PennWell Publishing (UK) Ltd v Isles and Others
| Jurisdiction | England & Wales |
| Judge | MR JUSTIN FENWICK QC |
| Judgment Date | 18 June 2007 |
| Neutral Citation | [2007] EWHC 1570 (QB) |
| Date | 18 June 2007 |
| Court | Queen's Bench Division |
| Docket Number | Claim No: HQ06X02998 |
[2007] EWHC 1570 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mr Justin Fenwick QC
Sitting as a Deputy Judge of the Queen's Bench Division
Claim No: HQ06X02998
David Reade QC (instructed by Mayer Brown Rowe & Maw) for the Claimant and Korieh Duodu (instructed by David Price Solicitors and Advocates) for the Third Defendant.
Hearing dates: 26, 27, 28, 29, 30 March 2007.
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
Sitting as a Deputy Judge of the Queen's Bench Divison
Introduction
The Claimant is a wholly owned subsidiary of PennWell Corporation, which describes itself as a business to business media company based in the USA which provides print and online publications, conferences and exhibitions, research, online exchanges and information products to strategic global markets. The parent company describes itself as a world leader in the development of conferences and exhibitions, managing and producing events worldwide across a large spectrum of industries including power generation.
PennWell UK's business is run from two offices, of which the one relevant to this litigation is in Essex. This office principally manages PennWell's conferences and exhibitions and is responsible for 11 events which are held worldwide in the power, petroleum, fire engineering and related industries.
This action arose in October 2006 because the Claimant was concerned that the First, Second and Third Defendants were involved in setting up the Fourth Defendant, the Energy Business Group Limited, to compete with the Claimant and that they had unlawfully removed and were using confidential information of the Claimant for the purposes of that competing business. By the time that the matter came to trial, the claims against the First, Second and Fourth Defendants had been compromised, but it is necessary to set out some of the background facts and the history of the litigation in considering the claims which remain against the Third Defendant.
The First Defendant was employed by the Claimant in February 1997 and by the time he left the company on 1 September 2006, he had been group publisher and general manager for over 5 years and was responsible for the whole of the UK business. He was the most senior PennWell employee in the United Kingdom.
The Second Defendant joined PennWell in November 1997 and left on 18 August 2006. He was primarily responsible for the selling of advertising.
The Third Defendant, Junior Isles, joined PennWell in September 1997 and left on 8 September 2006. The Claimant described his role as publisher of Power Engineering International and editorial director for the Claimant's global power events, with responsibility for the overall conference and educational content of those events, and for an advisory board of industry experts responsible for the strategic positioning of the Claimant's global power conferences. Mr Isles asserted that his role was narrower, being limited to acting as publisher and editorial director of Power Engineering International and conference chairman for Power-Gen Europe and Power-Gen Asia. For the purposes of my Judgment, it is sufficient to state that I find that he had an important role as publisher and conference chairman for international conferences for the power industry.
The contracts of employment of both the First and Second Defendants contained restrictions on competition during and for the first 2 years after the end of their employment. However, although it was initially pleaded that Mr Isles was bound by the same covenant, the Claimant accepted before the matter came to trial that in his case the relevant clause of his contract had been varied by agreement with an authorised representative of the Claimant, Mr Kent Hudson, so that he was not bound by that clause at any time material to this action.
At some point during 2005, Mr Ornstien and Mr Isles decided, following earlier discussions, that they would set up a business together and together set up the Fourth Defendant company.
Mr Isles told me that his intention was that the Energy Business Group would be different from any business of the Claimant in that it would focus on “energy” rather than “power”. He described the difference as follows:—
“At this point I should perhaps clarify the important difference between “energy” and “power” in this industry. “Power” refers to what happens to fuel after it arrives at a power station. How it is converted to electricity and then its despatch to the electricity grid would also be covered. When we speak of “energy” we are taking into account issues before the fuel arrives at a power station. The emphasis is also put on the fuel source: markets for that fuel, i.e. its availability and pricing. I believed that if more attention was paid to say the long term pricing of coal where it was more likely to come from and its quality, we would be able to spot and maybe predict trends in the power market. I wanted TEBG to be a forum for discussing these issues. It did not cross my mind that this would “compete” with PennWell or harm their business in any way.”
However, the website launched by the Fourth Defendant stated that it was “a new media organisation created to provide comprehensive and timely information on the global power and energy markets” and that it intended to promote a series of “conferences for the power and energy industries”.
Although I accept that the focus of the Energy Business Group may have been intended to be narrower than that of the Claimant, I am satisfied that it was intended from the outset to compete with a significant element of the Claimant's business.
That finding is reinforced by the contents of a Business Plan which had been prepared at least in a draft form by the end of December 2005. In my judgment, this Business Plan provides an important insight into the Defendants' intentions. Mr Ornstien and Mr Isles were to be active directors and were to invest approximately £30,000 each. The company was to be formed:—
“to provide a comprehensive marketing service to the Energy sector. The services provided … will include media … conferences, seminars, exhibitions, consultancy and sales and marketing”. The range of services will be provided for all personnel and businesses involved in the Energy sector, that includes power generation, transmission and distribution, fuel supply, renewables and oil and gas. Both technical and strategic issues will be covered.”
The Business Plan went on to state that the aim was to launch the company on 1 September 2006 with a newsletter published monthly from that date and with events planned in Thailand in February 2007, Indonesia in May 2007, the Middle East in September 2007 and India in November 2007.
The Energy Business Journal was intended to be launched in September 2006 as a monthly newsletter with 1,000 free copies being mailed out on a monthly basis rotating the circulation to different recipients each month.
It is also important to note that there was a detailed time line containing events to be carried out from October 2005 through to the end of March 2007, including meeting with proposed partners in Hong Kong, Middle East and elsewhere in November 2005, and an entry curiously described as “clean databases”; in December 2005 determining the initial 1,000 recipients of the journal and the “top 100 advertisers and exhibitors to prospect” and thereafter a series of planned contacts with suppliers, partners and negotiations with vendors for events, leading up to the official launch in September.
In opening it was said that Mr Isles only gave a cursory look at the Business Plan and did not approve all the steps set out in it. Generally it was said that he was not much involved in the Business Plan and in particular he was not aware that Mr Ornstien and Mr Noyau were acting unlawfully or taking PennWell's documents. In his oral evidence before me, Mr Isles sought to distance himself from this Business Plan. He said of the Business Plan that it was not his plan but Mr Ornstien's plan, that he was busy but Mr Ornstien tends to rattle off documents. He told me that he was only having very little input into the setting up of the business, and it was not his concern to identify the recipients of the journal, that he did not know what the words “clean database” meant, and that he did not discuss or know where the lists referred to in the Business Plan would come from. When challenged he said “I know you can purchase them [lists]. We did not discuss them. I am told that you can get lists for a couple of hundred pounds per thousand or something like that”. However, it is clear from material found on forensic examination of the computer used by Mr Ornstien, in particular, that Mr Isles was actively involved in considering the structure and message of the Energy Business Group. For example, by an e-mail dated 16 January 2006 to Mr Ornstien, he made some changes to a general presentation, adding some comments to the bottom of several slides. One of his comments read “this visual looks too much like a PennWell visual”.
It is clear that during the latter part of 2005 and 2006, Mr Isles was planning to leave his secure job with PennWell to set up the Energy Business Group and despite his evidence that he had little involvement in what was being done by Mr Ornstien, I am satisfied that the proposals were sufficiently important for his future that he as a...
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