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Spring Board Doctrine: A critical study of trade secrets

 Introduction

The onset of globalization has led to a surge in intellectual activity and thereby initiated a
need for better methods on intellectual property (IP) protection. One of the forms of IP that
will soon overpower other recognized forms of IP protection is ‘trade secrets’. The greatest
advantage of this form of IP is that the protection provided is perpetual, thus gone are the
days of limited monopoly. This new wave of protection is based on an element of
trust of confidants who would maintain secrecy. But this system comes to a standstill
when there is a breach of trust or confidence by confidants entrusted with such secrets or in
case of companies when trusted employees are no longer in the service of the
organization owning the trade secrets. This paper looks at the possible remedies that a trade
secret owner who is also the employer, can get on such breach of trust or confidence. After
identifying the models used by courts of developed countries, the author attempts to
formulate a possible model that can be followed by Indian courts in counteracting this legal
hurdle.

Intellectual property (IP) in the legal sense is a property, something that can be
owned and dealt with. Statutory forms of IP are declared to be property rights. In certain
instances, the assignment of IP rights is expressly governed by statute and, where this
is so, assignment requires no consideration. The notion of property as being merely tangible
units has gone through a sea of change. The expression ‘property’ is a term of wide
connotation. It is not only the thing, which is subject- matter of ownership, but also includes
the dominium or the right of ownership or partial ownership. The expression is indicative and
descriptive of every possible interest which a party can have. It embraces within its purview
both corporeal and incorporeal rights. The Supreme Court has held that ‘there is no reason
why the word property as used in Article 19(1)(f) of the Constitution should not be given a
liberal and wide connotation and should not be extended to those recognized types
of interests which have the insignia or characteristic proprietary right’. Article 19(1)(f) has
been deleted with effect from 1979 and although the right has been reproduced in Article
300A, the right to property is no longer a fundamental right but has been relegated to being
a constitutional right. But the jurisprudence in relation to the interpretation of
‘property’ would be applicable in regard to Article 300A.

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Private thoughts, ideas, plans, feelings, and goals may be kept private or made public.
The onset of globalization and competition has led to a scenario where laws are required to
ensure exclusive access to individual thoughts and ideas. Though IP serves this purpose, it is
also expected to be beneficial for the whole of society. Society seeks to maximize
overall utility, which can be achieved by ensuring that new products and intellectual
works are created. This in turn can only be ensured by the establishment of a legal
system that ensures that these creations are protected. Limited rights are granted as
incentive for the production of such goods.

According to the utilitarian school, there is no natural right to control intellectual works.
Rights to control are granted only because this policy acts as an incentive for authors
and inventors to work in furtherance of greater and better intellectual pursuit. All forms
of IP law extend a private right to its holders, while some forms of IP protection have
been extended by means of legislation. But there still exists a form of IP and associated rights
and duties that have not been documented by means of legislation. This form of IP known
as ‘trade secret’, has gained much importance in light of the market oriented culture that
exists today.

 What are Trade Secrets?

The term trade secret is often used in relation to confidential information associated
with industrial and commercial activity. But in certain circumstances judges have
purported a different view. Justice Staughton differentiated trade secret from
confidential information.1 A ‘trade secret’ has been characterised as ‘information which,
if disclosed to a competitor, would be liable to cause real or significant harm to the owner
of the secret. It must be information used in the trade or business, and ... the owner must
limit the dissemination of it or at least not encourage or permit widespread publication’.The
modern definition of trade secret encompasses any information that can be used in the
operation of a business or other enterprise and is sufficiently valuable and secret to
afford an actual or potential economic advantage over others. Some states in the US
have adopted the Uniform Trade Secrets Act, which provides protection for trade
secrets if certain legal requirements are met. Two primary requirements are that
‘information not be generally known in the trade, which independently derives
economic value, actual or potential, and that the trade secret holder takes reasonable

