Intellectual Property
Winter Session 2016
Beth Oliak
Moorgate Tobacco Co Ltd v Philip Morris Ltd
(No 2) (1984) 156 CLR 414 at 438 (Deane J)
“Like most heads of exclusive equitable
jurisdiction, its rational basis does not lie in
proprietary right. It lies in the notion of an
obligation of conscience arising from the
circumstances in or through which the
information was communicated or obtained.”
Farah Constructions v Say Dee (2007) 230 CLR 89
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Information received that Council would likely approve DA if
property amalgamated with adjoining properties
[118] Even if the information were confidential, that would
not make it property for the purposes of the first limb of
Barnes v Addy. The protection given by equitable doctrines
and remedies causes confidential information sometimes to
be described as having a proprietary character, "not because
property is the basis upon which that protection is given, but
because of the effect of that protection”. Certain types of
confidential information share characteristics with standard
instances of property. Thus trade secrets may be transferred,
held in trust and charged. However, the information involved
in this case is not a trade secret.
Contract
• define Confidential Information
• may protect information that equity not protect
• only use for Authorised Purpose
• may be narrower than what equity allows
Equity
• restrain use of confidential information
• unconscionable to use for other purposes
• equitable remedies – injunction, account of profits
• may be better than damages
Optus v Telstra [2010] FCAFC 21
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Network interconnection permits carriage of telecommunications
traffic generated by one’s customers on the other’s network
Telstra has access to Optus traffic information - quantity,
source, destination, duration, time of occurrence and kind of the
telecommunications traffic, as well as the value of the
telecommunications traffic whether in terms of its aggregate
billing value or individual customer billing details and value
Equitable and contractual obligations co-exist - exhaustive
definition of Confidential Information in Access Agreement does
not show that intended to exclude equitable obligation
Optus entitled to equitable remedies
Argyll v Argyll [1967] Ch 302
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Sunday newspaper to which the Duke of Argyll had
revealed confidential information about the Duchess of
Argyll was restrained from publishing intimate marital
confidences
Prince Albert v Strange (1849) 47 ER 1302
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Prince Albert receives an injunction restraining
publication of his private etchings of the Royal Family
Commonwealth v John Fairfax (1981) 147 CLR 39
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Unless disclosure is likely to injure the public interest,
government information will not be protected
Douglas v Hello Ltd
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Restraint of publication of photos of Michael
Douglas and Catherine Zeta-Jones wedding
Naomi Campbell v Mirror Group Newspapers Ltd
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MGN liable for publishing photos of NC leaving
rehab clinic
Duty of confidence arises wherever the
defendant knows, or ought to know, that the
claimant can reasonably expect their privacy to
be protected
Coco v A.N. Clark (Engineers) Ltd
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Coco discloses information about moped –
AN Clark abandons discussions with Coco
and develops own moped
Coco did not show that the similarities
between AN Clark’s moped and his moped
were because of the use of information
provided by him to AN Clark
• Information itself must ‘have the necessary
quality of confidence about it’;
• Information must have been imparted in
circumstances importing an obligation of
confidence; and
• Unauthorised use of that information to the
detriment of the party communicating it.
Corrs Pavey Whiting & Byrne v Collector of Customs
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Solicitors acting for patentee of Naproxen requested
Customs provide documents relating to Alphapharm
importing infringing drug; documents not disclosed
because confidential
Gummow dissent becomes law of confidence:
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the information in question must be identified with specificity;
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it must have the necessary quality of confidence;
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it must have been received in circumstances importing an
obligation of confidence, and
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must be an actual or threatened misuse of the information
without consent
Saltman Engineering Co v Campbell Engineering Co
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“The defendants knew that those drawings had been
placed in their possession for a limited purpose,
namely, the purpose only of making certain tools . . .
required for the purpose of manufacturing leather
punches”
“What the defendants did in this case was to
dispense in certain material respects with the
necessity of going through the process which had
been gone through in compiling these drawings, and
thereby to save themselves a great deal of labour
and calculation and careful draftsmanship . . . That,
in my opinion, was a breach of confidence”
Saltman Engineering Co v Campbell
Engineering Co
“If a defendant is proved to have used
confidential information, directly or
indirectly obtained from a plaintiff, without
the consent, express or implied, of the
plaintiff, he will be guilty of an infringement
of the plaintiff’s rights.”
