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DISCLOSURE OF PROPRIETARY & CONFIDENTIAL FORMULATIONS BY FORMER DIRECTORS A (VERY) BRIEF HISTORY Pika Chemical & Technical (Pty) Ltd T/A Afritech (“Afritech”) produces a fruit drying oil (FDO) used to aid the drying of raisins and sultanas. It contends that the formulation is proprietary to it and is confidential. It is very successful and supplies some of the largest food manufacturers in South Africa, including Pioneer Foods. THE PLOT THICKENS The formulation was developed by the First Respondent (“Nolte”), while he was a director (and co-founder) of Afritech. He achieved this by reverse-engineering a formulation of an Australian company. After leaving Afritech, Nolte assisted another company in developing its own FDO. And you can imagine what happened next. FINDINGS The court found that “Indeed, and perhaps tellingly, Mr Nolte admitted that he is one of only a handful of people who know the formulation of Pylene FDO. This admission in my view, is sufficient to establish, prima facie, that the applicant's formulation of Pylene FDO is confidential to (Afritech).” Nolte developed the formulation whilst a director of Afritech and as such the technology was owned by Afritech (despite Nolte believing he was the owner as a result of his discovery). “I am accordingly satisfied that the applicant has established, prima facie, that Mr Nolte disclosed the applicant's formulation of Pylene FDO … and that such conduct is a breach of his ongoing fiduciary duty not to disclose information confidential to (Afritech)...” ORDER Interim interdict granted against all of the respondents from making use of Afritech's fruit drying formulations or any products therefrom without Afritech's consent (including by disseminating or taking possession thereof). Key Lessons: 1. A director’s fiduciary duty remains with a director after their resignation and is breached if it involves the use of confidential information that is worthy of protection. 2. Make sure you protect your confidential information by way of physical and legal protections (NDA’s, employment contracts, etc) - confidential information such as the applicant's data sheets stored on Mr Nolte's erstwhile drop box folder on the applicant's computer. Speak to your specialist IP lawyers at Witz Inc Attorneys for advice and guidance on how to protect your valuable IP. Case reference: Pika Chemical & Technical (Pty) Ltd t/a Afritech v Nolte and Others (4093/2024) [2024] ZAWCHC 230 (30 August 2024) Thanks to Spartan Caselaw for the case update. #intellectualproperty #trademark #trademarks #iplaw #lawyers #litigation #ip #trademarks #trademarklaw #trademarkattorney #trademarkattorneys #iplawyers #iplawyer #entrepreneur #brandprotection #copyright #confidenitalinformation #tradesecrets #NDA #IPLitigation #directors #fiduciaryduty