1
Lasing Linde Ltd. v Kerr, 1991

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measures under the circumstances to protect the information as a trade secret.’ 2 Thus,
the novelty of the information is not essential, but it should be inaccessible.
The information should be crucial to the holder due to its potential value. It is very
difficult to compartmentalise ‘what is a trade secret?’ Trade secrets consist of
virtually any information developed by a company through its efforts, unknown to it
competitors. It must be material that is indigenously created, which has the potential
of creating profit for the company. Trade secrets may be technical and business
secrets. Technical secrets relate to the production of goods and services and may
consist of an invention, a manufacturing process, chemical formulae or engineering
and design drawings. They may also consist of craft secrets and recipes associated
generally with cosmetic, food and pharmaceutical trades. Business secrets are
generated by a company’s own activities, and include information on cost and
pricing data, sales statistics, lists of customers and sources of supply, market
projections and details of its promotional strategies and expansion plans. Such
information may provide to a firm competitive edge over its rivals.

Faccenda Chicken v Fowler3

The Court of Appeal held that, in deciding whether information amounts to a trade secret,
a court should consider four factors, the first being the nature of the employment.
Under this heading, the court would consider things such as how near the employee is
to the ‘inner counsel’ of the employer. This is because only information which is
made available to a select group of trusted employees is worth protecting.

Secondly, the information must be specific and detailed in nature, a general

business method or practice is not worth protecting. But it has also been held that
information, merely because it is technical, does not imply it is a trade secret. If an
employee is a specialist in any field their ordinary realm of knowledge may be very
specific and detailed.

Thirdly, whether the duty of fidelity and confidentiality has been impressed upon by the
employer with respect to the specific information in question while entrusting it on the
employee.

2
Uniform Trade Secrects Act, 1989 §1 (4)
3
Faccenda Chicken v Fowler, 1986

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Finally, whether the information can be easily isolated from other information, including
the employee’s own knowledge known or gain by experience, which can be easily
disclosed by the employee without being in breach of any covenant. The quintessential
reason for not patenting the matter is to prevent the information from coming into the
public domain. Trade secret offers a means of securing information by the company for
eternity. The formula for ‘Coca Cola’ is a trade secret since it is the essence of the drink. If
the company were to patent it, monopoly over its usage would be lost after two decades
or so. But if the formula is protected as a trade secret, then the formula to the drink
remains with the company forever. There are certain aspects of trade secret that differentiate
it from a patent. A trade secret as the name suggests has to be protected from outsiders,
and this protection is private protection unlike patents which are protected by legislation.
One of the doctrines developed by courts to justify injunctive relief to protect
threatened disclosure of trade is called ‘inevitable disclosure’ doctrine. If one is to get relief
under this doctrine, it has to be proved to the court that the plaintiff has made a prima
facie showing of existence of the trade secret. So if ever a trade secret were
compromised, the greatest hurdle would be to prove ownership over the trade secret in
question. In trying to prove that, often it is seen that the trade secret comes out into
the public domain. Therefore needless to say a trade secret is an expensive
investment, its basic tenet is secrecy i.e. keeping it away from the public domain and
if ever law is resorted to for its protection, the element of secrecy may be lost.

 Importance of Trade Secrets

Nowadays, while estimating the net worth of a company, one would find that the value of its
intangible assets would exceed far beyond that of its tangible assets. This difference in
value is the market assessment of the intangible assets such as goodwill, branding,
patents, trademarks, copyrights and trade secrets. Of these, trade secrets represent a large
chunk

of the intangible assets. Trade secrets are rapidly becoming IP of choice due to their
advantages in information economy. Machinery and mechanisms were the assets of
the ‘industrial age’ that required the provisions of patent law to protect them. Trade
secret law developed from the common law of unfair competition developed in the
nineteenth century by English courts. The overriding policy of trade secret law,
therefore, is to maintain and promote standards of commercial ethics and fair dealing. The

