Who Should Win? The Chicken Or The Prince? A Lesson In Protecting Your Confidential Information

The recent decision of the Court of Appeal in Generics (UK) Ltd v Yeda Research & Development Co Ltd,1gives rise to important issues for in-house legal professionals to consider when they are seeking to take employment with a rival to their present employer, especially when there is ongoing or imminent litigation between the two competitors. The Court has issued guidance that clarifies whether the common law standard for employees differs when they have a legal or quasi legal position in house: Patent Attorneys are held to the same standard as solicitors, but in house lawyers may be held to a lower standard than those in private practice.

Legal Background

Confidential information handled by employees necessarily needs protection, but it becomes more difficult once employees have left their positions to protect it, if held in their personal knowledge. There are two separate approaches that courts have taken when analysing the onus of responsibility owed by a former employee to their previous employer regarding confidential information. If there are no contractual provisions restraining ex-employees on confidentiality matters, then for general employees the case of Faccenda Chicken v Fowler2provides guidance. Following that case the only information that will be protected once the employment relationship has terminated is a trade secret, or information which is of a sufficiently high degree of confidentiality as to amount to one. However, there is a more onerous requirement on solicitors who have previously worked for a client and subsequently represent a new client with adverse interests to the former client: In Prince Jefri Bolkiah v KPMG3the court held that a solicitor (or their equivalent, such as accountants or patent attorneys) who are in possession of a client's confidential information owes an unqualified duty to preserve the confidentiality of information imparted during that relationship. As a result of such a duty, the solicitor must not be permitted to act against their previous client's interests unless they can establish that there is no risk of the confidential information being disclosed to third parties.

It is therefore an interesting question as to whether an in-house solicitor (or patent attorney) is subject to the general employee confidentiality requirements as laid out in Faccenda or the more onerous requirement that is equated to private practice solicitors in Prince Jefri Bolkiah. In Generics we may have the answer from the Court of Appeal

The Facts

From 2008 to January 2011 an in-house patent attorney was employed by Yeda, responsible for oppositions in the European...