Weiss Technik UK Limited & Ors v Christopher Davies & Ors

An equitable breach of confidence may be established where a defendant deliberately obtains, copies, retains or stores information which is, or ought to be, understood to be confidential. Specific use in business or proof of financial loss is not required in such circumstances.

Confidentiality obligations may arise expressly, by implication in an employment contract, or in equity. Copyright infringement includes electronic storage and copying. Database right protects substantial investment in collecting, organising and verifying data, and extraction includes transferring data to another medium, even where the data are rearranged.

Three companies in the Weiss Technik group brought liability claims against four former employees and a competing company established by one of them. The claims concerned confidential information, proprietary software, passwords, a customer database, copyright, database rights, inducement of breaches of contract and unlawful means conspiracy.

The trial was confined to selected sample categories and liability issues. The court considered whether the defendants had taken or used Weiss materials for the competing business, whether contractual breaches had been procured, and whether copyright and database rights had been infringed.

1. Breach of confidence. The individual defendants were bound by contractual confidentiality obligations, including obligations incorporated from employee handbooks. The software, passwords, customer database and internal technical materials were confidential. SJJ was subject to corresponding equitable obligations.
2. The court applied the principles in Faccenda Chicken v Fowler and Coco v AN Clark (Engineers). Deliberate and surreptitious acquisition, retention and storage of confidential material was sufficient. It was unnecessary to prove that every document had been examined or used, or that loss and damage had resulted.
3. All defendants breached contractual or equitable obligations concerning Weiss software, passwords and instructions. Mr Jones, SJJ and Mrs Whitfield also breached obligations concerning the ServiceLife database. The selected claims in sample categories 3, 21, 35, 36 and 44 were established.
4. The five ingredients of inducing or procuring breach of contract were satisfied. Mr Jones and SJJ procured breaches by Mr Davies, Mrs Whitfield and Mr Oram. Mr Jones knew, or was at least recklessly indifferent to, the relevant contractual terms and knew that the conduct would breach them.
5. Copyright. Applying the Copyright, Designs and Patents Act 1988, Mr Davies infringed copyright by downloading UpToDate3 and Contour. Mr Jones and SJJ infringed copyright by storing Simpac, UpToDate3 and Contour on Dropbox and by copying Contour for a software developer. Other alleged copying and communications were not established.
6. Database rights. The investment in collecting, organising and verifying the ServiceLife data was substantial and independent of the creation of the underlying customer data. Mr Jones, SJJ and Mrs Whitfield infringed by extracting and storing database material. SJJ further infringed by using extracted customer details for marketing emails.
7. The unlawful means conspiracy claim was not determined because it had not been properly developed at trial. Quantum and loss were likewise not determined, although detriment would have been established if it were required for the equitable confidence claims.