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High Court rejects big pharma’s claim that confidential
information furnished to obtain governmental approval
of the use of a pharmaceutical substance may not be
resorted to in considering an application by another
applicant, for approval of a version of the same
substance
Proof of detriment not required:
• “equity intervenes to uphold an obligation of conscience
and not necessarily to prevent or to recover loss”
• “the obligation of conscience is to respect the confidence,
not merely to refrain from causing detriment to the
plaintiff”
Reasons:
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Otherwise difficult for court to:
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enforce an injunction
satisfy itself that the information was imparted in
circumstances giving rise to an obligation of
confidence
Misuse of confidential information is a very serious
allegation – requires particularisation
Allows other parties to know precisely the
circumstances in which they may be found to be
wrongfully disclosing or using confidential
information
Smith Kline & French Laboratories (Australia) Ltd v Secretary,
Department of Community Services & Health
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SKF submits information to government to
obtain marketing approval for drug
Government discloses information to maker
of generic drug
SKF must be able to identify with specificity,
and not merely in global terms
Manderson M&F Consulting v Incitec Pivot Ltd
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Confidential information defined by means of attributes,
inputs, outputs, a formula and informed computations
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Trial judge finds the “fatal flaw in the proposed statement
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On appeal:
of claim is that it refers to the Model, discusses the
problems it seeks to overcome, but never actually states
what the Model is… the model is sought to be defined in
terms of a description of inputs and outcomes – but the
heart of it, the Model itself, is not identified or defined”
“there is no requirement for a ‘piece of paper setting out
the Model … such as an Excel spreadsheet’. In our
opinion, the ‘heart of it, the model itself’, was identified,
although not in terms of a formula, algorithm or
mathematical or computer model”
Del Casale v Artedomus (Aust) Pty Ltd
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Alleged confidential information that “Isernia” is modica stone
sourced from Ragusa in Sicily used by former employees
".... subject to any contract that may have existed,
the [employees] were entitled to compete with Artedomus in
the stone business after their employment had come to an
end, and they were entitled to obtain stone for that purpose
from any source. They were entitled to go to a trade fair, and
to look for suppliers of stone at that fair, including suppliers
of stone similar to Isernia. What restraint of use of this
particular piece of confidential information would require is
that in doing so, they somehow blot out their knowledge that
Isernia was modica stone…"
Wright v Gasweld
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Mr Wright was former employee of Gasweld, an importer of
hardware from Taiwan
Mr Wright leaves after eight years and competes with Gasweld
despite express term of agreement that he would not use
confidential information obtained through his employment with
Gasweld
Alleged confidential information is the identity of four reliable
Taiwanese suppliers of metal hardware tools of 3000
Although not a trade secret or highly confidential
information constitutes “other” confidential information able to be
protected by agreement
Doctrine against restraint of trade prevents protection of trivial
information
1.
The extent to which the information is known outside the
business.
2.
The extent to which the trade secret was known by
employees and others involved in the plaintiff’s business.
3.
The extent of measures taken to guard the secrecy of the
information.
4.
The value of the information to the plaintiffs and their
competitors.
5.
The amount of effort or money expended by the plaintiffs in
developing the information.
6.
The ease or difficulty with which the information could be
properly acquired or duplicated by others.
7.
Whether it was plainly made known to the employee that the
material was by the employer as confidential.
8.
The fact that the usages and practices of the industry support the
assertions of confidentiality.
9.
The fact that the employee has been permitted to share the
information only by reason of his or her seniority or high
responsibility.
10. That the owner believes these things to be true and that belief is
reasonable.
11. The greater the extent to which the “confidential” material is
habitually handled by an employee, the greater the obligation of
the confidentiality imposed.
