The claimant companies (E) alleged breach of contract, breach of confidence and passing off by defendant companies (S). E had supplied S additives for use in the manufacture of thin film plastic products. The relationship between the parties was regulated by successive agreements commencing with a "license agreement" and culminating in a "manufacturing and know how licence with incidental trade mark rights" and an appended confidentiality agreement.

 

S created their own additive that was not an exact copy of one of E's additives, but which E argued was nevertheless unlawful. E relied on Seager v Copydex Ltd (No. 1) [1967] W.L.R. 923 and submitted that their product was capable of protection and not merely the confidential constituent parts that made it up; that it was not open to S to analyse their product in an attempt to find the material that was in the public domain and assert that it was free to use the information it had thus acquired; and that E had provided their additive in confidence and that product and its provision was private confidential information that S could not use.

 

S argued that the contents of E's additive and manufacturing processes were in the public domain and even if they had achieved those by analysing E's products (which E denied) there was no breach of confidence if the presence of those material ingredients and processes was in the public domain.

 

HELD: It was necessary to look at the product and its constituent parts and determine whether the product had a secret or confidential nature of itself by virtue of the work that had been done on it, Franklin v Giddins [1978] QdR 72 distinguished and Lancashire Fires Ltd v SA Lyons & Co Ltd (1997) IRLE 113 explained.

 

The existence of E's products, that they were successful and that their purpose was to encourage the degradation of plastic products was in the public. It was clear that the secret, if any, of E's products lay in how they were made up. What Lord Denning was saying in Seager v Copydex Ltd (No. 1) [1967] W.L.R. 823 was that a recipient of mixed public and private information should take care only to use the public information and if the recipient used the private information he could only do so on pain of payment, Seager considered.

 

A thing did not become confidential merely because it was supplied confidentially. E itself proclaimed on its website what type the constituent parts of its products were and, equally, if there was no other material in the public domain that pointed to specific constituents, that could not be said to be private information.

 

Absent a contractual provision, S could not be prevented, even by analysis of E's product, from using information that was in the public domain, which they acquired as a result of that exercise. It was open to a claimant to allege that there were secrets over and beyond the public information that ought to be protected, but, equally, it was open to a defendant to argue that it had not used that material and had only used public domain material, Mustad v Dosen [1964] 1 W.L.R 109 (Note) considered.

On an assessment of the evidence, E's claims failed except that (i) there had been a breach of requirement in the licence that upon termination of the agreement S were to cease holding themselves out as licensees of the trade marks and cease manufacturing and selling the relevant products; (ii) E was entitled to nominal damages for breach of the bearing any of the trade marks upon termination of the agreement.