Tuesday, 30 December 2014

What an employee can and cannot do when no longer on your payroll

Jane Lambert

While an employee remains on your payroll he or she is bound by an implied obligation of good faith and fidelity to do his or her best for you. He or she is not allowed to discuss your affairs in public or work for a competitor. As Mr Justice Laddie said in Ocular Sciences Ltd v Aspect Vision Care Ltd (No.2) [1997] RPC 289, [1996] EWHC Patents 1, (1997) 20(3) IPD 20022, that has nothing to do with the law of confidence or trade secrecy.

However, the employee is not your slave. He or she is entitled to seek work elsewhere or even set himself or herself up in business in competition with you. If the employee leaves your employment he or she is likely to use skills, knowledge and experience gained in your employment. There is nothing wrong with that even if you have spent time and money training the employee. After all, you see nothing wring in recruiting someone who has been trained by somebody else do you. Nor is it disloyal of the employee to attend interviews or take preliminary steps to set up a competing business so long as he or she does that in his or her own time or with your permission. If he or she is any good the employee is likely to have made some contacts while working for you. There is no reason why he or she can't stay in touch and deal with those contacts after leaving your employment.

But there are limits. Just as an employee can't steal from you neither can he or she run off with your customer list or use or disclose secret and sensitive technical or commercial information relating to your business that he or she acquired in confidence. The law of confidence applies to a  departing employee just as it would to anyone else and if there is any danger of his or her breaching an obligation of confidence you can enforce it against the employee just as you could against anyone else.

However, confidential information does not usually stay confidential for ever. The time eventually comes when it becomes common knowledge in the industry. The law deals with that by allowing employers to insert garden leave or other non-compete clauses into their employees' contracts of employment to cover the period in which they are vulnerable. But these can't go on for ever or even for an excessive period. Such a clause restricts freedom to trade and it is a fundamental principle of English law that contracts in restraint of trade are not allowed unless they are reasonable for the protection of the parties and in the public interest. The recent decision of the Court of Appeal in Sunrise Brokers LLP v Rodgers [2014] EWCA Civ 1373, [2014] WLR(D) 442 is an example of a case in which such restrictopm were held to be reasonable and were enforced by injunction.

So what should an employer do? First he or she should take professional advice on the drafting or enforcing of garden leave or other provisions before a dispute arises. We can help with that and our clerks will be glad to put you in touch with counsel specializing in employment law if you call them on 020 7404 4242 or get in touch through their contact form. Secondly, you can remind employees of the importance of keeping your business and technical secrets secret and of their obligations of confidence in the course of their employment through training sessions, staff manuals, regular circulars and otherwise. Thirdly, if you have reason to believe that an employee is about to breach his or her obligation of confidence you have to act quickly. Once the information has been used or disclosed there is no point in seeking an injunction to restrain such use or disclosure. You may need to apply for a "without notice" injunction immediately and then follow it up with an application on notice as soon as possible afterwards. It is all a bit hectic and I am afraid it can be expensive but then doing nothing until it is too late can cost you a hell of a lot more.

If you need emergency advice or representation you can come to us through a solicitor or you can come to us direct under the public or licensed access rules. Once the emergency is over we can help you build a legal team. If you want to discuss this article or restraints of trade generally, call me on 020 7404 5252 or use my contact form.

Thursday, 18 December 2014

Brilliant Beckton

In an email to the Intellectual Property Bar Association, our Chair Henry Carr QC reported that he and a party of other IP lawyers and patent attorneys visited 1000 Dockland Road, Royal Albert Dock, London E16 2QU last month. The reason for their visit is that the site has been identified as a possible venue for the London section of the central division of the Court of First Instance of the Unified Patent Court.

The estate agents' particulars sound idyllic:
  • "Fully accessible raised floor
  • Suspended ceiling with 1.5m planning grid
  • Cat 5 lighting
  • Excellent natural light
  • Views over Royal Albert Dock
  • Four pipe fan coil air conditioning
  • 7 underground car parking spaces and bicycle storage
  • 3 passenger lifts
  • Five-storey winter garden and building reception
  • On site coffee shop, cafeteria and news agents."!
Henry's note is also pretty encouraging:
"1. The facility is, potentially, very good for a European Institution. The space is large and will allow about five big courts as well as meeting rooms. Proper IT can be installed. There is a good, large canteen on the ground floor and catering can be brought to the meeting rooms.
2. There was slight aircraft noise at the front where some meeting rooms would be, but it was not intrusive. There was no noise at the back where the courts would be.
3. The journey took 40 minutes and involved one change. It is not ideal, but bearable. This situation will change in early 2018 with Crossrail as there is a station close to the site.
4. As well as direct flights, there are flights to City Airport from Amsterdam and Zurich, which are hubs for the rest of the world."
In my view, the location  could not be better. Not only is it close to London City Airport and the Crossrail line it is linked by dual carriageway to the M11 which leads to the M25 making it accessible to all parts of the country.  The building overlooks a marina. It is close to Beckton District Park. There is plenty of hotel accommodation nearby for parties, witnesses and legal representatives to suit all pockets. The building is in an attractive position overlooking a marina and not far from Beckton District Park.