12. That the information can be readily identified.
Moorgate Tobacco Co Ltd v Philip Morris Ltd
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Marketing results, advertising, position paper and
knowledge that Loew’s wanted to introduce the brand
“Golden Light” into Australia (had been selling the product
for two years overseas)
Evidence did not establish that any of the material was in
fact regarded as confidential by Loew's or that Loew's at
any time requested Philip Morris to treat or regard it as
confidential
Action for confidential information should relate to the
nature of the commodity which is the substance of the
transaction
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Lenah Game Meats operated a possum meat processing
plant in Tasmania
Unknown person(s) trespassed on LGM’s property and
installed video cameras which taped the slaughter and
processing of possums
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Video was provided to an animal rights group who gave
it to the ABC
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LGM sought an interlocutory injunction to restrain the
broadcast of the video by ABC
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ABC was aware that the video had been obtained
unlawfully
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High court overturned injunction
Although there is an obligation of confidentiality
when information that is surreptitiously obtained is
received, it did not apply here because LGM’s
processes were not necessarily private (although
hidden from public view)
Callinan J disagreed stating that ABC was a trustee
of such information which was owned by LGM
Terrapin Ltd v Builders' Supply Co (Hayes) Ltd [1967] RPC 375 at
391-2, Roxburgh J
“As I understand it, the essence of this branch of the law,
whatever the origin of it may be, is that a person who has
obtained information in confidence is not allowed to use it as a
spring-board for activities detrimental to the person who made
the confidential communication, and spring-board it remains
even when all the features have been published or can be
ascertained by actual inspection by any member of the public.
... It is, in my view inherent in the principle upon which the
Saltman case rests that the possession of such information must
be placed under a special disability in the field of competition in
order to ensure that he does not get an unfair start.”
Terrapin Ltd v Builders' Supply Co (Hayes) Ltd [1967] RPC 375 at
391-2, Roxburgh J
“As I understand it, the essence of this branch of the law,
whatever the origin of it may be, is that a person who has
obtained information in confidence is not allowed to use it as a
spring-board for activities detrimental to the person who made
the confidential communication, and spring-board it remains
even when all the features have been published or can be
ascertained by actual inspection by any member of the public.
... It is, in my view inherent in the principle upon which the
Saltman case rests that the possession of such information must
be placed under a special disability in the field of competition in
order to ensure that he does not get an unfair start.”
Can arise:
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By agreement (express or implied)
implied by the relationship between the
parties (eg, solicitor-client, doctor-patient,
employer-employee)
Implied based on the circumstances
Reasonable person test:
Coco v AN Clark (moped case)
A reasonable person standing in the shoes of
recipient of information would have realised
the information was disclosed for a limited
purpose
Limited Purpose Test (if given for a particular purpose, use limited to that
purpose):
Smith Kline & French v Sec Health
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SKF submitted chemistry, quality control and clinical trial information
relating to cimetidine compound for treatment of peptic ulcers marketed
as “tagamet”
Sec Health plan to use SKF to assess Alphapharm application for generic
drug
Sec Health neither know nor ought to have known of SKF limited purpose
– SKF did not direct attention to what else might be done subsequently
with the information when it furnished the data
Court not impute placing or acceptance of obligations which restrict
Sec’s discharge of functions under Regulations
TF Industrial Pty Ltd v Career Tech Pty Ltd [2011] NSWSC 1303
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recruitment database of client and candidate files
parties merged the two databases without discussing who
owned
over time, both parties used for own purposes and
incrementally added to database; no attempt to keep data
separate
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both parties had master password
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information could be freely used by defendants
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not imparted to them in circumstances importing an
obligation of confidence
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Former employee steals nectarine budwoods from
plaintiff’s orchard
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Genetic makeup of the budwoods was a trade secret
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Stolen information used to compete with the plaintiff
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“the thief is unconscionable because he plans to use
and does use his own wrong conduct to better his
position in competition with the owner, and also place
himself in a better position than that of a person who
deals consensually with the owner”
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Journalist plan to publish extracts from
Sharks legal advice relating to Sharks
breaches of NRL anti-doping policy
Rein J satisfied journalist report derived from
Sharks legal advice although not clear how
they received it
Rein J said duty of confidence because
journalist was aware that what they were
utilising was part of legal advice given by a
lawyer retained by the Club
Inadvertent disclosure of privileged documents during
discovery
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Error ascertained immediately and return of documents
requested; request refused
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Dispute goes all the way to the High Court
The High Court held there was no waiver of privilege in the
documents
“Proceedings of this kind and length concerning a
tangential issue should have been averted. There was no
need to resort to an action in the equitable jurisdiction of
the Supreme Court to obtain relief.”
