In the startup ecosystem, spinning out of a successful company to build a competitor is a tale as old as Silicon Valley. But the line between leveraging industry experience and stealing proprietary tech is heavily policed. A recent judgment from the North West High Court in Mahikeng, South Africa, has provided a stark reminder of what happens when that line is crossed.
The case, Dispro Tech SA (Pty) Ltd v Soot Science (Pty) Ltd, details a brazen attempt by two senior employees to clone an established deep-tech firm. From the day they left their employer to the day they incorporated their rival startup, exactly 11 days elapsed.
By the following month, they were pitching their former employer’s biggest clients.
The resulting legal hammer — which included an 18-month trading ban and the mandated destruction of all electronic data — sets a stringent precedent for intellectual property protection and the legal boundaries of employee spin-outs in the region.
The moat: Hardware meets custom code
To understand the theft, you have to understand the tech. Dispro Tech operates in a highly specialized, capital-intensive B2B sector: emission gas testing for the mining industry. Specifically, the company measures diesel particulate matter (DPM) produced by underground mining engines, a critical health and safety metric.
Dispro Tech was a first-mover in South Africa. According to court documents, the company’s founder, Deon Du Preez, spent years developing a unique business model. This involved securing exclusive African distribution rights for specialized hardware from a German manufacturer, Saxon.
But the hardware alone wasn’t enough. Dispro invested heavily in an external IT firm to build custom software that allowed the Saxon equipment to interface effectively with mining systems. This proprietary communication protocol was Dispro’s “moat” — a technical hurdle that took significant time, money, and expertise to clear.
The two respondents — a Technician Supervisor hired in 2020 and a Senior Data Analysis Specialist hired in 2023 — were deeply embedded in this system. They underwent training in Germany at Dispro’s expense and even signed the exclusive distribution agreements with Saxon on behalf of Dispro. They knew exactly how the engine worked.
The “Dispro 2 O” budget
The timeline established in court reads less like a strategic startup launch and more like a corporate heist.
The relationship between the founders and the employees began to fracture in March 2025. Dispro’s sole director grew suspicious that the data specialist was attempting to use the company’s resources to build a rival framework and suspended him.
During the suspension, an investigation of his company laptop uncovered a file saved months earlier, in October 2024. It contained a comprehensive budget for a new company, including the purchase of Saxon equipment. The document was titled “Dispro 2 O Budget”.
When confronted, both employees vehemently denied plans to start a competitor, and the suspension was lifted.
Yet, the court found that on May 15, 2025, the data specialist emailed a copy of Dispro’s proprietary software to his personal account. Two weeks later, on June 2, both employees resigned, working their notice periods until June 27.
On July 8, 2025–11 days after walking out the door — they incorporated Soot Science. By late August, the founders of Soot Science were spotted at Impala Platinum, a major Dispro client, conducting an emission test demonstration. They had also submitted a proposal to another Dispro client, Valterra Platinum.
Soot Science was utilizing the exact same methodology, the same Saxon hardware (purchased in breach of Dispro’s exclusive African rights), and, crucially, the same custom software.
The “Springboard” defense falls flat
When confronted with legal action, the founders of Soot Science claimed they had independently developed their own software.
Presiding Judge Hendricks JP dismantled this defense. Calling the founders’ claims “highly improbable,” the judge noted it was virtually impossible to replicate years of independent, derived R&D in a matter of weeks. The ineluctable conclusion was that Soot Science was running on the code emailed on May 15.
The ruling hinged heavily on the legal doctrine of unlawful springboarding.
In corporate law, “springboarding” occurs when an entity bypasses the arduous process of developing a product, technique, or customer base by using the fruits of someone else’s labor as a starting point. Even if some of the information used is in the public domain, combining it with stolen proprietary data to skip the R&D phase entirely constitutes unlawful competition.
The respondents had breached their fiduciary duties — an obligation of trust and loyalty that, importantly, extends to not using confidential company information to compete against a former employer after resigning.
In pre-trial correspondence, the founders of Soot Science boldly told Dispro’s lawyers that they were unlikely to take any fiduciary claims seriously. That bravado evaporated in court.
The fallout
The High Court did not merely slap Soot Science on the wrist; it effectively dismantled the company’s operational capacity. The judge described the founders’ conduct as “reprehensible” and issued a sweeping order:
- An 18-month interdict: The founders are legally barred from competing with Dispro Tech for a year and a half. In the tech sector, an 18-month freeze is a lifetime, giving Dispro ample room to secure its client base.
- Total data destruction: The respondents were ordered to return all physical files and permanently delete all electronic copies of Dispro’s confidential information, software, and client data from their devices.
- Punitive costs: The court awarded costs on an “attorney and client scale.” This is a severe, punitive measure where the losing party pays a significantly higher portion of the winner’s legal fees, explicitly utilized by the judge to “mark [the court’s] disquiet” at their unlawful conduct.
Ecosystem implications
The Mahikeng judgment is a textbook case study for the wider tech ecosystem.
For venture capitalists and angel investors backing spin-out founders, Dispro Tech v Soot Science shows the critical importance of technical due diligence. If a founding team claims to have built a complex, deep-tech product in a few weeks, investors must ask for the commit history. Funding a company built on a “springboard” of stolen IP leaves investors holding a toxic, legally unviable asset.
For technical talent, the ruling provides clarity. The tech industry encourages disruption, and employees are free to leave and use the general skills and industry knowledge they acquired. But IP, source code, client lists, and custom methodologies remain the property of the house.
You can build a better mousetrap than your former employer — but you have to buy your own wood, and you have to build it from scratch.
The judgment is Dispro Tech SA (Pty) Ltd v Soot Science (Pty) Ltd (Case No 5063/2025) [2026] ZANWHC 99 (8 April 2026).