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necessity of good faith, honesty and fair play is the very life and spirit of the
commercial world and represents the very basic tenet of business. In the ‘information
age’, trade secret protection is better suited to the fast-moving and unpatentable
confidential information, which is essential to run companies. Trade secrets are
different from other forms of IP since their protection requires establishment and
maintenance. Although information technology age has made trade secrets immensely
valuable, it has also made them more likely to be stolen. Here, trade secrets are more
like goodwill and branding. The US courts have held that ‘the extent of a property right in
a trade secret is determined by the extent to which the owner of the secret protects his
interest from disclosure to others’. In light of its constraints it is usually seen that the
management of trade secrets is often poorly understood and poorly performed even in the
best of companies.Trade secrets per se are much broader in their scope than patents,
trademark or copyright. Patents require that the invention be novel, useful and non-
obvious. They are required to be open for public disclosure and need to fall within the
strict boundaries of the patentable subject matter. The protection conferred is not
everlasting, the exclusive rights expire no sooner than 20 years from the priority
date of the granted application. Trademarks protect only the printed word or image
representing a product or service. Copyrights protect only the manner of expression,
but not the content, nor the idea, information or concept being communicated.

Trade secrets, on the other hand, do not require any conformity to the definition of
patentable matter. They need not be novel or non-obvious. The entire object behind its
secrecy is its utility so a trade secret has to be utilitarian in nature. The most important
factor for a trade secret is that the content as well as the expression should remain a
secret.

 Confidential Information

The first and foremost factor in determining any breach of confidence is proving that
the information in question is one that warrants protection. Justice O’Connorhas said
‘It is first necessary that the claimant should absolutely make it clear and certain what
it was that he alleged to be confidential which he sought to protect.’ 4 If a claimant does not
identify the information in sufficient detail, their action may be struck out on the basis
that it is speculative and an abuse of process. Again, information is a very broad term

4
Thomas v Mould, 1968

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and therefore it is essential that its boundaries be laid down. It is therefore seen that
courts have been selective in deciding what constitutes confidential information. They
have specifically excluded information that is trivial in nature, immoral, vague, and
information which is in the public domain. Justice Megarry said that he doubted ‘whether
equity would intervene unless the circumstances are of sufficient gravity; equity ought
not to be invoked to protect trivial tittle-tattle, however confidential’ 5. In many cases,
the information protected by breach of confidence is detailed and specific, while
some are more general ideas and concepts like television series. The claimant, a
company, who was involved in developing methods of separating oil and water,
brought an action against the defendants, who were former employees, from working
in the same field. The court refused to grant relief, holding that the bare goal, purpose, or
possibility, a mere speculative idea, was not capable of being protected as a trade secret. 6
One of the most important restrictions on the information that is protected by
breach of confidence is that the action does not apply to material that is in the public
domain. Information, which is prima facie in the public domain, does not warrant any
protection. The level of secrecy that is required to be ensured for confidential
information is quite different from other forms of IP. It allows for a number of
people to know about a secret without the information being considered to be part of the
public domain. The status of information may however, change. A corollary would imply
that it would be possible for information that is in the public domain to become a secret.

Mars v Teknowledge7

The claimants in this case designed and manufactured coin receiving and
changing mechanisms which included ‘discriminators’ that functioned to determine the
authenticity and denomination of a coin fed into the machine. One of the problems
with the discriminators was that whenever there was a change in the coinage, they had to
be re-programmed. The defendants developed a new discriminator ‘cash flow’, which
had the ability to be reprogrammed for a new coin data. The defendant had in this
case broken the encryption system and reverse engineered the cash flow discriminator.
The claimants brought an action arguing, inter alia that the defendant’s activities by
way of reverse engineering amounted to a breach of confidence. Justice Jacob after
noting that the machine was freely available in the market held that the encrypted
5
Coco v A.N. Clarke (Engineers), 1969
6
Secton v Delawood, 1991
7
Mars v Teknowledge, [2000] FSR 138

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information in the cash flow machine did not have the necessary quality of confidence. He
said ‘anyone with the necessary skill to de-crypt had access to the information.’ In this
case, the court held that the rarity of the skill would not serve as adequate protection as any
buyer was free to acquire those skills.

 Springboard Doctrine

The springboard doctrine developed by the English courts attempts to prevent a person
from using any special information that may have been obtained in confidence from
gaining an advantage over others who would have had to obtain the information by
other means. In essence, the doctrine aims to ensure that a person who breaches a duty
of confidence is not able to benefit from the breach. A person who has obtained
information in confidence is therefore, not allowed to use it as a springboard for activities
which are detrimental to the person who has made the confidential communication. Such
information remains a springboard even when all the features have been published or can
be ascertained by actual inspection by any member of the public. Although a person must
not use the confidential information he acquires as a springboard, such a springboard does
not last forever. There is a time period within which the court can restrain the
activities of such person but such restriction is not forever. Courts have also held that
due to the inability to conclusively determine as to when the ‘springboard’ started, and
indicated that it would be more equitable to allow monetary relief rather than injunctive
relief.

