Trade Secrets – short video on the impact of the new UK Regulations in IP and employment contexts

Here’s a short video made for Practical Law, in which Herbert Smith Freehills IP and Employment Professional Support Consultants, Rachel Montagnon and Anna Henderson, discuss the impact of the UK’s recent Trade Secrets (Enforcement etc) Regulations 2018 and practical approaches to protecting confidential information and trade secrets.

Key issues discussed are:

  • The new, common definition of a trade secret
  • What constitutes lawful and unlawful acquisition, use and disclosure of a trade secret
  • Practical steps businesses can take to protect confidential information
  • Considerations in relation to whistleblowing
  • Guidance around reverse engineering
  • Bringing a claim under the regulations
  • Remedies and provision for damages.

These new UK trade secrets regulations have implemented the Trade Secrets Directive ((EU) 2016/943) and came into force on 9 June 2018.  Also on our IP Notes blog, see our Milan office’s post on the Italian implementation of this Directive and our previous posting on implementation of the Directive in the UK.

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Filed under Jurisdiction: UK, Protection of business interests (including restrictive covenants and confidential information)

UK: Court of Appeal ruling on scope of protection for internal investigations

The Court of Appeal has handed down its eagerly awaited decision in The Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Ltd. The High Court had found that notes of interviews with employees were not protected by litigation privilege, given that the employer’s purpose was to investigate allegations made by a whistleblower and, in its view, this failed the dominant purpose test. Employers will welcome the Court of Appeal ruling that the purpose of investigating allegations made by a whistleblower was part and parcel of preventing or defending litigation and therefore sufficient to meet the dominant purpose test. It also considered that documents prepared in order to avoid or settle contemplated litigation were covered by litigation privilege.

In relation to legal advice privilege, the Court of Appeal considered itself bound by Three Rivers No 5 to find that the privilege is limited to communications between a lawyer and those tasked with seeking and receiving advice on behalf of the client company. However, the court said that, if it had been open to it to depart from Three Rivers No 5, it would have been in favour of doing so – but this is a matter for the Supreme Court.

The decision is considered further in our litigation blog post.

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Filed under Employment-related claims- procedure and form, Jurisdiction: UK

UK: No privilege for advice on how to “cloak” dismissal on basis of discrimination as dismissal for redundancy

The Employment Appeal Tribunal in X v Y Ltd has ruled that an email containing advice from an in-house lawyer was not protected by privilege due to the “iniquity principle”, as there was a strong prima facie case that it advised on how to “cloak” as dismissal for redundancy the claimant’s dismissal resulting from allegations of disability discrimination and victimisation.  Relevant passages in the claimant’s claim should therefore not have been struck out.

It is well established that the iniquity principle prevents the application of legal professional privilege where advice is given for the purpose of facilitating crime or fraud. Fraud for these purposes has been interpreted to include “sharp practice”, or conduct which commercial people would say was a fraud, or which the law treats as entirely contrary to public policy. It would not normally include conduct which merely amounts to a civil wrong, ie a tort, nor does it cover conduct which amounts to a breach of fundamental human rights.

In the present case, an employee who had raised allegations of disability discrimination was made redundant as part of a wider redundancy exercise amongst the legal department.  The EAT found on the facts that the advice in question went beyond pointing out the risk of claims if the claimant were selected for redundancy, and (on a strong prima facie case) was to be interpreted as advising that the genuine redundancy exercise could be used as a cloak to dismiss the claimant to avoid his continuing complaints and difficulties with his employment which he alleged were related to his disability.  As such, the advice was an attempt to deceive both the claimant and, ultimately, an employment tribunal. Continue reading

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Filed under Employment-related claims- procedure and form, Jurisdiction: UK, Redundancy, Workplace culture, diversity and discrimination (including bullying and harassment)

Recruitment and protection of talent: a boardroom issue for pharma

Our article Recruitment and protection of talent: a boardroom issue for pharma is available on our pharma hub here. Technological advancement is key amongst the forces driving change in the pharmaceutical healthcare sectors, with businesses increasingly partnering with non-traditional players such as tech giants, agile biotech start-ups and insurers. In this article we explore how the industry’s increasing focus on tech, including AI, will give rise to a corresponding need to find innovative solutions to attract, retain and incentivise talent experienced in those areas, given the relatively small and highly mobile pool of potential recruits. We also consider the scope for businesses to protect their valuable knowhow and intellectual property from potential threats from ex-employees. Given the critical importance of talent to the pharma industry, we highlight issues that should be factored into strategic decision-making by the board, influencing choices on collaboration, acquisition and business location.

