Force India Formula 1 Team Ltd v 1 Malaysia Racing Team SDN BHD and Others
| Jurisdiction | England & Wales |
| Court | Chancery Division |
| Judge | MR JUSTICE ARNOLD |
| Judgment Date | 21 March 2012 |
| Neutral Citation | [2012] EWHC 616 (Ch) |
| Docket Number | Case Nos: HC10C00474, HC11C00774 |
| Date | 21 March 2012 |
[2012] EWHC 616 (Ch)
The Hon Mr Justice Arnold
Case Nos: HC10C00474, HC11C00774
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
Rolls Building, Fetter Lane, London, EC4A 1NL
James Mellor QC and Lindsay Lane (instructed by Fladgate LLP) for the Claimants
Iain Purvis QC and Tom Alkin (instructed by Withers LLP) for the Corporate Defendants
Benet Brandreth (instructed by William Sturges LLP) for Mr Gascoyne
Hearing dates: 18–20, 23–27, 30–31 January, 1–2, 13–14 February 2012
Further written submissions 17, 28 February 2012
| Contents | |
| Topic | Paragraphs |
| Introduction | 1–2 |
| The parties | 3–8 |
| Force India | 3 |
| Lotus | 4–5 |
| Mr Gascoyne | 6 |
| FondTech and Aerolab | 7–8 |
| The witnesses | 9–34 |
| Factual witnesses | 9–17 |
| Force India's witnesses | 9–10 |
| Lotus' witnesses | 11 |
| Mr Gascoyne's witnesses | 12 |
| Aerolab and FondTech's witnesses | 13–17 |
| Expert witnesses | 18–34 |
| Force India's experts | 18–27 |
| The Defendants' experts | 28–34 |
| My approach to finding the facts | 35 |
| The outline facts | 36–200 |
| F1 | 36–39 |
| Aerodynamic development in F1 | 40–48 |
| Designing a windtunnel model | 49–53 |
| The relationship between Force India and Aerolab prior to April 2008 | 54–59 |
| The Force India-Aerolab Development Contract | 60–62 |
| Aerolab's work for Force India in 2008–2009 | 63–69 |
| The ending of the relationship between Force India and Aerolab | 70–88 |
| Aerolab's access to Force India data after 31 July 2009 | 89–97 |
| Force India's performance in 2009 | 98 |
| Litespeed's F1 application for 2010 | 99–105 |
| Lotus' F1 application | 106–114 |
| The FOTA August 2009 shutdown | 115 |
| The design of the initial Lotus model | 116–165 |
| The Lotus press release and its aftermath | 166–190 |
| Aerodynamic development of the Lotus model | 191–195 |
| Parts which were not changed | 196 |
| Transfer of data to Lotus | 197–198 |
| Aerodynamic development by Lotus | 199 |
| The 2010 F1 Championship | 200 |
| Applicable law | 201–202 |
| Contractual issues | 203–214 |
| Date of termination | 204–208 |
| Breach of clause 6(a) | 209 |
| Does clause 5(b) continue after termination? | 210–213 |
| The enforceable scope of clause 5(b) after termination | 214 |
| Breach of confidence: the law | 215–252 |
| The necessary quality of confidence | 217–223 |
| Relative confidentiality | 218–222 |
| Trivial information | 223 |
| Circumstances importing an obligation of confidence | 224 |
| The scope of the obligation of confidence: trade secrets | 225–236 |
| What is a trade secret? | 237 |
| Who is liable for breach of confidence and in what circumstances? | 239–252 |
| The designs in issue | 253–254 |
| Force India's claim to confidential information | 255–271 |
| The pleaded case | 256–258 |
| What was in the public domain? | 259–264 |
| Photographs | 260 |
| FMCG | 261–264 |
| Is any of the information trivial? | 265 |
| Precise dimensions | 266–268 |
| Modularity | 269 |
| Spatial relationship | 270 |
| Annex 1 Part B | 271 |
| Aerodynamic parts the full-sized equivalents of which were installed on the Force India car | 272–313 |
| Front wing | 272–287 |
| Front wing endplate and turning vane | 272–275 |
| Front wing transition element | 276–278 |
| Front wing mainplane and primary and secondary flaps | 279–282 |
| Front wing strakes | 283–284 |
| Y400 endplate and mounting pad | 285 |
| Front wing mainplane pillar pocket infill | 286 |
| Front wing assembly | 287 |
| Front and rear barrels, front and rear brake ducts, disc bell | 288–289 |
| Driver's helmet | 290 |
| Rear wing | 291–295 |
| Central section | 293 |
| Rear wing assembly | 294–295 |
| Diffuser | 296–313 |
| Diffuser strake | 303 |
| Profiled foot | 304–305 |
| Outboard area | 306–308 |
| Lateral roof profile | 309–311 |
| Secondary inlet | 312–313 |
| Aerodynamic parts which were not installed in the Force India car | 314–320 |
| Mid-section | 314–319 |
| Sidepod inboard and outboard lower leading edge | 314 |
| Forward bargeboard | 315 |
| Rearward chin | 316 |
| Chin | 317 |
| Vortex generator | 318 |
| Assembly | 319 |
| Rearview mirror | 320 |
| Mechanical parts | 321–337 |
| Model spine | 321–330 |
| Front spine | 321–323 |
| Centre spine | 324–327 |
| Rear spine | 328–329 |
| Spine assembly | 330 |
| Wheel rim sealing details | 331 |
| Suspension components | 332–335 |
| Driveshaft | 332–333 |
| Limit cams and shaft clamps | 334 |
| Lower wishbone flexure | 335 |
| Model jigs | 336–337 |
| Diffuser fix plate jig | 336 |
| Model mounting jig and spacer | 337 |
