person to produce material of a nature which is capable of being the subject of copyright implies a permission, or consent, or licence in the person giving the engagement to use the material in the manner and for the purpose in which and for which it was contemplated between the parties that it would be used at the time of the engagement.'
(9) the licence accordingly is to be limited to what is in the joint contemplation of the parties at the date of the contract, and does not extend to enable the client to take advantage of a new unexpected profitable opportunity (consider Meikle v. Maufe  3 All ER 144)."
The scope of the obligation of confidence: the Ciba recommendations
"Q. Did you think when you went to see Ciba on the various
occasions that you did, in 2002, did you think that having
obtained their recommendations, you could then just go off and
use those recommendations for the purposes of some other
A. I do not think I gave that a thought.
Q. But it would be pretty improper, would it not?
A. I think it would be a bit unethical, yes."
The scope of the obligation of confidence: trade secrets
"(1) Where the parties are, or have been, linked by a contract of employment, the obligations of the employee are to be determined by the contract between him and his employer: cf. Vokes Ltd v Heather (1945) 62 RPC 135, 141.
(2) In the absence of any express term, the obligations of the employee in respect of the use and disclosure of information are the subject of implied terms.
(3) While the employee remains in the employment of the employer the obligations are included in the implied term which imposes a duty of good faith or fidelity on the employee. For the purposes of the present appeal it is not necessary to consider the precise limits of this implied term, but it may be noted: (a) that the extent of the duty of good faith will vary according to the nature of the contract (see Vokes Ltd v Heather, 62 R.P.C. 135); (b) that the duty of good faith will be broken if an employee makes or copies a list of the customers of the employer for use after his employment ends or deliberately memorises such a list, even though, except in special circumstances, there is no general restriction on an ex-employee canvassing or doing business with customers of his former employer: see Robb v Green  2 QB 315 and Wessex Dairies Ltd v Smith  2 KB 80.
(4) The implied term which imposes an obligation on the employee as to his conduct after the determination of the employment is more restricted in its scope than that which imposes a general duty of good faith. It is clear that the obligation not to use or disclose information may cover secret processes of manufacture such as chemical formulae (Amber Size and Chemical Co. Ltd v Menzel  2 Ch 239), or designs or special methods of construction (Reid & Sigrist Ltd v Moss and Mechanism Ltd (1932) 49 RPC 461), and other information which is of a sufficiently high degree of confidentiality as to amount to a trade secret. The obligation does not extend, however, to cover all information which is given to or acquired by the employee while in his employment, and in particular may not cover information which is only 'confidential' in the sense that an unauthorised disclosure of such information to a third party while the employment subsisted would be a clear breach of the duty of good faith. This distinction is clearly set out in the judgment of Cross J in Printers & Finishers Ltd v Holloway  1 WLR 1,  RPC 239 where he had to consider whether an ex-employee should be restrained by injunction from making use of his recollection of the contents of certain written printing instructions which had been made available to him when he was working in his former employers' flock printing factory. In his judgment, delivered on 29 April 1964 (not reported on this point in  1 WLR 1), he said  RPC 239, 253:
'In this connection one must bear in mind that not all information which is given to a servant in confidence and which it would be a breach of his duty for him to disclose to another person during his employment is a trade secret which he can be prevented from using for his own advantage after the employment is over, even though he has entered into no express covenant with regard to the matter in hand. For example, the printing instructions were handed to Holloway to be used by him during his employment exclusively for the plaintiffs' benefit. It would have been a breach of duty on his part to divulge any of the contents to a stranger while he was employed, but many of these instructions are not really "trade secrets" at all. Holloway was not, indeed, entitled to take a copy of the instructions away with him; but in so far as the instructions cannot be called "trade secrets" and he carried them in his head, he is entitled to use them for his own benefit or the benefit of any future employer.'
The same distinction is to be found in E. Worsley & Co. Ltd v Cooper  1 All ER 290 where it was held that the defendant was entitled, after he had ceased to be employed, to make use of his knowledge of the source of the paper supplied to his previous employer. In our view it is quite plain that this knowledge was nevertheless 'confidential' in the sense that it would have been a breach of the duty of good faith for the employee, while the employment subsisted, to have used it for his own purposes or to have disclosed it to a competitor of his employer.
