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Vestergaard Frandsen v Bestnet

Case Summary  |  Judgment  |  20 April 2011

 

 Six members of chambers have been involved in extensive litigation over confidential information relating to insecticidal polyethylene mosquito nets. The claimants are members of the Vestergaard Frandsen group. The defendants are Bestnet Europe Ltd, two former employees of Vestergaard Frandsen and other related companies. The claimants alleged that the defendants (with assistance from a non-party consultant, who had also been a consultant for the claimants) used their confidential information in development of the defendants’ NetProtect insecticidal net. Mark Platts-Mills QC, Tom Moody Stuart and James Whyte acted for the claimants. George Hamer acted for the defendants, led at first instance by Peter Prescott QC and on appeal by Martin Howe QC.

The action was launched with a without-notice application for disclosure at the start of 2007, which was granted by Kitchin J. The defendants applied to strike out the claim in an application dismissed in October 2007 (judgment). The trial of the action was heard in 2009 by Arnold J who gave a lengthy main judgment and a supplementary judgment relating to relief. He held that all of the defendants were liable for breach of confidence, finding that there had been misuse of the claimants’ confidential information in the creation of the defendants’ initial recipes in their development programme, and agreed with the claimants that documents annexed to the defence were forgeries concocted to support an untrue account of the development of the defendants’ product. After a learned exposition of the law on the scope of injunctions in confidential information cases, he granted a general injunction against misuse of the claimants’ confidential information but not to stop the sale of the defendants’ product that had received phase II approval from the World Health Organisation, on the basis that although that later product was derived from the confidential information, it no longer directly embodied it, and that discretionary factors weighed against an injunction. Arnold J ordered that the defendants should pay costs on the indemnity basis, which were then estimated at about £4.5m.

Before the appeal was heard, the defendants applied to adduce new evidence, namely a patent application of the claimants published after trial, and applied for disclosure relating to the experiments referred to in that patent application. In November 2010 the Court of Appeal ordered disclosure and remitted certain questions to Arnold J. After a trial of these questions with further expert evidence, Arnold J answered the questions in the claimants’ favour in March 2011 (judgment).

The defendants appealed against the finding of misuse, the liability of one of the personal defendants, the findings on the remitted issues, and made a free-standing appeal against the costs order. The claimants cross-appealed on the scope of the injunction. In April 2011 the Court of Appeal upheld the judge’s findings of misuse, on the remitted issues, and on the scope of the injunction, but allowed the appeal in relation to the personal defendant (judgment). The costs appeal was considered at a later hearing in June 2011, when the order for indemnity costs was also upheld.