Inline Logistics Ltd v UCI Logistics Ltd

A combination of design features may possess the necessary quality of confidence even though each feature, considered separately, is obvious, commonplace or publicly available. The protected information must, however, be identified precisely. Where confidentiality attaches only to a particular combination, it is insufficient to show that a later design retained individual unprotected features.

In a breach of confidence claim, adding material or modifying information does not necessarily prevent use. The question remains whether the protected information was used. The scope of an implied licence is determined objectively and may, where business efficacy requires, permit the recipient to use confidential tender material through a third party to complete the tender.

Inline Logistics Ltd supplied UCI Logistics Ltd with a warehouse design drawing for UCI's tender to Kimberley-Clark Ltd. UCI later engaged Dexion to help finalise the tender before the deadline. The resulting tender drawing shared some features with Inline's drawing but contained substantial redesigning.

Mr Justice Ferris dismissed Inline's claim for misuse of confidential information following a five-day trial. He held that confidentiality existed only in the particular combination of six design features, that UCI had not used that combination, and that any relevant use had been authorised. Inline appealed all three conclusions. UCI's respondent's notice challenged the finding that the combination was confidential.

The central issues were the identity and confidentiality of the information, whether UCI used it, and whether its use was authorised.

Appeal dismissed unanimously. Lord Justice Mummery delivered the principal judgment. Lord Justice Kennedy agreed with him on use and with both members of the court on the remaining issues. Lord Justice Sedley agreed that the appeal failed, but differed on whether use had been established.

1. The three requirements for an equitable breach of confidence claim were those stated in Coco v A N Clark (Engineers) Ltd [1969] RPC 41: confidential information, circumstances giving rise to an obligation of confidence, and unauthorised detrimental use.

2. The trial judge was entitled to find that no individual design feature, nor the warehouse dimensions obtained by survey, was confidential. Expenditure of skill and effort alone was insufficient. However, he was also entitled to find that the particular combination of six otherwise commonplace features in drawing 113 was confidential. A selected design produced by skill, experience and effort was not a mere non-selective collection of public information.

3. Mummery LJ, with whom Kennedy LJ agreed, held that UCI had not used the protected combination. The correct inquiry in a confidence claim is use; adding other material does not itself prevent use. But the only protected information was the particular combination in drawing 113. The presence in drawing 118 of individual, non-confidential features, or its indirect derivation from drawing 113, did not establish use of that combination.

4. Sedley LJ considered that Dexion's admitted reliance on the group of ideas established use, and that subsequent variations did not diminish it. He nevertheless agreed that the claim failed because Inline had put the ideas at UCI's disposal for the tender.

5. In any event, UCI was authorised to use the material for the Kimberley-Clark tender. Applying business efficacy to the circumstances, the implied licence extended to engaging Dexion to complete the tender when Inline could not assist before the fixed deadline. Sedley LJ characterised the same conclusion as equitable acquiescence.

The appeal was dismissed. Inline was ordered to pay £10,000 costs within 21 days, with the balance subject to detailed assessment.

• Court of Appeal (Civil Division): Inline's appeal was dismissed unanimously: [2001] EWCA Civ 1613.
• High Court: Mr Justice Ferris dismissed Inline's claim for misuse of confidential information with costs on 31 July 2000, following a five-day trial.