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The Law Moves Fast to Protect Software Company’s Rights

The wheels of justice have a reputation for moving slowly, but a case in which three directors quit a technology company, taking a cohort of its strategic staff with them before setting up in rivalry, showed just how quickly the courts can move.

 

The High Court found that it was arguable that the directors had acted in breach of the fiduciary duties that they owed to the software development company. The company’s claim that its intellectual property rights had been infringed by misuse of its software in the directors’ new venture was also arguable.

 

A number of employees, who left the company and joined the new business, had also arguably breached their obligations of fidelity and restrictive covenants in their employment contracts which prevented them from soliciting the company’s customers or working for competing businesses for specified periods.

 

The Court issued an emergency injunction to protect the company’s position pending a full trial of the action, in which a permanent injunction and substantial damages would be sought. The interim order placed tight restrictions on the new venture’s activities but was carefully tailored to ensure that it was not forced out of business.




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Nationwide Employment Lawyers Ltd is Authorised and Regulated by the Financial Conduct Authority. For peace of mind you can find information about our authorisation by checking the Registration number 838365 on the Financial Services Register : register.fca.org.uk. Please note all telephone calls are recorded, as required by the regulator. Nationwide Employment Lawyers Ltd is not a firm of solicitors. Instead we offer an exceptional level of service using specialist employment law Solicitors, Barristers and a Senior Advocate.
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