Invista Textiles (UK) Ltd v Adriana Botes
| Jurisdiction | England & Wales |
| Judge | Mr Justice Birss |
| Judgment Date | 21 January 2019 |
| Neutral Citation | [2019] EWHC 58 (Ch) |
| Docket Number | Case No: HC-2017-000482 |
| Court | Chancery Division |
| Date | 21 January 2019 |
[2019] EWHC 58 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
Royal Courts of Justice
The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Mr Justice Birss
Case No: HC-2017-000482
Sue Prevezer QC and Quentin Cregan (instructed by Quinn Emanuel Urquhart Sullivan LLP) for the Claimants
Adrian de Froment (instructed by Virtuoso Legal) for the Defendants
Hearing dates: 3rd, 4th, 8th – 11th and 19th October 2018
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
| Topic | Paragraphs |
| Introduction | 1 |
| The issues | 18 |
| The law | 43 |
| The witnesses | 59 |
| The facts | |
| The early period | 83 |
| Scope of work done / Invista's interests | 115 |
| The acts complained of | 129 |
| Assessment | |
| (i) Confidential Information | 172 |
| (ii) Company Property | 191 |
| (iii) Competition | 238 |
| (iv) Non-solicitation | 254 |
| (v) Duty of Fidelity | 261 |
| (vi) SilicoLife and inducing breach of contract | 267 |
| (vii) Liability of the corporate defendants and joint liability | 273 |
| (viii) Remedies | 275 |
| Conclusions | 296 |
Introduction
The claimants (together Invista) are part of one of the world's largest international textile and polymer groups. The business makes polymers, chemical intermediates and fibres including nylon and the intermediates used to make nylon. The well known brand LYCRA is one of Invista's brands. The intermediates and textile business was originally part of Dupont (part of it having derived from ICI). It was sold in 2004. Today Invista is part of the Koch Industries group based in Wichita, Kansas, USA.
The individual defendants (Dr Botes, Dr Chokkathukalam and Dr Chen) are scientists. They are former employees of Invista (the first claimant company). The fourth defendant, VideraBio Ltd, is dormant. The fifth defendant, Videra Services Ltd, employs Dr Botes and Dr Chen. Dr Botes is currently the sole shareholder and director of the fifth defendant although her husband, Dr Robin Mitra, was a shareholder of the fifth defendant until 6 th April 2016 and a director until 1 st August 2017 (according to filings made to Companies House).
A common form of nylon is nylon 6,6. The numerals refer to the number of carbon atoms in the monomer intermediates (such as adiponitrile) which are then polymerised to make the polymer. The intermediates are produced from raw materials (such as butadiene) which themselves are derived from oil. That is why products like nylon are called petrochemicals. Of course oil is not regarded as a sustainable natural resource and in 2010 Invista set up a Sustainability Group. The precise role of the Sustainability Group is disputed but broadly it is clear that part of its remit was to conduct research into ways of producing intermediates by other routes, distinct from oil. The aim was to make the intermediate compounds or their precursors biochemically, by genetically engineering suitable microorganisms. The microbes might consume sustainable feedstocks such as carbon dioxide and turn them into useful organic chemicals such as 1,3 butadiene.
As part of this work Invista had a contract with a company called SilicoLife.
In 2010 Dr Botes was an experienced biotechnologist. She started working for Invista in July 2010 and joined the Sustainability Group. Within the Sustainability Group she was Biotechnology Group Leader until July 2014 and then R&D Director. She was responsible for the relationship with SilicoLife for a number of years.
By 2011 Dr Chen was a biochemist and molecular biologist with extensive experience in the laboratory. He had worked with Dr Botes before and in January 2011 Dr Chen joined Dr Botes' biotechnology group at Invista.
In March 2014 Dr Chokkathukalam started working at Invista and joined the group. His expertise was in computational biology and bioinformatics.
