## Facts

- Cray Valley Ltd. (Cray), a resin manufacturer, acquired the resin business of Borden in April 2000 in a market with excess manufacturing capacity.
- Cray did not purchase Borden’s Haverhill manufacturing site or the plant and equipment located there.
- After the acquisition, there was a short transitional manufacturing period (a “tolling” arrangement) during which resins continued to be made at Haverhill for Cray while operations were wound down.
- During the transition Cray obtained access to business and manufacturing documentation at Haverhill, including formulations, batch sheets, and process directions used for producing solvent-based resins.
- Borden sold the Haverhill site to Deltech Europe Ltd. (Deltech), the UK arm of a US resin business, and Deltech took over the site for resin manufacture.
- Deltech hired several former Borden employees whose jobs did not transfer to Cray, including John Scanlan and Christopher Riley.
- Cray sued Deltech and the two former employees alleging misuse of confidential information in the manufacture of resins at Haverhill, and added a copyright infringement claim based on alleged copying of written production materials.
- At trial, the evidence showed the formulations relied on by Cray were often applied with flexibility in practice, were common in the resin industry, and were described in published industry materials (including an industry guide).
- Much of the know-how relied on by Cray was remembered by the former employees rather than taken from protected documents, and neither Borden nor Cray had required these employees to sign confidentiality agreements or restrictive covenants.
- The relevant documents were not consistently treated as confidential (for example, they were not clearly marked confidential and access controls were limited).
- Cray had also pleaded civil conspiracy and database right claims, but those were abandoned before the end of the case.

## Issues

1. Whether the resin formulations, process conditions, and associated manufacturing documents had the necessary quality of confidence to attract protection.
2. Whether the information was imparted, obtained, or held in circumstances that imposed an obligation of confidence on the former employees and/or Deltech.
3. Whether the defendants made unauthorised use of any protectable confidential information in manufacturing resins at Haverhill.
4. Whether any alleged copying of written materials amounted to copyright infringement, and whether the copyright claim provided any separate basis for relief if the confidence claim failed.

## Decision

- The High Court (Chancery Division, Jacob J) found for the defendants and dismissed the breach of confidence claim.
- The court held that the asserted “recipes” and related manufacturing information did not amount to protectable confidential information on the facts: the formulations were largely standard practice in the trade and material elements were available from published industry sources.
- The court also found there was no sufficient basis to treat the information as having been shared or held under an enforceable obligation of confidence, given the lack of confidentiality agreements, the limited steps taken to signal secrecy, and the way the information was handled at the site.
- The court accepted that former employees may use their general skill, experience, and recollection in later employment, and that Cray had not shown misuse of specific secrets that met the legal test for protection.
- The copyright infringement claim, described as an add-on to the confidence case, did not succeed as a practical route to relief once the court rejected the attempt to treat the underlying technical content as confidential on the evidence.
- The abandoned claims (civil conspiracy and database right) did not affect the outcome.

## Legal Principles

- A claimant for breach of confidence must show: (i) information with the necessary quality of confidence, (ii) circumstances importing an obligation of confidence, and (iii) unauthorised use or disclosure causing detriment.
- Information is unlikely to satisfy the “quality of confidence” requirement where it is common practice within the relevant industry, is already in published sources, or can be worked out by those skilled in the field from standard references and ordinary practice.
- Whether an obligation of confidence exists depends on an objective assessment of the relationship and surrounding facts; the absence of clear confidentiality terms, warnings, markings, and access limits weighs against finding such an obligation.
- Employees are generally free to use their accumulated skill and experience, including what they can remember, after leaving employment; protection is reserved for genuinely secret information that is clearly identified and kept as such.
- Copyright in documents does not normally provide a substitute form of control over technical information that is not confidential in substance; it cannot be used to obtain, in effect, exclusive rights over public or standard industry know-how.

## Conclusion

Cray Valley Ltd v Deltech Europe Ltd illustrates that resin manufacturing “recipes” and related production directions will not be protected as confidential where they reflect common industry practice, are available from published sources, and were not subject to clear confidentiality obligations or practical secrecy measures, and that an added copyright claim will not, without more, fill the gap left by a failed breach-of-confidence case.


Cray Valley Ltd. v. Deltech Europe Ltd., [2003] EWHC 728 (Ch) (2003)