## Facts

- A manufacturer of long-lasting insecticidal mosquito nets developed proprietary “recipes” and techniques for incorporating insecticide and additives into polyethylene yarn; the data were kept in a confidential internal database and treated as trade secrets.
- Two employees (including Trine Angeline Sig) worked for the manufacturer under contracts containing confidentiality obligations; a scientist-consultant (Dr. Ole Skovmand) worked with the manufacturer without a comparable contractual confidentiality clause.
- After leaving, Sig and others formed a competing venture, later continued through an English company, to develop and sell a competing net product (“Netprotect”).
- The competing product was developed using detailed data taken from the manufacturer’s confidential database.
- The trial court found two decisive facts about Sig: (1) she never acquired the relevant trade-secret information, and (2) she was honestly unaware (until some point during the litigation) that the competing product had been developed using the manufacturer’s trade secrets.
- Despite those findings, the trial court imposed liability on Sig; the intermediate appellate court reversed as to Sig; the manufacturer appealed to the U.K. Supreme Court seeking to reinstate Sig’s personal liability.

## Issues

1. Whether an individual can be liable in equity for breach of confidence when she neither possessed the confidential information nor knew it was being misused by others.
2. Whether post-employment contractual confidentiality obligations can impose liability for “use” of trade secrets the employee never learned and did not know were being used.
3. Whether joint liability based on “common design” can attach to a director/co-founder of a competing business absent knowledge that the business’s acts involved misuse of confidential information.

## Decision

- The Supreme Court unanimously dismissed the manufacturer’s appeal and held Sig was not personally liable.
- Breach of confidence is rooted in conscience; liability requires that the defendant either possessed information she agreed or knew was confidential, or knowingly participated in conduct involving misuse of such information.
- On the binding findings that Sig never had the trade secrets and was honestly unaware of their misuse, her conscience was not engaged and equitable liability could not be established.
- Contract-based liability failed because Sig could not “use” confidential information she never acquired and did not know was being used; no implied term extended liability to no-fault misuse by others.
- Common-design liability failed because participation in a common design to commit a wrong requires knowledge of the essential facts that make the conduct wrongful; Sig lacked that knowledge.

## Legal Principles

- Equitable breach of confidence requires knowledge: liability arises only where the defendant (a) possesses confidential information knowing (or having agreed) it is confidential, or (b) knowingly participates in misuse of confidential information by others.
- Mere involvement in a competing business that, unknown to the individual, uses a former employer’s trade secrets is insufficient to fix personal liability for breach of confidence.
- Post-employment confidentiality clauses do not impose liability for misuse of trade secrets the former employee never learned and did not knowingly exploit.
- Joint liability by common design for misuse of confidential information requires knowledge of the facts that render the conduct a misuse; honest ignorance defeats that route to liability.

## Conclusion

The Supreme Court held that an ex-employee who neither acquired the trade secrets nor knew they were being misused could not be personally liable for breach of confidence, for breach of her confidentiality contract, or as a joint tortfeasor by common design.


Vestergaard Frandsen A/S v. Bestnet Europe Ltd, [2013] UKSC 31 (U.K. 2013)