For your eyes only - the use and abuse of confidential information

Key Points:

The duty to keep trade secrets confidential can extend well beyond the traditional employer/employee relationship to include third party contractors.

In Force India Formula One Team Ltd v 1 Malaysia Racing Team SDN BHD & Ors [2012] EWHC 616 (Ch) the English High Court ordered Italian aerodynamics company Aerolab to pay €25,000 to the Force India Formula 1 team for misuse of confidential information relating to the design of a half-size wind tunnel model of a Formula 1 racing car.

While the value of the misused confidential information was not significant, the decision serves as a timely reminder of the importance of always ensuring that appropriate processes are in place to protect what can amount to very valuable information.

The incidents of misuse

In 2010 Aerolab was retained by the Team Lotus Formula 1 team (now known as Caterham), soon after having already undertaken similar work for Force India. Force India alleged that Aerolab's work for Lotus in developing some parts of the Lotus team car had involved the use of Force India confidential information – information that had been gathered during Force India's own earlier works with Aerolab.

At no point did Aerolab dispute that its employees had engaged in the copying of some computer files containing Force India designs in the development of parts for Lotus. There was however a dispute as to both the exact nature and extent of the...