Title: Remedies Available in UK Common Law for Employee

Misappropriation of Trade Secrets

Introduction:

Trade secrets are valuable assets for businesses and play a crucial role in
maintaining a competitive edge. When an employee breaches their duty of
confidentiality and sells trade secrets to a rival company, it can cause
significant harm to the employer. In the United Kingdom, the law provides
remedies to employers who suffer from such employee misconduct. This legal
piece will explore the remedies available under UK Common Law in cases
where an employee sells trade secrets to another rival company. Relevant case
laws will be examined to illustrate the application of these remedies.

I. Breach of Contract:

Damages: Employers can seek compensatory damages for the breach of the
employment contract. This includes the loss suffered as a direct result of the
employee's action, such as financial losses incurred due to the disclosure of
trade secrets. In the case of Faccenda Chicken Ltd v. Fowler [1987] Ch 117,
the court awarded damages against an employee who disclosed confidential
information, including the identities of customers, to a competitor.

Injunction: Employers may also seek an injunction to prevent further

disclosure or use of the trade secrets. This can be a prohibitory injunction,
restraining the employee from disclosing or using the information, or a
mandatory injunction, requiring the return of any stolen trade secrets. The
case of Intergraph Ltd v. Autodesk Ltd [2014] EWHC 3972 (Ch) saw the
court grant an interim injunction to prevent an employee from using or
disclosing confidential information acquired during employment.
II. Breach of Fiduciary Duty:

Account of Profits: Where an employee breaches their fiduciary duty by selling

trade secrets to a rival company, the employer may seek an account of profits.
This remedy allows the employer to claim the profits obtained by the employee
as a result of the unauthorized use or disclosure of trade secrets. In the case
of Faccenda Chicken Ltd v. Fowler [1987] Ch 117, the court ordered the
employee to account for the profits generated from the misuse of confidential
information.

III. Breach of Confidence:

Equitable Damages: In addition to seeking damages for breach of contract,

employers may also claim equitable damages for the breach of confidence.
These damages aim to compensate for the loss suffered due to the
unauthorized use or disclosure of trade secrets. In the case of Coco v. A. N.
Clark (Engineers) Ltd. [1969] RPC 41, the court awarded equitable damages
to the employer for the unauthorized use of confidential drawings.

Account of Profits: Similar to the breach of fiduciary duty, employers can seek
an account of profits when an employee sells trade secrets in breach of
confidence. The case of Seager v. Copydex Ltd. [1967] 1 WLR 923 involved
an employee disclosing trade secrets to a competitor, and the court granted
an account of profits against the employee.

Conclusion:

In cases where an employee sells trade secrets to another rival company, UK

Common Law offers several remedies to the affected employer. These remedies
include damages, injunctions, accounts of profits, and equitable damages.
Employers should seek legal advice and explore the appropriate remedies
based on the case’s specific circumstances. The cited case laws demonstrate
the application of these remedies in practice, providing guidance to employers
and their legal representatives when faced with employee misappropriation of
trade secrets.