O Mustad and Son v Dosen and Another; O Mustad and Son vAllcock: HL 1924

(Heard in 1924, but noted only in 1963) Dosen worked for a company T under a contract of employment that included an undertaking to keep confidential information acquired at work. His employer went into liquidation. The benefit of that company’s trade secrets was bought by the plaintiffs, O. Mustad and Son. Dosen went to work for Allcock and Co.
Held: Though the employee was never employed by the plaintiff, the benefit of a confidence could pass, by a purchase from the liquidator of Thoring, and, so, could be shared between and be enforceable by co-owners or by a successor in title where the defendant knew or could be taken to have known of the co-ownership or sharing before acting in breach and where all entitled to the confidence assert it.

Lord Buckmaster ‘My Lords, the most important thing to remember is that, for the purpose of establishing their case in these proceedings, it was essential that the appellants should prove, firstly, that there was special information that Dosen had obtained in their service which he was prevented from disclosing, and, secondly, that he either had disclosed it or had threatened that it should be disclosed. It might well be that, had nothing more happened, the circumstances connected with this case would have been sufficient to support the claim which the appellants put forward; but on January 22, 1926, a few months after the institution of these proceedings, the appellants applied for a patent to protect an invention relating to the manufacture of fish-hooks, which in substance covered the principle of the machine which Dosen had constructed while in the service of Thoring and Co. It consisted of an arrangement by which what was known as the transporter could be operated so that it would alternatively move the pieces of wire along, lift, and depress them in order that they might be brought into contact with the various shaping tools which would perform the operation by means of which a piece of straight wire ultimately assumed the form of a fish-hook. Now that specification was called to the notice of the respondents by a letter from the appellants’ solicitors, who informed them that a specification to this effect had been filed, in these words, on June 7, 1926: ‘Our clients have applied for a British patent of the machine and the application has been accepted.’ Following on that the respondents’ solicitors asked whether the patent covered precisely the same machine as was referred to in the statement of claim, and later repeated the inquiry whether it was the same machine as was the object of the appellants’ complaint against the respondents, but this, the appellants’ solicitors said, was information which they were not in a position to give – and the matter so remained. Meanwhile the appellants had obtained an interlocutory injunction against the disclosure of secrets by Dosen to the other respondents; they subsequently alleged that that injunction had been broken, and sought the process of committal against the respondents in respect of the breach. Upon that application coming before the Court of Appeal, Mr. Wallington, counsel for the respondents, referred again to this machine and said that the appellants had themselves applied for a patent for the very thing and were now asking that the respondents ‘be committed to prison for breach of an injunction which relates to the non-disclosure of a secret which they themselves have published to the world.’ Later on in the course of argument Mr. Rayner Goddard, who appeared for the appellants, accepted the statement to this extent, that when Bankes L.J. said to him, ‘If Mr. Wallington is right, whatever his knowledge, if it were secret, assuming it was secret, it is now public,’ he said, ‘yes, it is now patented in this country.’ The effect of this conduct and statement must clearly have been to suggest to the respondents that the essential part of this machine had been disclosed in the specification and was the subject of protection by a patent. In that position the matter comes for trial.
Of course, the important point about the patent is not whether it was valid or invalid, but what it was that it disclosed, because after the disclosure had been made by the appellants to the world, it was impossible for them to get an injunction restraining the respondents from disclosing what was common knowledge. The secret, as a secret, had ceased to exist. But the appellants say – and I think say with considerable force – that it might well have been that in the course of the experience which Dosen had gained in their service he had obtained knowledge of ancillary secrets connected with the patented invention which were not in fact included in the invention but which would be of very great service to any person who proceeded to make the machine to which the invention related. Mr. Trevor Watson, in his admirable argument, satisfied me that it was at least probable or possible that such a set of circumstances might have existed; but, having regard to what had taken place and to the express request on the part of the respondents that they should be informed if the patented machine did in fact cover the very matter the disclosure of which was made the subject of complaints, it appears to me that there was thrown upon the appellants the burden of showing that there were in fact these outside matters which were not included in the specification, that they had been or there was reasonable ground for believing they might be disclosed, and that their disclosure would be a wrong against which they were entitled to be protected by injunction. Nothing of the kind occurred. There was no attempt whatever made at the trial to distinguish between those parts of the machine which were outside the patent and those which were within. At no time was evidence led for the purpose of showing the added matter which Dosen might have learned in his former master’s service and which he might disclose to the detriment of the present appellants’.


Lord Buckmaster


[1964] 1 WLR 109, [1963] 3 All ER 416


England and Wales


Appeal fromO Mustad and Son v Dosen and Another CA 1923
There had been a discussion as to what a trade secret might be:- ‘The learned Judge discussed with the Jury what constitutes a trade secret, but of course it is no good discussing what constitutes a trade secret if the person who is the owner of the . .

Cited by:

CitedDouglas etc v Hello! Ltd etc ChD 11-Apr-2003
The claimants were to be married. They sold the rights to publish photographs of their wedding, but various of the defendants took and published unauthorised pictures.
Held: The claimants had gone to lengths to ensure the commercial value of . .
ApprovedAttorney-General v Guardian Newspapers Ltd (No 2) (‘Spycatcher’) HL 13-Oct-1988
Loss of Confidentiality Protection – public domain
A retired secret service employee sought to publish his memoirs from Australia. The British government sought to restrain publication there, and the defendants sought to report those proceedings, which would involve publication of the allegations . .
CitedEPI Environmental Technologies Inc and Another v Symphony Plastic Technologies Plc and Another ChD 21-Dec-2004
The claimant had developed an additive which would assist in making plastic bags bio-degradable. They alleged that, in breach of confidentiality agreements, the defendants had copied the product. The defendants said the confidentiality agreement was . .
CitedDouglas and others v Hello! Ltd and others (No 3) CA 18-May-2005
The principal claimants sold the rights to take photographs of their wedding to a co-claimant magazine (OK). Persons acting on behalf of the defendants took unauthorised photographs which the defendants published. The claimants had retained joint . .
Lists of cited by and citing cases may be incomplete.

Intellectual Property

Updated: 19 November 2022; Ref: scu.181409