Recent court decisions have cast further light on the extent to which employers can use claims of database right infringement and breach of confidence to restrain employees from making unauthorised use of their business information.
The High Court’s decision in Crowson Fabrics Limited v Rider et al exemplifies the protection that the Copyright and Rights in Databases Regulations 1997 (the Regulations) can offer to employers where business documents are copied by employees and used without consent upon termination.
Former employees (X and Y) of Crowson had, during their employment, copied confidential documents contained customer and supplier details for use in setting up a rival business (Z). The High Court held that the Regulations afforded database rights in the copied documents and that Crowson was the owner of these rights. For there to be an infringement of database rights there must be extraction or reutilisation of a substantial part of the contents of the database, without the owner’s consent (Reg. 16(1)). The judge held that the act of transferring the documents to Z’s computer constituted extraction; the use subsequently made of the information was irrelevant.
In Crowson, the copied information was not deemed to be sufficiently confidential to lead to a finding of breach of confidence against X and Y. The information was either in the public domain or within X and Y’s own knowledge. However, in Sectrack NV v Satamatics Limited et al (a decision to continue an interim injunction given the day before the Crowson judgment) the judge felt that, where employers restricted the dissemination of business information, so that it was “clothed with confidentiality” and was not publicly available, the employer may still be able to claim for breach of confidence.