The fifth defendant company (Videra Services) was incorporated on 22 nd January 2015. Initially it was used as the vehicle for Dr Mitra, who is also a biotechnologist, to contract out his services. All three individual defendants became disillusioned with their work at Invista. In January 2016, while still employed at Invista, Dr Botes started looking to set up a new biotechnology venture. She did not regard it as a venture which would compete with Invista in future or would use any Invista trade secrets. Her view was that while the new work would involve working on genetically engineering microbes to produce useful chemicals from sustainable feedstocks, the microbial strains, the particular feedstocks and the chemical end points were quite different from the ones Invista was interested in.
Dr Chokkathukalam and Dr Chen assisted Dr Botes with this work, also while still employed at Invista. The new venture was to be called VideraBio. As part of that effort, Dr Botes dealt with SilicoLife with a view to a joint venture with them in future.
Dr Botes gave in her notice in March 2016. Her final day of employment was disputed but I find it was 14 th April 2016. Once she left Invista she became a director of Videra Services and worked to set up the VideraBio venture. It appears that this venture was intended to have been conducted through the fourth defendant, VideraBio Limited, which was incorporated on 5 August 2016. However in practice, the fourth defendant did nothing and VideraBio is a trading name for the fifth defendant.
Dr Chen gave notice on 28 th July 2016. His last day at work was 5 th August 2016 and his employment terminated on 31 st October 2016. He started working for VideraBio on 1 st November 2016.
Dr Chokkathukalam gave notice on 28 th October 2016. His final day of employment was 28 th November 2016. Shortly after that Dr Chokkathukalam joined Vianet, an unrelated IT company. He has left biology altogether.
In January 2017 Invista discovered various files relating to VideraBio on Dr Chokkathukalam's work computer. Proceedings were commenced on 22 nd February 2017 based on allegations of breach of contract or breach of equitable obligations, predominantly in relation to misuse of confidential information, and inducing a third party breach of contact (the third party being SilicoLife).
An interim injunction was sought. It was compromised and the first consent order was made by Rose J on 2 nd March 2017. The defendants agreed to search for and deliver up any material containing Invista's confidential information or which was Invista's property. There were problems with compliance with that order and a further order, also by consent, was made by Mann J on 16 th June 2017 (the second consent order). This provided for forensic imaging of the defendants' various devices and accounts. In the consent order the defendants agreed that any material found which was “Invista Material” would be delivered up and destroyed. The term Invista Material was defined at the interim stage. Although the definition was not formally identical to the definition of Company Property in the employment contracts, the two can be treated as synonymous for all purposes, as Dr Botes accepted.
The forensic process took a long time. During that process thousands of deleted files were found. The defendants contend that these were largely emails and attachments which had been sent to permit the individual defendants to work at home as part of their employment, the files were not used for the benefit of VideraBio and aside from the Chen Library (see below) the files were unrelated to one another. The defendants contend that the fact they were deleted was not sinister at all. The documents had simply been deleted in the ordinary course of things (subject to a point on Dr Chen). The forensic exercise recovered these deleted files and this leads to one of the major disputes between the parties. The evidence discussed various “levels” of deletion of electronic files. Deletion to “Level 3” equates to removing the deleted document from the recycle bin in a Windows computer. Such documents are only recoverable with special software.
On 20 th March 2018 Lance Ashworth QC made a further order concerning this forensic process and by the summer of 2018 the process had finished. Invista sought summary judgment of certain claims before Arnold J. That application was dismissed on 14 th September 2018. It was explained to Arnold J and has been repeated before me that the real dispute between the parties was then and is now about costs. Following that application amendments were made to the Particulars of Claim to add references to Company Property to the various paragraphs which previously referred only to misuse of confidential information.
Although it is plain that the main dispute between the parties is costs, the fact remains that this is a trial of the merits of whatever causes of action are in issue. While the general principle is that the successful party's costs are paid by the unsuccessful party, it is not immediately apparent that the very high costs which have been incurred (I am told Invista's costs so far are more than £1 million) necessarily fall to be regarded as costs attributable to at least some of the causes of action which are still in issue. In any event, this trial is a necessary step in bringing these proceedings to a conclusion, absent agreement. Nevertheless, for example, one of the issues to be decided is the scope and reasonableness of a clause in the various employment...
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