Kerry Ingredients (UK) Ltd v Bakkavor Group Ltd & oRS

Information may retain confidentiality even where its ingredients or components are publicly known, or where reverse engineering is theoretically possible. The question is whether the information, viewed as a combination, could be discovered without substantial work or special labours. An equitable obligation of confidence arises where the recipient knew, or objectively had notice, that the information was confidential. Use need not involve exact replication; confidential information is used if it provides a starting point for a competing design. Where misuse and a sufficient risk of repetition are established, injunctive relief is generally appropriate. If confidentiality is limited, the injunction should last only for the period of the unfair head start.

Kerry supplied Bakkavor with technical specifications, process information and HACCP material concerning the manufacture of ambient edible infused oils. Kerry alleged that Bakkavor used that information to develop and install its own competing production process. Bakkavor denied misuse and disputed the confidential character of the information. The issues were whether the information had the necessary quality of confidence, whether the circumstances imposed an obligation of confidence, whether Bakkavor had made unauthorised use, and what relief was appropriate.

The claim followed an interim injunction granted by Judge Havelock-Allan QC in December 2015. The trial concerned the final determination of liability and remedies.

1. Liability. Bakkavor had misused information confidential to Kerry concerning the production of edible infused oils.
2. Quality of confidence. Applying the principles in Coco v A.N. Clark (Engineers) Ltd and the authorities concerning public information and reverse engineering, the information had the necessary quality of confidence. Although individual food-safety techniques were known, Kerry’s combination of techniques, proportions and process parameters was not obvious and could not be reverse-engineered without substantial work or special labours. The information therefore represented a product of human skill and ingenuity. The article published in “Food Manufacture” did not disclose the whole suite, or any significant part, of the relevant information.
3. Obligation of confidence. The applicable test, reflected in Force India Formula One Team Ltd v 1 Malaysia Racing Team Sdn Bhd, was whether the recipient knew or had objectively been put on notice that the information was confidential. A reasonable person in Bakkavor’s position would have understood that the material was supplied for food-safety and regulatory purposes and was not to be used to develop a rival product.
4. Unauthorised use. Exact replication was unnecessary. Consistently with Terrapin Ltd v Builders Supply Company (Hayes) Ltd, information is used where it serves as a starting point for a new design. Bakkavor’s extensive reliance on Kerry’s information during Project Aequo, and the similarities between the resulting processes, established misuse.
5. Remedy. Under Vestergaard Frandsen A/S v Bestnet Europe Ltd, a claimant establishing breach and a sufficient risk of repetition is generally entitled to an injunction. The court rejected the argument that an injunction was barred by oppression, unworkability or the Shelfer v City of London Electric Lighting Co working rule. However, the information had only limited confidentiality. Applying the springboard approach in Vestergaard, the injunction was limited to the period of the head start obtained through misuse. An injunction was granted until 30 June 2017, without preventing development work. Directions for an inquiry as to financial relief were available if Kerry wished.

The judgment was a first-instance decision of the High Court (Chancery Division). It followed an interim injunction made by Judge Havelock-Allan QC on 14 December 2015.