The ‘springboard’ doctrine descends from the judgment of Roxburgh J which asserted that:

“a person who has obtained information in confidence is not allowed to use it as a spring-
board for activities detrimental to the person who made the confidential communication, and
spring-board it remains even when all the features have been published or can be ascertained
by actual inspection by any member of the public.”8

Put simply, if Company B comes into possession of confidential information owned by

Company A, and Company B made use of that information without Company A’s consent,
Company B would have gained an unfair advantage in producing the same or similar
products produced by Company A. Until such time as Company B acquired the information
lawfully from public sources, the ‘springboard doctrine’ prevents Company B from being

8
Terrapin Ltd v Builders’ Supply Co (Hayes) Ltd, [1967] RPC 375

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able to use Company A’s secrets as a ‘springboard’ and dispensing with the necessity of
spending its resources and enduring the same process of production that Company A
underwent.

In Terrapin case, features of a product were available to the public but a person wishing to
ascertain those features would have had to engage in considerable analysis to do so. The
defendant in that case secreted the claimant’s information, did not have to engage in analysis,
and gained a head start on other competitors. The Terrapin case established that where
confidential information is used to gain an unfair advantage before termination of a
confidentiality agreement, or even if the information was no longer confidential, a
‘springboard’ injunction is the appropriate remedy to restrain continued misuse of the
information.

On the contrary, the case of Vestergaard Frandsen A/S v Bestnet Europe Ltd 9 distinguished
the Terrapin case by expounding the circumstances in which a ‘springboard’ injunction
would not be appropriate. In case of Vestergaard, the claimant companies sought damages
and other relief for misuse of its confidential information when former employees and a
consultant, who aided in developing the claimant’s techniques enabling them to manufacture
and sell insecticidal nets, opened a competing business.

Vestergaard case concurred with the Terrapin case insofar as where the defendant has acted
in breach of an equitable obligation of confidence and there is risk of repetition, the claimant
would be entitled to an injunction. However, Terrapin did not consider whether an injunction
could be granted to restrain continued misuse once the information ceased to be confidential.
Vestergaard case filled this gap and emphasized the limited use of an injunction as a remedy
where confidential information has already been released.

Vestergaard case that once the information is in the public domain, it is no longer
confidential, and use of it cannot amount to a repetition of breach. It also established that
once information is available to the public, even if through no fault of the defendant, the
‘springboard’ doctrine will not apply and an injunction will not be granted to prevent a
defendant from benefiting from a past misuse of confidential information. It was therefore
held in Vestergaard that the most viable and appropriate remedy for a past misuse of
confidential information is either damages, or a restitutionary remedy such as an account of
profits.
9
[2009] EWHC 1456 (Ch)

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 Application of Confidential Information to Employer–Employee Relationship

There are certain special considerations in relation to the application of breach of

confidence between employer and employee.

During the Course of Employment

In most cases, the contract of employment will include express provisions dealing with
the nature and scope of the duty of confidence owed by the employee to the
employer and the courts usually enforce such terms of contract. Any express terms
imposing a duty of confidentiality upon the employee are subject to the general rules of
contract. When a contract does not contain any express clauses in respect to
confidentiality of the employee, such does not preclude the employee of not having
any duty of confidence. The courts have in certain cases outlined that the employees
are under an implied duty of fidelity to their employers.