(5) In order to determine whether any particular item of information falls within the implied term so as to prevent its use or disclosure by an employee after his employment has ceased, it is necessary to consider all the circumstances of the case. We are satisfied that the following matters are among those to which attention must be paid:
(a) The nature of the employment. Thus employment in a capacity where 'confidential' material is habitually handled may impose a high obligation of confidentiality because the employee can be expected to realise its sensitive nature to a greater extent than if he were employed in a capacity where such material reaches him only occasionally or incidentally.(b) The nature of the information itself. In our judgment the information will only be protected if it can properly be classed as a trade secret or as material which, while not properly to be described as a trade secret, is in all the circumstances of such a highly confidential nature as to require the same protection as a trade secret eo nomine. The restrictive covenant cases demonstrate that a covenant will not be upheld on the basis of the status of the information which might be disclosed by the former employee if he is not restrained, unless it can be regarded as a trade secret or the equivalent of a trade secret: see, for example, Herbert Morris Ltd v Saxelby  1 AC 688, 710 per Lord Parker of Waddington and Littlewoods Organisation Ltd v Harris  1 WLR 1472, 1484 per Megaw L.J.We must therefore express our respectful disagreement with the passage in Goulding J's judgment at  ICR 589, 599E, where he suggested that an employer can protect the use of information in his second category, even though it does not include either a trade secret or its equivalent, by means of a restrictive covenant. As Lord Parker of Waddington made clear in Herbert Morris Ltd v Saxelby  1 AC 688, 709, in a passage to which Mr. Dehn drew our attention, a restrictive covenant will not be enforced unless the protection sought is reasonably necessary to protect a trade secret or to prevent some personal influence over customers being abused in order to entice them away.In our view the circumstances in which a restrictive covenant would be appropriate and could be successfully invoked emerge very clearly from the words used by Cross J in Printers & Finishers Ltd v Holloway  1 WLR 1, 6 (in a passage quoted later in his judgment by Goulding J  ICR 589, 601):'If the managing director is right in thinking that there are features in the plaintiffs' process which can fairly be regarded as trade secrets and which their employees will inevitably carry away with them in their heads, then the proper way for the plaintiffs to protect themselves would be by exacting covenants from their employees restricting their field of activity after they have left their employment, not by asking the court to extend the general equitable doctrine to prevent breaking confidence beyond all reasonable bounds.'It is clearly impossible to provide a list of matters which will qualify as trade secrets or their equivalent. Secret processes of manufacture provide obvious examples, but innumerable other pieces of information are capable of being trade secrets, though the secrecy of some information may be only short-lived. In addition, the fact that the circulation of certain information is restricted to a limited number of individuals may throw light on the status of the information and its degree of confidentiality.(c) Whether the employer impressed on the employee the confidentiality of the information. Thus, though an employer cannot prevent the use or disclosure merely by telling the employee that certain information is confidential, the attitude of the employer towards the information provides evidence which may assist in determining whether or not the information can properly be regarded as a trade secret. It is to be observed that in E. Worsley & Co. Ltd v Cooper  1 All ER 290, 307D, Morton J attached significance to the fact that no warning had been given to the defendant that 'the source from which the paper came was to be treated as confidential.'(d) Whether the relevant information can be easily isolated from other information which the employee is free to use or disclose. In Printers & Finishers Ltd v Holloway  RPC 239, Cross J considered the protection which might be afforded to information which had been memorised by an ex-employee. He put on one side the memorising of a formula or a list of customers or what had been said (obviously in confidence) at a particular meeting, and continued, at p. 256:'The employee might well not realise that the feature or expedient in question was in fact peculiar to his late employer's process and factory; but even if he did, such knowledge is not readily separable from his general knowledge of the flock printing process and his acquired skill in manipulating a flock printing plant, and I do not think that any man of average intelligence and honesty would think that there was anything improper in his putting his memory of particular features of his late employer's plant at the disposal of his new employer.'For our part we would not regard the separability of the information in question as being conclusive, but the fact that the alleged 'confidential' information is part of a package and that the remainder of the package is not confidential is likely to throw light on whether the information in question is really a trade secret."
"If one turns from the authorities and looks at the matter as a question of principle, I think (and I say this very tentatively, because the principle has not been argued out) that four elements may be discerned which may be of some assistance in identifying confidential information or trade secrets which the court will protect. I speak of such information or secrets only in an industrial or trade setting. First, I think that the information must be information the release of which the owner believes would be injurious to him or of advantage to his rivals or others. Second, I think the owner must believe that the information is confidential or secret, i.e., that it is not already in the public domain. It may be that some or all of his rivals already have the information: but as long as the owner believes it to be confidential I think he is entitled to try and protect it. Third, I think that the owner's belief under the two previous heads must be reasonable. Fourth, I think that the information must be judged in the light of the usage and practices of the particular industry or trade concerned. It may be that information which does not satisfy all these requirements may be entitled to protection as confidential information or trade secrets: but I think that any information which does satisfy them must be of a type which is entitled to protection."
