27 April 2017 #Dispute Resolution
Misuse of confidential information can be restrained by an injunction. Where the breach has already occurred, the Court can grant a ‘springboard injunction’ to prevent the unfair exploitation of the confidential information in question. That was what happened in the recent case of Breakthrough Funding -v- Nearby Media.
The Claimant ran an annual ‘beer pong’ championship as a marketing tool to attract entrepreneurs. For those not familiar, beer pong is a drinking game based loosely on table tennis. The Claimant engaged the Defendant to help run its 2017 championship. The parties entered into an NDA and the Claimant provided the Defendant with various confidential documents. The relationship broke down in early 2017 and the Defendant took steps to set up a rival beer pong championship.
The Claimant sued and sought various injunctions, including a springboard injunction to stop the Defendant’s championship. The Claimant was concerned that the rival championship would not be run to a proper standard and would damage the Claimant’s reputation. Such damage to reputation would be difficult to quantify, meaning that damages would not be an adequate remedy and an injunction should be granted.
The Court agreed and ordered the injunctions. Although the Court must be cautious when granting springboard injunctions, the risk of damage to the Claimant was greater than the potential unfairness of wrongfully preventing the Defendant’s championship. In addition, the Defendant had the benefit of the Claimant’s undertaking to pay losses suffered by the Defendant if it later transpired that the injunction should not have been granted.
Unless it settles, the case will continue to a full hearing at which all issues will be finally determined. However, by obtaining a springboard injunction the Claimant has protected its reputation in the meantime.