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Filed under International mobility (including secondments, migrant workers, territorial jurisdiction), Jurisdiction: Asia, Jurisdiction: Australia, Jurisdiction: Cross-border, Jurisdiction: France, Jurisdiction: Germany, Jurisdiction: Spain, Jurisdiction: UK, Protection of business interests (including restrictive covenants and confidential information), Remuneration (including bonus and incentive plans)

UK: Government’s white paper on future relationship and technical notes in the event of a Brexit no-deal

Over the summer the Government published its white paper on the future UK-EU relationship post transitional period, covering a wide range of issues including immigration and employment. On immigration, the Government stated that it recognises the importance of moving and attracting talent across Europe to support the global operations of UK firms and global investors. It suggested that business visits would continue to be permitted to and from the EU under new arrangements but for paid work in only a limited number of circumstances (perhaps in line with the current business visitor rules for non-EEA nationals). The paper also suggested permitting intra-corporate transfers across Europe, based on existing arrangements with other non-EU countries. Finally, the Government made clear that it intends to seek the secure onward movement opportunities for UK nationals in the EU who are covered by the citizens’ rights part of the withdrawal agreement, should they wish to change their member state of residence in the future.  There is little further detail on how migration arrangements could work after Brexit but a further white paper on immigration has been promised this autumn. Continue reading

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Filed under Data protection and privacy, International mobility (including secondments, migrant workers, territorial jurisdiction), Jurisdiction: UK

UK: HMRC update on national minimum wage liabilities following a TUPE transfer

HMRC has issued an update confirming that, with effect from 2 July 2018, where there has been a TUPE transfer of employees, all national minimum wage  liabilities, including the full penalty amount, will now be enforced against the transferee employer, including penalties triggered by pre-transfer arrears. This highlights the importance of transferees obtaining an indemnity from the transferor to cover these liabilities where possible.

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Filed under Business sales/transfers, Jurisdiction: UK, Remuneration (including bonus and incentive plans)

UK: employees protected against victimisation, despite ulterior motive for alleging discrimination, if acted honestly

The EAT in Saad v Southampton University Hospitals NHS Trust has held that an employee was able to claim victimisation where subjected to detriment for alleging discrimination even though the allegation was made for an ulterior motive (to deflect criticism of his performance). The requirement for the allegation to be made “in good faith” simply means that the employee must have acted honestly, ie subjectively believed in what they said (even if the allegation is later found to be false).

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Filed under Jurisdiction: UK, Workplace culture, diversity and discrimination (including bullying and harassment)

UK: Employers may need to go further than strict compliance with the statutory right to a companion to ensure fairness

Employees have a statutory right to be accompanied to a disciplinary or grievance hearing by their chosen companion and, if that companion is unavailable on the date set, to have the hearing postponed by 5 working days. A failure to comply with this right is likely to render a dismissal procedurally unfair in most cases, but the corollary is not true. In Talon Engineering Ltd v Smith, a dismissal was found to be procedurally unfair where the employer refused to postpone the hearing by 10 days to allow the chosen companion to attend. The tribunal had not erred in concluding that the employer had acted unreasonably in refusing the request for a short postponement based on genuine unavailability, particularly given the employees’ 21 years’ unblemished service.

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Filed under Jurisdiction: UK, Termination of employment

UK: new resources for employers

  • HMRC has created a new online guide on statutory sick pay.
  • Public Health England and Business in the Community have published a new toolkit to help employers support workers affected by domestic abuse.
  • Acas has published new guidance on job references.

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Filed under Jurisdiction: UK, Resources

UK: parliamentary committee inquiry into enforcement of the Equality Act; report into age discrimination

The House of Commons Women and Equalities Committee has launched an inquiry into the enforcement of the Equality Act 2010 and the effectiveness of the EHRC, with submissions sought by 5 October 2018.

Lack of enforcement was one of the themes highlighted in the Committee’s report into age discrimination published in July. The Committee recommended that larger employers should be required to publish the age profile of their workforce and that all jobs should be available on flexible terms unless an employer can demonstrate an immediate and continuing business case against doing so. It also proposed a statutory entitlement to five days’ paid carer’s leave, and four weeks’ unpaid leave.  The Government is yet to respond.

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Filed under Jurisdiction: UK, Workplace culture, diversity and discrimination (including bullying and harassment)