Pretoria - A tug-of-war over a product called Roadsaver – a bitumen compound that can be used to fill and seal potholes and cracks in tarred surfaces – has turned into a legal battle.
A company is claiming one of its former directors took the secret formula for making this product with him when he resigned.
Universal Blending Ltd feared that Sarel Henderson, the man with the secret formula for this product, would now open his own business using this product. According to Universal, the product belonged to them.
Henderson, on the other hand, while not denying that he is going to use Roadsaver in his new business, said the product did not belong to Universal.
The company told the court that Henderson was the only person who knew the full formula because he revised the ingredients to replace an additive that was found to be carcinogenic.
Henderson was employed by Universal from 2014 and also became a director and shareholder in 2019.
He resigned as an employee and director in September 2020 and returned his shares at the same time.
The company alleges that Henderson, through his employment at the company, acquired knowledge of the formula for manufacturing its Roadsaver.
It said he was now using that knowledge to produce the Roadsaver product in competition with the company. It argued that Henderson’s conduct is unlawful because the formula for producing the Roadsaver product is a trade secret that it owns.
The applicant alleged that Henderson has refused to divulge the full formula to it despite demand. It now wants Henderson to reveal the secret to the company and for him not to use it in competition with the applicant.
Henderson confirmed that the composition and formula for the manufacture of the Roadsaver product are not generally known and have substantial economic value. He also agreed that he was going to use this trade secret for his own benefit.
Henderson explained that a close corporation called Pilot Lubricant is the owner of the product. Pilot is the entity which historically supplied the Roadsaver product to the applicant.
He said that in 2016, while still working at Universal, he, of his own accord, approached the applicant’s main shareholder, who gave him a list of the chemicals used to produce the Roadsaver product.
This, the court was told, was done because Pilot had increased its prices for the Roadsaver product and Universal felt it was no longer profitable for it to continue purchasing it.
According to Henderson, he used this list and, through a process of trial and error, eventually determined how to manufacture the Roadsaver product himself. He said that he thus developed the formula independently of the applicant and not for the applicant’s benefit.
Acting Judge MA Wesley said documents issued to the court indicated that Pilot developed the Roadsaver product. It appeared that Henderson and Universal had discussed recreating the formula because Pilot had increased its prices for the product.
If Universal was the owner of the product, then it would not have needed to recreate the formula. It could have found another manufacturer to produce it according to its own formula, the judge said.
He added that Universal did not prove it owned the product, and thus its application had to be dismissed.
Pretoria News