Post Employment

When the contract of employment no longer subsists, the situation calls for
application of balance of interests by the courts. It would be unfair to enable employers to
prohibit an employee from working in the same area again. So in order to protect
themselves, employers normally include in their contract of employment a clause,
usually referred to as a restrictive covenant, which specifies that the employee
will not work in the same industry for a specified period after termination. 10 Since
obligations specifically not to disclose trade secrets will rarely provide satisfactory
protection because in most cases it is very difficult to segregate where skill and
experience ends and trade secret begins. Another option exercised by the employers is
that the person having knowledge of the ‘inner workings and dynamics’ of the
company is retained for a specified period of time during the course of which he does not
attend work but is paid. The period is to be determined on the same basis as in the
‘springboard doctrine’ i.e., as long as the information the employee possesses is of
importance to the company. Such form of retainership is usually termed as a ‘garden leave’.
In absence of an express duty of confidence in the contract of employment, courts
imply certain limited obligations on the use that an ex-employee can make of the
information acquired during the course of employment. In a normal business

10
Littlewoods Organisation v Harris, 1978

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context, the obligations imposed are primarily limited to the use that can be made of
trade secrets.

 Springboard Injunction

A springboard injunction is a type of injunction designed to remove or limit the advantage or

head-start that an employee has gained through unlawful activities, typically through
the misuse of the employer’s confidential information. The individual is placed
“under a special disability” by the injunction in order to “ensure that he does not get an
unfair start”.11 A springboard injunction is unlike any other kind of injunction, because it is
not targeted at preventing future unlawful activity but rather its purpose is to restore a level
playing field between the parties.

All of the early cases under the springboard doctrine are related to the misuse of
confidential information.

The classic case in the employment context is that of Roger Bullivant Ltd v Ellis12.

Mr Ellis, Bullivant’s Managing Director, left to set up a competing business, taking

confidential information with him including a card index with the contact details of
Bullivant’s contacts, which he used to contact those clients in direct competition. The
High Court granted an injunction prohibiting Ellis from entering into or fulfilling any
contract made with or through any of the contacts in the card index until judgment
or further order. Ellis appealed to the Court of Appeal, arguing that the injunction should
not apply to any customers that he was able to make contact with without using the card
index. His appeal failed on this point, the court concluding that “having made deliberate
and unlawful use of Bullivant’s property, he cannot complain if he finds that the eye of
the law is unable to distinguish between those whom, had he so chosen, he could have
contacted lawfully and those whom he could not”.

This kind of argument typically plays out these days in the context of employees
who help themselves to their employer’s customer database upon departure whilst
trying to argue that the information was publicly available via the internet. These
arguments are usually given just as short a shrift these days as they were in Bullivant’s time.
It was initially thought that the springboard doctrine was limited to cases involving the

11
Terrapin Ltd v Builders Supply Co (Hayes) Ltd and Others [1960] RPC128
12
Roger Bullivant Ltd & Others v Ellis & Others [1987] IRLR 491

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misuse of confidential information after Scott J declined to grant an injunction preventing an

employee from benefiting from earlier breaches of his duty of fidelity (in this case
encouraging the diversion of business during employment).

In UBS Wealth Management (UK) Ltd & Another v Vestro Wealth LLP & Others 13 ,
Openshaw J concluded that springboard relief is not confined to cases involving the abuse
of confidential information but can operate to prevent “any future or further serious
economic loss to a previous employer caused by former staff members taking an unfair
advantage of any serious breaches of their contract of employment”. In this case, an
injunction until trial was granted preventing the defendants soliciting or dealing with any
UBS client (save for those who had already agreed to transfer their business) and from
soliciting any UBS employee who had not yet resigned.

 CONDITIONS

In addition to the general principles applicable to the granting of injunctions, an applicant

will need to satisfy a court of the following four matters before springboard relief will be
granted:-

 That there has been unlawful behaviour on the part of the former
employee/director – typically misuse of confidential information but increasingly
other breaches of duty.
 That an unfair competitive advantage over the employer as a result of the unlawful
activity has been obtained.
 That the nature and period of the competitive advantage is more than “ephemeral” or
“short-term”.
 That the advantage still exists at the date the springboard injunction is sought
and will continue to have effect unless the relief is granted.

