Apple v Lancaster and the need for vigilance

Apple’s recent law suit against its former employee, Simon Lancaster[1], is an illustration of how vulnerable highly innovative companies are to employee trade secret theft.

Secrets provided to a journalist

Apple alleges that Lancaster used his position of trust as a very senior member of staff to gain access to meetings and documents outside his own job’s responsibilities. It claims that he fed secrets obtained in this way to a journalist who published them, attributing them to a source at Apple. In return, the journalist provided benefits to Lancaster including, it is alleged, media coverage for a start-up company Lancaster had invested in. This activity appears to have intensified even after Lancaster resigned from Apple to join Arris Composites, a material design company, in 2019.

Measures to protect trade secrets circumvented

Apple’s claim document sets out the extensive measures Apple took to protect the confidentiality of its trade secrets. This included restricting access to sensitive information through encryption and other technical measures, controlling and monitoring physical access to its facilities and contractual protections. It appears that Lancaster was able to circumvent these measures because of his standing as a senior employee of long standing.

Injunction

Apple claims trade secret misappropriation and breach of contract. In addition to monetary compensation it seeks the return of all copies of its confidential information and injunctive relief against any use of the information.

What can be done in such a situation?

The alleged exploitation of a position of trust to circumvent technical and procedural protection measures is all too typical of such cases. With hindsight one might say that Apple should have been more careful. However, the important thing once the secrets are out is to act quickly against third parties who have received the information as well as to recover information leaked so far as practicable. The existence of effective contractual post termination provisions in employee contracts will bolster the employer’s position here.

We provide pragmatic advice and assistance to clients across multiple industries to help them protect their confidential information and other business interests. We have particular expertise in:

• Advising on confidentiality provisions and NDAs to protect an employer’s business
• Drafting and advising on post-termination restrictions, including non-compete, non-solicitation, non-dealing with customers, clients and non-solicitation of employees, customers and clients
• Advising on team moves
• Bringing and defending applications for High Court injunctions to prohibit the use of confidential information and enforce post termination restrictions, including springboard injunctions (preventing competitors gaining an unfair competitive advantage). Please click here for more information about our business protection service.

If you would like further information about these services please contact Tom Lingard or Hannah Ford or your usual contact and Stevens & Bolton.