"In Faccenda Chicken (at page 137) the Court of Appeal drew attention to some of the matters which must be considered in determining whether any particular item of information falls within the implied term of a contract of employment so as to prevent its use or disclosure by an employee after his employment has ceased. Those matters included: the nature of the employment: the nature of the information itself: the steps (if any) taken by the employer to impress on the employee the confidentiality of the information: and the case or difficulty of isolating the information in question from other information which the employee is free to use or disclose. We have no doubt that these are all very relevant matters to consider. In the ordinary way, the nearer an employee is to the inner counsels of an employer, the more likely he is to gain access to truly confidential information. The nature of the information itself is also important: to be capable of protection, information must be defined with some degree of precision: and an employer will have great difficulty in obtaining protection for his business methods and practices. If an employer impresses the confidentiality of certain information on his employee, that is an indication of the employer's belief that the information is confidential, a fact which is not irrelevant: Thomas Marshall Ltd v Guinle  Ch 227 at 248. But much will depend on the circumstances. These may be such as to show that information is or is being treated as, confidential; and it would be unrealistic to expect a small and informal organisation to adopt the same business disciplines as a larger and more bureaucratic concern. It is plain that if an employer is to succeed in protecting information as confidential, he must succeed in showing that it does not form part of an employee's own stock of knowledge, skill and experience. The distinction between information in Goulding J's class 2 and information in his class 3 may often on the facts be very hard to draw, but ultimately the court must judge whether an ex-employee has illegitimately used the confidential information which forms part of the stock-in-trade of his former employer either for his own benefit or to the detriment of the former employer, or whether he has simply used his own professional expertise, gained in whole or in part during his former employment."
"… the information in question can fairly be regarded as a separate part of the employee's stock of knowledge which a man of ordinary honesty and intelligence would recognise to be the property of his employer, and not his own to do as likes with … "
Appendix 1: The Extract DB documents
"1. I have found the database extracts that were sent, but they are all pass word protected and I have not the pass word anymore, they were sent april 2007. I do not know how useful they are, but they have been revealed in the court in DK, so I think VF can get them from there. I understand that I am asked to produce a full version of the database per July 05
It does no longer exist. … The closest I can get in the non deleted old versions is PE database extract from October 2005. It is however password protected and I have not written down the password. … So, I do not know how relevant it is, but you can have it."
This clearly indicates that the Extract DB documents were made by Dr Skovmand and sent by him (whether to Mr Larsen or to GMR) in April 2007.
"We have received the following response from Mr Skovmand to the point[s] raised in your letter. Following your numbering:
1. Extract DB October 04 is the first version of the database and only includes data from the test made in that month. Extract April 05 and 06 are the same and both contain data from products made up to January 2006, so the title 05 is an error. Extract July 05 is as it says an extract that includes data up until that time."
While this is unclear in certain respects, what is again clearly indicated is that the person who was responsible for making the Extract DB documents was Dr Skovmand.
"What IPT have are extracts of which one has been worked on by Torben, maybe both. They were picked from his computer during the search in his house. As explained before (witness statement 6), April 2005 is not from 2005 since it holds data from March 2006, so it most likely was from April 2006 and namely wrongly. The IPT conclusion that data were removed from the June [sic] 2005 version is therefore wrong."
This is very confused, not least because Dr Skovmand seems here to be proceeding on the basis that the Extract DB documents were obtained by VF from one of the searches of Mr Larsen's house, whereas in fact they were produced by the Defendants. Nevertheless, Dr Skovmand suggests that the extracts have been "worked on" by Mr Larsen.
"In fact, I did not say I have found the database extracts that were sent, I do not have any databases with these names (I have run a search). What I said was I found one database – it could be something totally irrelevant – that I could not open since it was password protected."
The first sentence directly contradicts the first sentence from the 12 September 2008 letter quoted above. The second sentence, as is clear from what follows, refers to the version of the Netprotect database which he said in the same letter he also found at that time (and was disclosed by the Defendants on 21 November 2008 after GMR's IT manager was able to access it).
"138. #444. IPT has not taken into account that the extract was in fact from a later date, almost certainly April 2006. Extracts from a database means exactly that, they are not the database. Data can be omitted or simplified, depending on the purpose. For example, when there were no additive information on the first formulations in a database extract sent to Torben,
the reason was that I wanted to communicate the problem concerning the high variation in deltamethrin. He probably himself added data to that: the file called 'Extr July 2005', which I do not recognise. … Further, there is something wrong with the bioassay values presented in the table named 'July database' [taken by Mr Howe from Extract DB July05.xls]: they do not at all corresponde to those in the database…
139. #445. As set out under #444, there
isappears to be a typing error in the naming of Extract apr05.xls, which is apparent from its content. It covers up to the start of 2006 and is likely, therefore to be April 2006…."