In the Sun Valley Foods case, Jonathan Parker J declined to grant springboard relief
because by the time the application was heard any unfair competitive advantage
gained by copying a confidential customer database which had been rarely used, had been
extinguished. It is a common error for Claimants to focus upon the gravity of the
Defendant’s misconduct rather than the effect of the breach and the extent of any
illegitimate advantage obtained. Thus logically, the seriousness of the breach and the

13
[2008] EWHC 1974 (QB)

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egregiousness of the Defendant’s conduct cannot have any bearing on the period for which
the springboard injunction should be granted – what matters is the effect of the breach of
confidence upon the Claimant in the sense of the extent to which the Defendant has gained an
illegitimate competitive advantage.14

 DURATION

The springboard injunction granted by the High Court in the Roger Bullivant case,
until judgment or further order, should, according to the Court of Appeal only have been
granted until trial or for a more limited period. According to Nourse LJ a springboard
advantage cannot last forever; the law does not restrain lawful competition and the
doctrine seeks to protect the injured and not punish the guilty. He concluded that it was not
right for the terms of the injunction to extend beyond the period for which the advantage may
reasonably be expected to continue. The Court of Appeal aligned the period of
springboard relief with the 12 month non-competition clause in Mr Ellis’ contract on
the basis that Bullivant must have considered that that was the period of restraint
necessary for its legitimate needs to be met.

A one-year period of springboard relief was also applied in Fisher-Karpark Industries Ltd v
Nicholls but this should not be regarded as a benchmark as springboard injunctions are often
and, arguably, usually, granted for much shorter periods.

Useful guidance was given in the QBE case by Haddon-Cave J. This was an
unusual example of a springboard injunction granted after trial of the main action. The
High Court granted a springboard injunction to continue for a further 3 months from
judgment being 12 months from the date of resignation of the Defendants. The Court
applied the following principles:-

 The appropriate measure for the length of springboard relief is the length of time it
would have taken the wrongdoer to achieve lawfully what he in fact achieved
unlawfully, relative to the Claimant. Any advantage must be measured relatively.
Wrongful activities can have both a positive and negative effect (benefiting the
wrongdoer whilst simultaneously harming the victim – this is particularly so in
the case of poaching key staff who then have to be replaced).

14
Sectrack NV v Satamatics Ltd [2007] EWHC 2003 (Comm)

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 The period of time over which the unlawful activity took place is relevant but
not decisive as springboard relief is “kinetic” not “linear”. In a team move case,
for example, there is the advantage of being able to solicit junior employees
over whom the Defendants exercise influence whilst their employment is
continuing compared with trying to recruit as a former employee: there is the
advantage of stealth and secrecy so that management are unaware and do not take
defensive measures but conversely the Defendants may have been able to work more
speedily by not having to be covert about their activities. The nature and length of the
springboard should be fair and just in all the circumstances.

It is incumbent upon the employer to identify the precise period and nature of the competitive
advantage and the failure to do so will result in a refusal to grant springboard relief. In
particular, the employer must provide evidence as to the length of time it would have
taken the Defendants to achieve lawfully what they had achieved unlawfully. The fact
that the departing employees have already entered into contracts with third parties is not of
itself a bar to the grant of springboard relief, although the Court of Appeal accepted that
courts should be wary of interfering with the contractual rights of innocent third parties.
The doctrine of springboard relief is not therefore confined solely to future contracts.

In the context of misuse of confidential information, it is insufficient simply to establish

removal of confidential information. It is also necessary to establish use, as mere
possession of confidential information will not create a head-start and can be
addressed simply by an order for delivery up and a normal confidential information
injunction.

Finally, the American Cyanamid principles should not be overlooked. As Arnold J

pointed out, the remedy for past misuse of confidential information is a financial one and
where appropriate the Claimant can claim a restitutionary remedy, namely an account of
profits, which deprives the Defendant of the benefit of his wrongdoing. 15 That said, it
is likely to be easier to argue for springboard relief at the interim stage, where the court’s role
is to best preserve the status quo pending trial, then it will be at trial itself. Given the nature
of a springboard injunction, it almost invariably follows “springboard does not last forever”.

 CONCLUSION: Striking a Balance

15
Vestergaard Frandsen A/S v Bestnet Europe Ltd [2009] EWHC 1456 (Ch)

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Trade secret law of any country or legal system essentially entails the following
elements: (i) identification of a trade secret, (ii) determination of the extent of such
breach and (iii) medium by means of which it was breached and finally the remedy.

