The Supreme Court has found a former employee of an industrial glove manufacturer in the Katunayake Export Processing Zone liable for disclosing the company’s manufacturing and trade secrets to a Korean competitor, overturning a Commercial High Court ruling that had dismissed the case.
The judgment was delivered by Justice Mahinda Samayawardhena, with Justices Janak de Silva and Sampath Wijeratne agreeing.
The company manufactures industrial gloves using rubber latex and holds a patent covering the technology behind the process. It told the Commercial High Court of Colombo that the employee had been trained on its technical and trade secrets as a skilled and trusted staff member, and alleged that while still employed he collaborated with a Korean glove manufacturer and passed on those secrets for financial gain.
Ada Derana reported that the employee served as an Industrial Controller and had worked at the company for more than a decade before resigning without notice on or around November 4, 2010.
In his defence, the employee said he was unaware of any trade secrets belonging to the company and argued that his educational qualifications and position left him without the capacity to understand or acquire such advanced technology. He denied disclosing any confidential information to a third party.
The Commercial High Court accepted that argument, ruling on March 29, 2019 that the company had failed to establish that its secrets had been disclosed to the employee.
The Supreme Court held that the High Court judge had failed to properly evaluate the evidence, and found that the employee had in fact disclosed the company’s manufacturing secrets, trade secrets and sensitive information to a third party for financial gain. It set aside the 2019 judgment and issued an injunction barring the employee from selling or exploiting the confidential information in violation of the company’s patent rights.
Conflicting accounts of the damages award
The two outlets that reported the ruling differ sharply on the sum awarded. Ada Derana reported that the Supreme Court assessed the company’s loss at Rs. 50 million and ordered the employee to pay that amount in compensation together with legal costs.
Newswire, which named the plaintiff as Board of Investment company ATG Ceylon (Pvt) Ltd and dated the judgment to July 27, reported that the Court awarded Rs. 5 million against a claim of Rs. 200 million — on the basis that the company’s actual losses were hard to quantify and that its prompt legal action had limited the damage. Newswire described the employee as a process control technician and said the material related to the company’s “Maxi” glove range.
LankaNewz was unable to obtain the judgment text to reconcile the two figures, and treats the damages amount as unsettled pending publication of the ruling.
Sources: Ada Derana; Newswire.
