Don't cry over spilled beer IP: How Anton Piller can help keep trade secrets

Image: Supplied

Background

The facts were fairly straightforward. Johnson Sebuggwawo, who was employed as a trade marketing executive by the company Nile Breweries Limited for some 11 years, resigned and joined a competitor company, Uganda Breweries Limited, in the same role.

An investigation revealed that Sebuggwawo - who left Nile Breweries on 4 April 2023 - had over the period 9 January 2023 to 29 March 2023 transferred 125 emails with confidential business information from his official email address to his personal email address. These emails contained Nile Breweries’ marketing strategies and statistics. Nile Breweries sued Sebuggwawo for breach of his employment contract and for unauthorised disclosure of trade secrets.

Anton Piller

Nile Breweries also brought an Anton Piller application, one which would permit the inspection of Sebuggwawo’s house and seizure of computers, documents, materials or articles relating to the applicant’s trade secrets or business information. An Anton Piller order is a somewhat radical measure that is obtained without notice to the other side (a so-called ex parte order), and it is only granted in extreme circumstances.

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The order gets its name from the famous British case of Anton Piller K.G v Manufacturing Processes Ltd (1976), which dealt with the disclosure of confidential information. This was back in the days of Lord Denning who decided that an ex parte order can be granted in extreme cases where there is a grave danger of property being smuggled away, or vital evidence being destroyed. He described the order as being one at the extremity of the court’s powers, and he advised circumspection in the enforcement of such an order.

Was an Anton Piller order warranted here?

Megan Dinnie, Associate at Spoor & Fisher

In a judgment dated 18 March 2024, Judge Patricia Mutesi described the Anton Piller order as ‘an interlocutory search and seizure order issued in an ex parte application where there is a reasonable fear that there is evidence of intellectual property rights in a person’s possession which could be destroyed and lost if that person is alerted of the legal action instituted against him before the order is made’.

The judge said that courts must be circumspect in issuing such orders. She went on to say that the conditions for such an order are as follows:

• There must be an extremely strong prima facie case;
  
• The damage to the plaintiff, potential or actual, must be very serious;
  
• There must be clear evidence that the defendant has incriminating matter in their possession, and a real possibility that it will be destroyed before an inter partes application can be brought.

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The judge said that the applicant in this case, Nile Breweries, had an ‘extremely strong’ case. The 125 emails that had been sent were very telling. As was the fact that Sebuggwawo resigned on 31 March, left on 4 April, and took up employment with a competitor within a matter of days. It was also significant that his terms and conditions with Nile Breweries prohibited him from copying any information from his employer.

The judge found for Nile Breweries. She held that it was highly probable that Sebuggwawo had intended to use the confidential information to the detriment of Nile Breweries. The judge considered the potential harm that Nile Breweries would suffer if the court refused to issue the Anton Piller order, and concluded that Sebuggwawo could continue to access, destroy, or replicate sensitive data, thus exacerbating the damages.

Confidentiality agreements

An Anton Piller application is an extreme measure and not one to be taken lightly. One way that employers can mitigate the risk of data misappropriation by employees is, of course, by ensuring that they all sign comprehensive confidentiality agreements.