Identification of a trade secret and the extent of its breach, have been extensively
debated in most legal systems and now it is quite clear as to how a trade secret is to
be determined and what differentiates a trade secret from confidential information.
Determining the extent of breach is purely a matter of fact and can easily be understood
after identification of the trade secret. The ambiguity is in relation to the remedy. The US
with its Uniform Trade Secrets Act of 1989 passed by about 40 states has more or
less laid down the law. This Act differentiates between ‘injunctive relief’and ‘damages’
and quite aptly so, since first and foremost the leak of information should be plugged and
only then can one speak of remedy. In the United Kingdom, the situation is entirely different
and courts have awarded different remedies including account of profits, damages,
constructive trusts and interim injunctions. The dangers of asking and getting too much
relief for too long are amply demonstrated by the outcome in

Universal Thermosensors Ltd v Hibben 16 where departing employees unlawfully

remove customer lists and pricing matrices with a view to setting up a competing business.
They approached and obtained orders from several customers featured in the lists. The
Claimant, after retrieving the stolen documents by means of a search order obtained
an interim injunction, restraining the Defendants from soliciting or entering into or
fulfilling any contract with any person with whom the Defendant had had contact
while the customer lists were in their possession. At trial, however, the court concluded
that this order went beyond what was necessary for the proper protection of the
Claimant’s legitimate rights. The effect of the injunction was to put the Claimant in a better
position than it would have been if there had been no breach of confidence in the first place
as its effect was to close down the Defendant’s business altogether. As the confidential
information was no longer in the Defendant’s possession, there was no ongoing
advantage at the time the injunction was granted. Any advantage obtained prior to the
grant of the injunction could adequately have been met through a claim for damages or an
account of profits. The court concluded that by the time the injunction was granted, given the
knowledge of Thermosensors’ customers and contacts, the former employees would have
been substantially in the same position as if they had not taken the customer lists.
16
[1992] 1 WLR 840

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Consequently, Thermosensors were ordered to pay £20,000 to the Defendants under their
cross-undertaking in damages. Whilst it is arguable that this decision is unsatisfactory
and inconsistent with both the Roger Bullivant case and PSMInternational it emphasises
the need for caution in obtaining a springboard injunction in terms that may not be able to be
maintained at trial.

India has not had much experience in relation to trade secret matters and the courts
while determining would have a diverse array of ‘persuasive’ value precedents from all
systems of law. Now with respect to post employment breach to a potential competitor or
existing competitor has been quite conclusively dealt with under the inevitable
disclosure doctrine. The ‘garden leave’ concept, which is loosely based on the ‘springboard
doctrine’ (i.e., to keep the employee technically in the roster till the confidential
information he has is of relevance to any competitor) is a capital intensive approach
but then maintenance of trade secrets are expensive and if they are never disclosed, the
owner technically retains monopoly for all eternity. Breach during the course of
employment can be easily dealt with by non-disclosure clauses or even implied or
express duty of fidelity in the contract of employment. Needless to say, India is in
desperate need of a dedicated legislation, which would concretise trade secret protection
in India. Trade secrets as mentioned earlier are fast becoming IP of choice for many
corporate bodies and therefore an effective expedient legislative intervention is felt even
more. Trade secret jurisprudence is lacking in India and so courts are not self reliant in
adjudicating disputes relating to any form of confidential information. This lack of
self-reliance forces Indian courts to take refuge in foreign principles, developed by courts
more experienced in the matter. This leads to ambiguity and ambiguity leads to delay.
This delay proves to be costly and may even result in complete loss of a trade secret.
Once legislation is in place it would immediately make trade secret owners aware of
their legal rights and duties and therefore sensitise them as to their obligation.
Most importantly a dedicated legislation would remove all doubts and misconceptions
thus expediting the adjudication of all legal suits in relation to such matters. Delay
in enactment of a dedicated legislation will bring it the same fate of tangled web of
legislative ambiguity and complicated judicial reasoning shared by many legal concepts.
This will in turn undermine the very purpose of having a trade secret in the first place.

INTELLECTUAL PROPERTY RIGHTS-II