Speed Seal Products Ltd v Paddington
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE FOX,LORD JUSTICE LLOYD,SIR GEORGE WALLER |
| Judgment Date | 31 July 1985 |
| Judgment citation (vLex) | [1985] EWCA Civ J0731-2 |
| Docket Number | 85/0420 |
| Court | Court of Appeal (Civil Division) |
| Date | 31 July 1985 |
and
[1985] EWCA Civ J0731-2
Lord Justice Fox
Lord Justice Lloyd
Sir George Waller
85/0420
1983 S. No. 3308
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR VIVIAN PRICE, Q.C., sitting as a Deputy High Court Judge)
Royal Courts of Justice,
MR COLIN A. BRODIE, Q.C., and MR G. HOBBS (instructed by Sharpe Pritchard & Co., Agents for Broomheads, Solicitors, Sheffield) appeared on behalf of the Appellants.
MR A. WILSON (instructed by Furley, Page, Fielding & Pembrook) appeared on behalf of the Respondents.
This is an appeal from a judgment of Mr Vivian Price, Q.c., sitting as a Deputy Judge of the Chancery Division. It raises two issues: (i) whether the plaintiffs' claim for injunctions should be struck out, and (ii) whether the defendants should be given leave to amend their pleading by adding a counterclaim in the form of a draft which is before the Court. The Deputy Judge decided in favour of the defendants on both issues. The plaintiffs appeal.
The action is concerned with information relating to couplings for use on pipes at oil rigs and oil jetties. The information is alleged by the plaintiffs to be confidential information of theirs. The first defendant is Mr Paddington, an engineer. The second defendant is a company controlled by him.
Mr Paddington formerly worked for the plaintiffs as a member of its Coupling Design Committee from the 16th February 1981 to the 4th October 1981. He had agreed with the plaintiffs to work for the company on that Committee on or about the 10th February 1981.
The Statement of Claim, in paragraphs 4–11 thereof alleges as follows:
"4. It was an express and further or alternatively an implied term of the said agreement that the First Defendant would not at any time use for his own benefit or for the benefit of any other person or persons or communicate to any other person or persons his knowledge of any design confidential to the Plaintiffs acquired in the course of carrying out or for the purpose of enabling or assisting him to carry out his duties as a member of their said Committee.
5. The First Defendant worked for the Plaintiffs as a member of their said Committee from 16th February 1981 to 4th October 1981.
6. The designs for coupling means devised for the Plaintiffs between 16th February 1981 and 4th October 1981 by the members of their said Committee are and have at all material times been designs confidential to the Plaintiffs save in so far as the same have been published by or with the consent of the Plaintiffs.
7. During the period 16th February 1981 to 20th March 1981 the members of the said Committee devised a cam-operated coupling device provided with a single action cam and several cam followers. Particulars of the cam-operated coupling device devised by the members of the said Committee and of the manner in which the same is alleged to have been devised are given in the Summary marked 'Confidential' delivered herewith.
8. The design of the said cam-operated coupling device is a design the knowledge of which was acquired by the First Defendant in the course of carrying out and for the purpose of enabling and assisting him to carry out his duties as a member of the said Committee.
9. The Plaintiffs have at all times kept the design of the said cam-operated coupling device confidential to themselves.
10. The First Defendant has at all material times known or ought at all material times to have known that the design of the said cam-operated device was confidential to the Plaintiffs.
11. In the premises the First Defendant has at all material times been bound by his obligations referred to in Paragraph 4 above and further and alternatively has at all material times owed the Plaintiffs a duty in equity not to use his knowledge of the design of the said cam-operated coupling device for his own benefit or for the benefit of any other person or persons and to keep the design of the same confidential to the Plaintiffs".
The plaintiffs further allege that from some date unknown down to and beyond the date of the Writ, the defendants have used the design of the cam-operated coupling device to obtain orders for the supply of coupling devices embodying Mr Paddington's knowledge of the coupling device.
