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Battery secrets – Celgard v Senior injunction

11 August 2020

The UK High Court has recently granted an interim injunction in a battle between two battery separator manufacturers, Celgard and Shenzhen Senior Technology Material Company (“Senior”), over accusations of the unlawful acquisition of trade secrets. The judgement can be found here.

Celgard (a US manufacturer of battery separators) brought proceedings against Senior (a Chinese manufacturer of battery separators) over new products intended for the UK market. One of Celgard’s leading scientists, Dr Xiaomin (Steven) Zhang, had previously left Celgard to join Senior as their Chief Technology Officer.  It was argued that he had disclosed trade secrets to Senior.

This case is interesting for several reasons, not least because it is one of only a handful of cases brought in relation to relatively new legislation around the unlawful acquisition of trade secrets (the Trade Secrets Enforcement Regulations 2018, related to EU Directive 2016/943).

Moreover, this case provides an interesting contrast to the recent case of Neurim v Mylan, where interim injunctive relief was denied (covered in an earlier article here).

The claimant argued that Dr Zhang had provided Senior with confidential information which had allowed them to create improved products. This had enabled the defendant to dramatically increase their market share. Further, it was alleged that the defendant was seeking to trial their latest product with a UK battery manufacturer, in order to supplant the claimant as a preferred supplier of battery separators. With the rising demand for electric vehicles, the loss of this preferred supplier status would cause significant harm, in a manner that would be difficult to quantify.

The conduct of the parties involved was seemingly important in reaching a decision, and there were interesting questions regarding whether or not the UK courts were in fact the correct forum for the dispute. However, it shows that the UK courts are not afraid to issue interim injunctions, despite the fact that it can be difficult at the earlier stages of litigation to have all the facts.

On a final note, this author notes Mr Justice Trower’s comments that, “there will always be difficult questions around how much of what Dr Zhang took with him was a trade secret and how much was part of his own general expertise and acquired knowledge, not capable of being protected by Celgard as confidential information“. Proving what is, or is not, a trade secret will not be trivial.

Accordingly, it is strongly advised that companies consider their IP position when key technical staff intend to leave the business. Whilst not always practical, registered IP rights (such as patents and registered designs) might be put in place, which can ultimately be enforced without the need to resolve such difficult questions.

If you have any questions about this matter or about protecting your IP in the battery space, contact Bruce Dean or your usual Withers & Rogers representative.

 

Bruce Dean
Life Sciences & Chemistry Group

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Withers & Rogers LLP August 2020