Not everyone likes the proposed site. Henry reports that AIPPI in particular wants a central London location. That would be much more convenient for practitioners in central London but this is a court for most of the EU with parties and lawyers coming from the whole of the UK, the rest of Europe and around the world. Our needs have to be considered too and for us Beckton is brilliant.

Tuesday, 9 December 2014

WIPO Panellists Meeting

WIPO Head Office
Photo Wikipedia

Jane Lambert

Last Wednesday I attended the annual domain name panellists' meeting at the World Intellectual Property Organization ("WIPO")'s head office in Geneva. The meeting normally takes place on the third Monday of October but this year it was postponed until December.

The WIPO is one of five domain name dispute resolution service providers that have been approved by the Internet Corporation for Assigned Names and Numbers ("ICANN") for the resolution of disputes between trade mark owners and those who have registered domain names. The other service providers are the Arab Centre for Dispute Resolution, the Asian Domain Name Dispute Resolution Centre, the Czech Arbitration Court Arbitration Centre for Internet Disputes and the National Arbitration Forum.

By a memorandum of understanding between the US Department of Commerce and ICANN dated 25 Nov 1998 the US government entrusted the oversight and management of the domain name system to ICANN. By paragraph C-3 of the memorandum ICANN agreed to:
"Collaborate on the design, development, and testing of a plan for introduction of competition in domain name registration services, including:
a. Development of procedures to designate third parties to participate in tests conducted pursuant to this Agreement.
b. Development of an accreditation procedure for registrars and procedures that subject registrars to consistent requirements designed to promote a stable and robustly competitive DNS, as set forth in the Statement of Policy.
c. Identification of the software, databases, know-how, intellectual property, and other equipment necessary to implement the plan for competition."
The accreditation process devised by ICANN pursuant to paragraph C-3 (b) of the memorandum requires registrars of generic top level domain names to enter an accreditation agreement with ICANN. Under the latest version of the agreement domain name registrars have to incorporate into their agreements with those seeking to register domain names dispute resolution procedure provisions known as the Uniform Domain Name Dispute Resolution Policy ("UDRP"), Under the UDRP, domain name holders have to agree to refer any dispute between themselves and a trade mark owner to a "mandatory administrative proceeding" before a panellist appointed by an accredited dispute resolution service provider.

The cost of the proceeding is born entirely by the complainant unless the respondent opts for the appointment of a panellist of his choice to sit with a panellist of the complainant's choice and a presiding panellist appointed by the service provider, in which case the respondent pays the extra cost. The WIPO's fee for the appointment of a single panellist is US$1,500 of which $1,000 goes to the panellist and the balance to the WIPO Arbitration and Mediation Centre ("the Centre"). The fee for a 3-member panel is US$4,000 of which $1,500 goes to the presiding panellist, $750 to each co-panellist and $1,000 to the Centre. A decision is rendered within a matter of weeks. If the panel finds for the complainant, the registrar is obliged to transfer the domain name to the complainant after 10 working days unless the respondent challenges the order to transfer the domain name in the courts.

The matters that a complainant must prove are as follows:
(i)  the disputed domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
(ii) the respondent has no rights or legitimate interests in respect of the domain name; and
(iii) the domain name has been registered and is being used in bad faith.
In the administrative proceeding, the complainant must prove that each of these three elements are present.
There are in practice four probanda because the complainant has to prove that the domain name was registered and is being used in bad faith. Proceedings are almost always in writing though the panel has the power under rule 13 of the UDRP Rules to conduct a hearing in an exceptional matter.

There is no appeal against a panel's decision though a respondent may apply to a court for an order not to transfer the domain name. For that reason. complainants have to submit to the jurisdiction of the courts where the registrar is domiciled or those where the domain name appears to be domiciled when they bring a complaint (rule 3 (b) (xiii) of the Rules). Theoretically, the administrative proceeding is an interlocutory procedure that exists to assist the courts but in practice there are very few challenges to panels' decisions. Consequently, those decisions tend to be final.

I have been a panellist for the WIPO for just over 10 years. Most of the disputes that have come before me have been undefended.  Even in those uncontested cases panels have to examine the complaint and make sure that the three elements mentioned above have been established.  In several of the cases that have been contested I have served as a co-panellist on a 3-member panel.

The annual conference is one of the means by which the WIPO maintains the quality and consistency of its panellists' decisions. The conference begins at 09:00 and there is a full day of talks until 18:00 which are broken only by lunch in the WIPO canteen and short breaks for morning coffee and afternoon tea. Those talks discuss issues that have arisen in the course of the year. Most of them are given by members of the WIPO panel. The rest are by guest speakers or members of the Centre's staff. As at Chatham House, those attending the meeting are free to use any information that they may receive but they may not reveal the identity or affiliation of the speakers, or that of any other participant. The information that I have received in those talks has been useful not only in my work as a panellist but also whenever I have been asked to advise on a domain name dispute or a transaction involving domain names.

I enjoy the annual conferences very much. Over the years I have made the acquaintance of many of the panellists and several members of the WIPO's staff. It is always good to see them.  Although the focus is on domain name dispute resolution we touch on other aspects of WIPO's work. This year, for instance, we were shown WIPO's new conference hall which is capable of accommodating over 900 participants.

Should anyone wish to discuss this article or domain name matters in general, he or she may call me during office hours