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Oral confidentiality agreement with consultant held binding

For several years, a consultant helped Vestergaard Frandsen A/S (“VF”), a Danish company, develop an insecticide-treated mosquito net. At one point, two VF employees quit to start Bestnet Europe, which competed with Vestergaard. The consultant stopped working with VF and began to work with Bestnet.

VF sued Bestnet in several different countries. In a 700-plus paragraph opinion, a UK judge — quoting some pretty-damning email exchanges between the consultant and VF’s director of development — concluded that the consultant had entered into a binding oral confidentiality agreement with VF.

The judge directed further argument on the question of whether to grant an injunction, however, saying that “the misuse of VF’s trade secrets I have found was merely the starting point for a substantial program of further development which resulted in a formulation which is different from any of VF’s recipes in a number of respects …. In addition, a substantial period of time has elapsed since then.” Vestergaard Frandsen A/S v. BestNet Europe Ltd., No. HC06C04408, [2009] EWHC 657 (Ch) para. 672.

Other comments on this case: Wombell Carlyle; Shepherd & Wedderburn.