"I did not name these databases and that is why I said in my seventh witness statement that I did not recognise the names. Torben Holm Larsen has told me (and I therefore believe) the following. He named them. The database entitled 'Extract db Apri05.xls' is so named because the data under the tab 'bioassay' relates to the 3 formulations sent to Indonesia for a field trial in April 2005… Other tabs include data added after April 2005, because the database was current at the date I sent the extract to him in about April 2006. … Torben will verify this by signing below."
i) He had provided extracts from the Netprotect database to Mr Larsen until November 2005.
ii) When Mr Larsen's apartment was raided for the second time in November 2005, his files were removed and so the Defendants did not have any extracts. Dr Skovmand decided not to send him any more complete databases, but for a short time did send extracts for temporary use only.
iii) When the Defendants prepared Confidential Schedule 2 to the Defence, they did not have any databases to support it and so Mr Larsen asked for extracts for this purpose. Dr Skovmand found a database which was originally stored in February 2006 but updated to about mid March 2006. All three extracts were made from that database. Dr Skovmand did not recall how the three extracts were provided to Mr Larsen, but Mr Larsen had got them from him. Mr Larsen named them.
iv) When it had been pointed out by Ms San Martin that Extract DB oct04.xls and Extract DB July05.xls contained references to information later than the dates on which Dr Skovmand had assumed that they had been made, he had opened all three files. He was then able to see that they had all been extracted from the same file. He had then realised that Mr Larsen would have them from him at the same time, namely when Mr Larsen was producing the timeline in about April 2007.
"The three extracts are from the database
s (or copies of the databases)which were made by me and provided to Bestnet in or about October 2004, July 2005 andApril 2006 respectively."
The remainder of the statement was unchanged.
However, the Defendants did not have any databases.It is my recollection(but not Torben's he tells me) that Torben thereforeasked if he could have extracts for this purpose [namely supporting Confidential Schedule 2]. I remember now that I was able to find a database but I do not know now when it was created. Certainly at some time, I had been able to provide Torben with a database (or part of a database) which was originally stored in February 2006… "
"I certainly permitted Torben to
haveuse the three extract in about April 2007, but that was certainly not the first time Torben had the information they contained… As for the 2006 database or partial database from which the 3 extracts have been taken, I believe that I would have provided Torben with it about April … 2006. Whether I did provide another copy later (when he was doing the time line) I cannot say. Since it seems he already had a copy, it would seem unlikely."
"2. They were files in my possession, which had not been altered for the sake of these proceedings, except for the fact that they have been given new names to reflect the relevant parts f the Netprotect development history document.
4. Ole did not send me them in connection with these proceedings. I do not remember asking him to send me any extracts for illustrating the timeline in the Defence. In fact, I think it is unlikely that I asked him to send me any extracts for that purpose, because I already had these extracts."
He went to say that Extract DB oct04.xls was a "strange document" which had features he could not explain.
"There is only one real difference between the
recollections of Mr. Holm Larsen and Mr. Skovmand, and that is
that Mr. Skovmand says he remembers being asked to produce a
database to support the details in the timeline of the
protection of Net Protect. He does not remember when he
actually sent the database. It is common ground between the
two of them that the database is one which would have been
saved in March or April 2006 and that all three extracts came
from that database. That is common ground. It is common
ground that Mr. Larsen would have been sent that in 2006,
about April. The only difference is that Ole Skovmand does
not remember whether he sent the database again in 2007 or not
and Mr. Holm Larsen says he did not."
The discrepancies in the Extract DB documents
Appendix 2: Dr Skovmand's evidence to the Danish court
"I then, in November 2005, made the final recipe for Net Protect in polyethylene nets. It uses components that are also found in Fence and Zero fly, but in different concentrations, and also several other chemicals; on the other hand, other of the chemicals in the two VF products are left out, among them the insecticide chosen by VF….
Net protect is made using an insecticide never used in any of VF's products. The insecticide in question has never been tested in VF's polyethylene products."
"145. … at that time, I was intent on using alfacypermethrin. Samples had been made of each of these two insecticides and, whilst my earlier inclination had been to go with deltamethrin, principally for technical reasons, the fact that alfacypermethrin had done well in recent trials, together with the fact that it was 5 times cheaper than deltamethrin, changed my mind. I did not intend to suggest that we had not made samples with deltamethrin or that deltamethrin had never been the favoured insecticide.
146. Since that time the decision on which insecticide to use has been reviewed prior to sending samples for approval and Bestnet (the client) preferred to go with deltamethrin after all, in spite of the fact that it is so much more expensive, based on the larger number of tests made with deltamethrin than with alfacypermethrin."