It is common practice in the food industry for suppliers to provide technical and product information to customers so they can satisfy food safety issues and ensure the product and its labelling are in compliance with food legislation and regulations. But what happens if the customer uses this information to produce their own, competing, product?
In a recent High Court case on this very issue, the Court granted a year-long injunction preventing fresh foods provider Bakkavor from putting edible infused oils on the market where the manufacture of those oils was enabled or assisted by its use of technical and product information obtained from its supplier – big food business, Kerry. Kerry had supplied this information to Bakkavor solely for safety and regulatory purposes, not for Bakkavor to develop its own competing edible infused oils.
The case demonstrates that, where a supplier provides information to its customer for a particular purpose, this does not automatically give the customer the right to use such information however they want. The Court decided that a reasonable person would realise - particularly in the food industry - that the information provided by Kerry for safety and regulatory purposes only and was confidential. It was obvious that this was the case because:
- It had the necessary quality of confidence about it – someone wishing to compete with Kerry's products, but lacking the information Bakkavor had as to how Kerry manufactured the infused oils, would not be able to discover Kerry's methods without substantial work or special labours; and
- Kerry supplied the information in circumstances which meant there was an obligation of confidence on Bakkavor. The Court took into account that it was understood in the food industry that such information should not be used by the recipient in other ways and was believed to be confidential. This was so even in circumstances where the product could be replicated by reverse engineering, if it would involve a significant amount of work.
The Court also looked at the use Bakkavor made of the information to see whether it had been misused. Clearly, Bakkavor had used the confidential information and communicated it to third parties to assist in its development of a competing product - this amounted to misuse. The Court said that it did not matter that Bakkavor may not have been trying to replicate Kerry's process for manufacturing the infused oils – the fact was that it made extensive use of the confidential information when developing its own process.
However, the Court was not willing to grant a permanent injunction against Bakkavor preventing further misuse as this would put Kerry in a better position than if there had been no misuse at all. The Court said that the confidentiality in Kerry's information was time-limited as, eventually, Bakkavor would have probably been able to replicate Kerry's oils using information in the public domain. Even without the confidential information, Bakkavor would be aware of what Kerry's oils looked and tasted like and what ingredients were on its labels, enabling it to reinvent Kerry's production techniques.
Accordingly, the Court granted a "springboard" injunction, limited to the time it considered it would take someone starting from public domain sources to reverse engineer or compile Kerry's confidential information. The Court estimated that Bakkavor had gained a head start of a year by misusing Kerry's confidential information and, therefore, decided it should be prevented for this period from putting on the market any infused oil the manufacture of which was enabled or assisted by the use Kerry's confidential information.
Where a customer misuses confidential information as a springboard to gain a head start in developing a competing product, the Court is likely to grant an injunction for a limited period to prevent them having any benefit from that head start. This is certainly worth bearing in mind next time you have access to confidential supplier information or you believe that your information has been misused by a customer.