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Database right and former employees

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03/02/2015

Medical Innovations Ltd v Eakins [1] was a summary judgment application in litigation between an employee and his former employer. The parties had entered into a compensation agreement upon termination of the defendant’s employment, which included a provision that he would keep the employer’s information confidential. The employer had subsequently discovered that the defendant had been collaborating with a competitor and it issued proceedings for database right infringement, misuse of confidential information and breach of contract.

The defendant admitted to having taken documents from the employer and to having continued to access the employer’s database after his employment had terminated. In fact, there were two databases in issue: a distributor database (which contained the names and details of the employer’s actual and potential distributors together with comments about a likely attitude to their products), and a customer database (containing information about customers). However, the defendant denied database right infringement on the basis that the employer had no database right in the distributor database because (1) the effort that it had invested in the creation of the database was insufficient; and (2) the database comprised data generated by the employer, which was not capable of protection, as opposed to data collated from other sources, which was capable of protection. In respect of the customer database, he argued that the employer had no database right because third party material was incorporated in it.

The High Court rejected the defendant’s arguments, finding that it was clear that the employer had invested time and effort in collecting the information in the distributor database as opposed to simply generating it. The database contained information pertaining to distributors’ interest in the employer’s products and was capable of protection. In respect of the customer database, the Court held that the fact that the database contained third party information did not mean that it did not attract database right. Accordingly, the Court granted summary judgment.

Cases concerning database right are not all frequent, and if they do arise, the context in which they are do so is often where former employees collaborate with a competitor, as in this case. The case illustrates the focus on how the database was created and how much investment has gone into the creation of the database, as opposed to the value of the database and how damaging it would be to the owner if it fell into the hands of a competitor.

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[1] Unreported

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