In The Style: founder defends rival’s claim he stole his idea
“There’s no such thing as a new idea”, or is there? Earlier this year, the High Court found in favour of Adam Frisby, the millionaire founder of In the Style, having dismissed claims raised by Paul Clements that Mr Frisby had stolen his idea for the retail business. This case provides a cautionary tale on how to protect confidential information, including business plans and strategies.
In The Style was at its height a successful online fashion brand. The business was formed in 2013 and achieved exponential growth, being valued at £105m on its AIM listing in 2021. However, a few weeks after the judgment, the business was sold for just £1.2m and rescued from the brink of insolvency by a private equity firm.
Mr Clements claimed that he had met with Mr Frisby at a Manchester pub in 2013, where confidentially he set out a fully formed business model ready for market, along with the names of multiple potential suppliers and the business’ name “In The Style”. He then instructed Mr Frisby to test the business plan and claims he invested £10,000 into the business, from which Mr Frisby would be paid £200 per week. Mr Clements alleged that there had been further meetings, until Mr Frisby falsely claimed the business plan had no future. Mr Clements alleged Mr Frisby then stole the idea behind the business plan and developed it himself.
Mr Frisby’s defence was that he and his associate created and developed the business of In The Style independently, without any involvement from Mr Clements. Mr Frisby acknowledged he had met with Mr Clements on one occasion regarding potential investment, but that Mr Clements was not interested. Mr Frisby claimed Mr Clements did not invest in the business and the two had no further contact until the claim was issued in December 2020.
The High Court ultimately found in favour of Mr Frisby, concluding that Mr Clements’ version of events was “false”.
The confidentiality claim
Mr Clements alleged that during the 2013 meeting with Mr Frisby, he disclosed confidential information and Mr Frisby subsequently used that in breach of confidence. While Mr Clements’ version of events was ultimately rejected, the case does act as a warning for businesses and how they can conduct themselves to best protect the confidential information they share with third parties.
The judge noted that, in order for there to be a misuse of confidential information, the recipient must have understood that the information was confidential. Those who disclose or threaten to disclose confidential information can be restrained - however, once confidential information becomes public, confidentiality can be destroyed.
With this in mind, in order to ensure that any information a business shares with a third party stays confidential, the following steps should ideally be adopted.
- Ask recipients (including personnel) to enter into non-disclosure agreements (NDAs) before disclosing any confidential information.
- Confirm with the recipient that you intend to share confidential information before doing so, either in writing or verbally when meeting in person.
- Inform any recipients that they are not authorised to use this information otherwise than in accordance with your instructions or for a specified purpose.
- Keep written records of the information disclosed, to whom and when and the circumstances in which it was disclosed.
- Ensure emails and electronic documents are secure and encrypted and that only authorised personnel have access.
- Train personnel to keep information confidential and ensure documents are not routinely removed from the office or read in a public place (such as on public transport).
- Mark written documents as “private and confidential”.
Lessons from the case
Mr Frisby and Mr Clements had very differing accounts regarding their encounters, including how many times they met, what was discussed and what the outcomes were. Given that this claim was heard almost a decade after the formation of In The Style, and the accounts of events were so different, contemporaneous records formed a key part of the evidence. As the case developed, it became clear that the court’s findings would rely heavily on these records, both as evidence and as a way to determine the witnesses’ credibility.
Unfortunately, there were very few formal written records from 2013 and the records which did exist were often ambiguous. Mr Frisby and Mr Clements offered different interpretations for much of the written evidence, particularly WhatsApp messages, each posing different explanations for what they meant and why they were written. A large majority of the written evidence was taken from WhatsApp exchanges, often between friends.
There are several key lessons to learn from the case:
- Rigorous note taking often does not take place in business, and in practice it is unreasonable to expect business owners to take notes for every meeting they attend. However they can be a helpful record.
- It would be a useful protective measure to send an internal email confirming the outcome of a meeting and what was discussed. Should litigation be commenced in the future, a written record like this, created before any litigation is contemplated, could be compelling evidence that one party’s version of events is the correct one.
- Be wary of WhatsApp:
- While it may be an easy way to communicate, the brief and often fast-paced nature of WhatsApp messaging may give rise to ambiguity, especially when reviewed by unfamiliar eyes years later;
- It is an inherently more relaxed form of communication, in which contributors are more likely to write in incomplete sentences, use slang, or slip into social conversations, which may cause problems in the case of a future dispute;
- WhatsApp also feels more private and personal, which changes the way people express themselves. As can be seen in this case, WhatsApp messages are just as likely to be made public as any email.
- If the use of WhatsApp is unavoidable, be mindful that, should a dispute ever arise, messages may become evidence and made public. Before sending business related messages, consider whether sharing that message in public could be problematic. Such messages could also become public if they discuss a colleague or employee who subsequently makes a subject access request for information relating to them held by the business.
Following the claim
Weeks after the judgment was handed down, In The Style was sold, with much debate still to be had about its future. The timings are nothing more than coincidental, it would seem. The landscape has changed exponentially since the online retailer was launched 10 years ago, with added challenges such as rising inflation, increased operating costs, as well as the shift in focus away from fast fashion.
The market has become increasingly more competitive, making the task of standing out from the crowd and maintaining success even harder. As such, protecting business ideas that help you gain that advantage is important.
If you’d like to discuss any of these issues or have questions about the article, please contact Grace Astbury or Elizabeth O’Leary in the commercial services team.
Grace Astbury
Solicitor, Commercial Services
T: +44 (0) 161 393 9062 M: +44 (0) 7949 033514
Grace is a solicitor in the commercial services team, advising and assisting a range of clients on all aspects of general commercial, non-contentious intellectual property and data protection work. She trained with a North West based law firm, handling a varied caseload of commercial, intellectual property and corporate matters.
Elizabeth O’Leary
Trainee solicitor, Commercial Services
T: +44 (0) 161 393 9032 M: +44 (0) 7487 548788
Battle of the supermarket giants
The ongoing debate about where the line is drawn between misrepresentation and inspiration continues, following a high-profile judgment in a dispute between two supermarket giants.
Technology and retail – bringing two worlds together
Technology in the retail sector can have a transformative quality that changes the way that brands interact with consumers. Last year, 100% Group carried out market research to find out what both brands and marketing agencies were planning for the year ahead.
Transforming retail spaces: when one door closes, another opens
Every day last year, 47 retail sector businesses shut up shop for the final time, resulting in 17,145 high street shops closing for good, according to the latest 2022 figures.
Our quarterly retail update is designed to bring you the latest news and legal developments relevant to the retail sector. If there are any areas you would like more information on or if you have any questions or feedback, please do not hesitate to let us know via our feedback form or get in touch with any member of our team.
Copyright in this publication is owned by Pannone Corporate LLP and all rights in such copyright are reserved. Pannone Corporate LLP is a limited liability partnership registered in England and Wales with number OC388393. Authorised and Regulated by the Solicitors Regulation Authority. A list of members is available for inspection at the registered office, 378-380 Deansgate, Manchester M3 4LY. We use the terms “partner” to refer to a member of the LLP.