| Liability of Aerolab and FondTech for breach of confidence | 338–342 |
| Liability of Mr Gascoyne for breach of confidence | 343–367 |
| Liability of Lotus for breach of confidence | 368 |
| The copyright claim | 369–373 |
| Quantum: the law | 374–427 |
| Invasions of proprietary rights | 375–376 |
| Intellectual property claims | 377–380 |
| Breach of a contractual obligation of confidentiality | 381–387 |
| Breach of an equitable obligation of confidence | 388–394 |
| The authorities | 395–423 |
| General conclusions | 424 |
| Specific issues | 425–427 |
| Quantum: the present case | 428–462 |
| Summary of the parties' positions | 428–431 |
| The date of the hypothetical negotiation | 432–433 |
| The parties to the negotiation | 434–435 |
| The subject matter of the negotiation | 436 |
| The value of the confidential information | 437–449 |
| Aerodynamic system | 438–439 |
| Track validation | 440–441 |
| Stable baseline | 442–443 |
| The poor aerodynamic performance of the Force India car | 444–445 |
| The nature and extent of the misuse | 446–447 |
| The aerodynamic performance of the intial Lotus model | 448 |
| The FMCG story | 449 |
| The position of Force India as licensor | 450–454 |
| The position of Aerolab and FondTech as licensee | 455–458 |
| Other relevant factors | 459–461 |
| Conclusion | 462 |
| Summary of conclusions | 463–464 |
Introduction
The principal claim in these proceedings is a claim by the Claimant ("Force India") against the Defendants for misuse of confidential information relating to the design of a half-size wind tunnel model of a Formula 1 ("F1") racing car. In addition, there is a claim for infringement of copyright. (Pleaded claims for infringement of Community design right and UK design right were not pursued at trial.) Very unusually, as result of an order made by Master Bowles on 4 May 2011, issues of liability and quantum were tried together. The Fourth Defendant ("Aerolab") has a cross-claim against Force India in respect of an unpaid debt.
It should be made clear at the outset that the Defendants do not dispute that some of Aerolab's employees engaged in some copying of computer files containing Force India designs. The areas of dispute are four-fold. First, how much copying took place? Secondly, to what extent is the copying actionable? Thirdly, which of the Defendants are liable? Fourthly, what sum should be awarded to Force India by way of recompense?
The parties
Force India
Force India operates a Formula 1 racing team. The Force India F1 racing team started life as "Jordan Grand Prix" in 1991. It became "Midland F1 Racing" in 2006, "Spyker F1" in 2007 and "Force India" in 2008. Force India operates its own wind tunnel facility at Brackley near Silverstone.
Lotus
The First and Second Defendants are respectively a Malaysian company ("1 Malaysia") and its English subsidiary ("1 Malaysia UK") which operate a Formula 1 racing team. At the relevant time the team was known as either "Lotus Racing" or "Team Lotus", or "Lotus" for short. I shall therefore follow the parties' example in continuing to refer to it by that name, although it is now known as "Caterham F1" following a settlement of the proceedings which had led to the judgment of Peter Smith J in Group Lotus plc v 1 Malaysia Racing Team Sdn Bhd [2011] EWHC 1366 (Ch), [2011] ETMR 62.
1 Malaysia was incorporated on 16 October 2009 and 1 Malaysia UK was incorporated on 14 October 2009. Although there was no corporate vehicle prior to then, Lotus effectively came into being in early July 2009. On 14 September 2009 it gained entry into F1. Lotus' Team Principal, and its principal financial backer apart from sponsors, is Tony Fernandes.
Mr Gascoyne
The Third Defendant Michael Gascoyne's first job in F1 was as Chief Aerodynamicist with McLaren F1 in 1989–1990. He then worked on aerodynamics for Tyrrell and Sauber. From 1994 to 1998 he was Deputy Technical Director for Tyrrell. From 1998 to 2001 he was Chief Designer and then Technical Director for what was then Jordan Grand Prix. From 2001 to 2003 he was Technical Director of Benetton/Renault F1. From November 2003 to November 2006 he was Technical Director of Toyota's F1 team. In November 2006 he became Chief Technical Officer ("CTO") of what was then Midland F1 Racing. He remained CTO until November 2008, when Force India terminated his contract. Mr Gascoyne brought a claim for wrongful dismissal which was settled on the first day of trial. As described in more detail below, Mr Gascoyne acted as CTO of Lotus from the outset.
FondTech and Aerolab
Aerolab and its parent company the Fifth Defendant ("FondTech") are Italian companies. FondTech was founded by Jean-Claude Migeot in 1993. Mr Migeot was Chief Aerodynamicist for Renault F1 from 1981 to 1985. He held the same position for Ferrari from 1985 to 1988 and for Tyrrell from 1988 to 1990....
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