In a flagrant breach of contract, former Ocado co-founder, in cahoots with a senior IT professional, stole confidential documents from the company with intent to set up a rival service.
Jonathan Faiman helped set up Ocado in 2000, left in 2008 and in 2018 began work on Project Today Holdings Ltd., envisaged to be a major competitor to Ocado.
Background
Ocado is now a FTSE 100 company worth £14.9 billion, turning profit first in 2015 after it developed warehouse networks that would use robots rather than human labour to sort orders. Ocado had a partnership with Waitrose, and then later with Marks and Spencer.
The Breach
The listed documents taken by Faiman and Jon Hillary included operational information, details of deals with important parties such as Waitrose and M&S and future plans for automated warehouses.
The Court ordered for the defendants to destroy all documents within 28 days with a settlement which remains confidential but is confirmed as including a “significant payment” being made to Ocado.
Impact
Ocado say this litigation demonstrates that they will take the “strongest possible action against any individuals or companies to protect its interests”, of which it considers its intellectual property and know-how to be of paramount value.
As a general rule in the UK, relevant intellectual property created by an employee during the course of their employment belongs to the company.
This understanding is usually formalised through the employee’s contract of employment.
The Ocado saga, albeit essentially a blatant disregard for the employment agreement, shows that intellectual property theft does happen in real life, and emphasises the importance of having robust employment contracts, as well as procedures for managing and monitoring confidential information and trade secrets.
At Scintilla, we help innovative companies get a grip on their intellectual property. Our unique commercial approach combines registration of patents and trade marks with strategic input so that IP can be a springboard for business growth. If you would like to discuss your IP needs, do contact us or book a free initial consultation!