Optaglio Ltd v Tethal & Anor

Facts

Optaglio Limited, founded by Mr Philip Hudson in about 2000, manufactures optical technology including holographic security foils and labels, and by 2006 had a turnover of some £15 million and a Czech subsidiary, Optaglio s.r.o. In January 2006 Mr Vladimir Zhukov acquired, through a company under his control, approximately 90% of its shares. Mr Tomas Tethal, a director from 2001, attended a lecture by Professor Song of the University of Manchester on planar diodes and transistors and saw potential in combining those ideas with Optaglio's microstructure embossing techniques. Confidentiality agreements followed with the University and its spin-off Nano ePrint Limited, and on 18 April 2007 a UK patent application was filed in Mr Tethal's name, for Optaglio's benefit, as a defensive measure against Professor Song's forthcoming conference disclosure. Nano ePrint objected that the application contained its confidential information and made withdrawal a condition of continued collaboration; the application was withdrawn on 7 January 2008, days after Mr Hudson ceased to be a director. Optaglio sued both men for breach of directors' duty under their service contracts and section 174 of the Companies Act 2006. HHJ Purle QC, sitting as a deputy High Court judge in the Chancery Division, gave summary judgment for the defendants, and Optaglio appealed with the permission of Lewison LJ.