Part IV - Intellectual Property Rights & Post Employment or Contractual Relationships

With or without restrictive covenants in place against the former employee or the consultant, some intellectual property rights may play in part in limiting the activities of ex-employees and consultants in a measured way. Loosely speaking, IP rights owned by a business will protect against blatant acts of copying in their various forms. It must said therefore that relying on intellectual property rights is a distant second place to having the terms of the post-contractual relationship agreed at the outset.

Passing off the previous employer’s business may be available where there is a suggestion of a connection between the ex-employee’s new business and the former employers. Passing off is a flexible form of protection that relies on the existence of a misrepresentation by a business that suggests that there is some form of connection between the ex-employee’s new business and their former employers, where in fact none exists. It applies equally to business selling products and to those selling services. Where the employer’s business has the requisite level of goodwill in England a claim may lie against the former employee or consultant. Instances of passing off may be a similarity between competing websites; creation of near identical domain names offering similar services; uses of unregistered trade marks, which may include similar colouring and shapes of distinctive packaging of products; and representations that the product or services are the same as the former employers’.

Trade Marks protect more than just business trading names. Registered trade mark protection of the trade names – i.e. product names and branded names of services - may go some distance towards preserving the distinctiveness of the businesses external appearance to the market, and similar naming of products and services.

Trade Secrets remain one of the exceptions to employees’ knowledge skill and expertise that may not be utilised by them in their new position. It is trite to say that customer lists, manufacturing processes, business information and soliciting the customers of the employer while still employed are actionable. Memorising lists of names is actionable but not recalling names of customers is not. By internally promoting internally the importance of information to the business, an argument is created for use at a later time. Many businesses have adopted email use and internet polices and fraud policies. It may be appropriate for the business, depending on the importance of its know how, to implement an Information Management Policy, set out procedures to deal with and record disclosures of information to third parties

Copyright – Recent case law suggests that claims that the look and feel of computer software has been copied are doomed to failure except in the most narrow circumstances. Courts have persistently refused to enforce copying on an abstract level, as copyright is a qualified monopoly and not provide protection for representations of the same type of object that have not been copied. Similarity in appearance in itself is no guarantee of success in a copyright infringement action where there has been no literal copying.

Similar concepts will apply to other materials that appear to have copied in the abstract sense. The euphuism usually used is that material were used for inspiration.

Of course, assuming that the appropriation of materials is blatant and obvious injunctions and other relief will be available for a wider range of actions. Indeed, some of these causes of action will apply to instances of industrial espionage with the right factual matrix, and the torts of conversion or detinue are worthy of consideration in order to provide recourse against thefts of information and trade secrets.