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Director misappropriated former employer's data, court rules

'Classic springboard operation'

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The founder of a conferencing business breached his former employer's database rights and misappropriated its confidential information, the High Court has said.

Richard Braachi also attempted to 'pass off' his new business as the established company he had just left, the Court ruled.

The High Court found that it was true that when he was an employee of First Conferences, Braachi copied large parts of its database and used them when setting up his own rival conferencing firm. "This is a classic springboard operation," said Mr Justice Peter Smith in his ruling.

Braachi worked for First Conferences between 2006 and 2008. Around 45% of that company's income came from the EyeforPharma conferences run by First Conferences.

First Conferences claimed that Braachi had taken vital sales and contact information from its databases and used them to organise a rival conference. It also claimed that he approached speakers for those conferences suggesting that the event he was organising was a continuation of First Conferences' work.

The High Court agreed.

"It is difficult to see a more blatant example of the Defendants passing off their business as that of the [First Conferences]," said the ruling. "He suggested wrongly to the proposed speakers that he was inviting them to participate again by agreeing to speak at the conference he was organising for September/October 2009."

"In so acting it is clear he was attempting to damage the Claimants' conferences by 'poaching' their speakers before they had contacted them. That of itself is not actionable per se. However the way he did it was by suggesting that his conference was a follow up of [First Conferences's] previous one," it said.

"It is clear that the First Defendant tried to destroy the Claimants proposed conferences and in so doing attempted to mislead their speakers," said the ruling.

The Court found that in copying the contacts and sales information to his private email account and using them as the basis of his own business, Braachi broke the UK laws implementing the European Union's Database Directive.

"The information extracted by [Braachi] from their database is the large number of customer contacts, the sales information and the other material," said the ruling. "This is a case of extraction and in my view a breach of article 16(1) of the Copyright and Rights in Database Regulations 1997. It is clear that the database was created using substantial investment in obtaining, verifying or presenting its contents."

The Regulations grant databases special rights over and above any copyright that may apply to them. The Regulations were designed to protect businesses which invest resources into the databases that can form the basis of e-commerce.

Protection exists for databases where a company has made a "substantial investment" in obtaining, verifying or presenting the information contained in it.

Mr Justice Peter Smith also said that Braachi's actions involved the unlawful taking of confidential information.

"It is plain… that [Braachi] has misappropriated [First Conferences's] confidential information in order to generate a springboard to give the [Braachi's new company] an unfair advantage over the [First Conferences]," said the judge in his ruling.

Braachi was also said by the Court to have transferred domain name theforecaster.com from First Conferences to his new business without the company's permission. The Court found that this was another example of passing off the new company as the old.

The ruling can be read here.

Copyright © 2009, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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