Inadvertence Defence Defeats Trade Secrets Claim

During the course of an employment, it is common for employees to become aware of the ‘trade secrets’ of their employer’s business. If they subsequently use this knowledge for their own gain, they can find themselves facing a claim for damages resulting from the breach of confidence.



To prove such a claim, the employer must show that the employee acquired the confidential information from it and made use of it.



In a recent case, argued all the way to the Supreme Court, an employer failed to win damages from a former employee who, together with a former consultant to the company, had set up a competing business.



The former employee could not be shown to have acquired the confidential information and could not be shown to have been aware that the products created by her new business made use of her former employer’s confidential information. She argued that her use of the confidential information was inadvertent.



In general, the law advocates the principle of free trade and supports those who wish to use their knowledge and skills to build businesses. The burden of proof in cases such as this is therefore high.



The employer could not prove that the use of its trade secrets was by design, not inadvertence, and therefore lost its case.