The plaintiffs claim an injunction to restrain the defendants from (inter alia) using or communicating to any other person information confidential to the plaintiffs concerning the design of any couplings designed for them by any member of the Couplings Design Committee between the 10th February 1981 and 4th October 1981.
The order to strike out the claim for injunctions:
The defendants' attack upon the claim for injunctions is based on the contention that the alleged confidential information was no more than a concept, and had been thoroughly published to the world. This was based upon publication by the defendants of a brochure, and the publication by Mr Paddington of his European patent application on the 26th October 1983.
The Judge concluded—and it is not in dispute for the purposes of this motion—that the alleged confidential information had indeed been published to the world by the defendants or one of them.
The plaintiffs contended before the Judge that accepting that the information had been so published to the world, such publication was wrongful, that a wrong-doer cannot rely upon his own wrongdoing and will be under a special disability—and that the Court could grant an injunction on the "springboard" principle. The Judge rejected that, and held that any period of protection available under the "springboard" principle has long since expired.
In relation to the protection of confidential information which has been published, there are three situations, namely:
(1) The publication is made by or with the consent of A (the person to whom the obligation is owed). In such a case, the owner of the confidential information, A, has given it to the public at large. B, who previously owed A a duty not to disclose the information is released from that duty (see Mustad v. Dosen (1964) 1 WLR 109). He has the same rights as every other member of the public.
(2) The publication is made by or with the consent of X (a stranger). In Cranleigh Precision Engineering Ltd. v. Bryant (1965) 1 WLR 1293, Roskill J., at page 1316, said:
"….. the effect of that decision" (i.e. Mustad v.Dosen) "clearly is that if the master had published his secret to the whole world (as had the appellants in that case) the servant is no longer bound by the promise to his master not to publish that same secret, but it is important to observe that the publication in that case was publication by the master. In the present case the publication was by Bischoff who was never the master of Bryant. Bryant's master was the plaintiffs and the plaintiffs have never published anything, even their own specification. Mr Sieghart sought to extract from the decision in Mustad the wider proposition that no matter by whom the publication took place, all attributes of secrecy of any kind which might have attached to the information in Bryant's possession automatically disappeared once publication had taken place".
And at page 1319, Roskill J. said:
"In the present case Bryant as possessor of what I have held to be the plaintiffs' confidential information is seeking to free himself from his obligations of confidence, not because of what the plaintiffs have published, for they have published nothing, but because of what Bischoff published—a publication of which Bryant only became aware because of his contractual and confidential relationship with the plaintiffs".
In the circumstances, Roskill J. granted an injunction against Bryant.
It appears, therefore, that the fact that a third party has published the information does not necessarily release B (the person who owed the duty of confidence) from his obliga- tions. The Court will prevent B from abusing his position of confidence.
(3) The third case is where the publication is by or with the consent of B (the person who owes the obligation of confidence). He, I would suppose, cannot be in a better position than he would be if the publication had been made by a stranger.
Now in the present case it is pleaded in the Statement of Claim (Paragraph 4) that it was an express, or alternatively an implied term of the agreement between the plaintiffs and Mr Paddington that he would not use, for his own benefit or that of any other person—or communicate to any other person—any design confidential to the plaintiffs and acquired in the course of carrying out his duties to the Committee.
Further, the plaintiffs have not themselves published the idea in question. The publication was by Mr Paddington, and, for the purpose of the present application, the publication must be assumed to be wrongful.
On the facts as pleaded it is not, I think, in dispute that the plaintiffs must be entitled to damages. It is said, however, that no injunction could be granted. Now the Cranleigh case shows that the mere fact that publication has been made by a third party does not necessarily release from his obligations a person who previously owed a duty not to disclose. The purpose of an injunction is protection. Whether a plaintiff, in circumstances such as the present, needs protection might depend upon the state of the market. If, for example, the only traders seriously competing in the market are the plaintiff and the defendant (the latter being a person who, in breach of duty to the plaintiff, wrongfully published the...
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