Ashburton v Pape [1913] 2 Ch 469
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Ashburton’s solicitor received information from
Ashburton in confidence
Solicitor breached obligation to Ashburton by giving
information to Pape
Pape owed obligation to Ashburton even though no
direct relationship between Pape and Ashburton
Restrain the publication of confidential information
improperly or surreptitiously obtained
Wheatley v Bell
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Communications idea to find new customers
through indexing system
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W discloses to B in Perth; B set up business in
Sydney
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B breached obligation to W and disclosed to 2D
and 3D who paid for information
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2D and 3D knew or ought to have been aware of
confidence, so also bound by obligation of
confidence, even though paid money
SKF v Sec Health
Disputants not private parties and one is
Commonwealth officer who acts in discharge of
responsibilities placed on him by regulations
Gartside v Outram (1856) 26 LJ Ch 113
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Ex-employee disclosed wool brokers’ business records that disclosed that
brokers defrauded their customers
No confidence in an iniquity, can’t make me the confidant of a crime or a fraud
Castrol Australia v Emtech Associates (1980) 51 FLR 184
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Castrol gave TPC a report that contained test results and sought advice re
potential advertising. TPC agrees to keep information confidential but then tries
to use it in TPA proceedings against Castrol
Limited purpose test applied and also TPC could not show prima facie case
contrast Corrs Pavey v Collector Customs
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No public interest defence
Information no necessary quality of confidence because Alphapharm committing
civil wrong
Commonwealth v John Fairfax
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Govt defence papers incl East Timor, Iran Shah, Soviet navy in Indian sea, etc
Equitable principle has been fashioned to protect the personal, private and
proprietary interests of the citizen, not to protect the very different interests
of the executive government. It acts, or is supposed to act, not according to
standards of private interest, but in the public interest.
It is unacceptable in our democratic society that there should be a restraint
on the publication of information relating to government when the only vice
of that information is that it enables the public to discuss, review and
criticize government action
Court will determine the government's claim to confidentiality by reference
to the public interest. Unless disclosure is likely to injure the public interest,
it will not be protected
A-G (UK) v Heinemann Publishers Australia
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Publication of book “Spycatcher” by a former spy, Peter Wright; British
government alleged unauthorised use of secret information; Wright prevails;
now Official Secrets Act 1989 would prevent disclosure
Minister for Mineral Resources v Newcastle Newspapers
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No injunction in relation to publication of information as to advice re claims
against miners because govt could not show prejudice to public interest
National Roads and Motorists Association v Geeson
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Injunction sought against publication of information disclosed at an NRMA
Board meeting; relief not granted as director was not in violation of her
statutory duties in doing so; members have a right to know information
Lion Laboratories Ltd v Evans
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Intoximeter measures driver’s level of intoxication used in criminal prosecutions;
ex-employees disclosed Lion confidential documents that device was unreliable
Exceptional circumstances to disclose risk that people convicted for crime didn’t
commit
Fraser v Evans
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No injunction even if publication may be defamatory (public interest in truth
being out there and in fair comment)
Hubbard v Vosper
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Book critical of Scientology
Courses contain such dangerous material that it is in the public interest that it
should be made known
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LOCOG approached Atopia (NY design studio)
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“We devised a structure of petals on tall stems, which
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would travel from all of the participating countries,
then be brought into the stadium by children. The
petals would be assembled during the opening
ceremony to form a flower-like canopy, and distributed
back to the different nations after the Games."
Atopia's structure was designed to collect rainwater
and generate power from solar cells
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Locog has been disbanded, but its former design principle, Kevin
Owens, described the situation as "unfortunate". "Atopia really are
forward thinkers," he said. "Strands of their work became part of what
was taken forward, and I wish there was a way we could acknowledge
that."
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Owens said he had never seen images of their proposals, but that their
strong narrative must have "stayed in the psyche" of his colleagues, who
commissioned the opening ceremony.
“How Olympic cauldron fanned flames of fury at American design studio”
Guardian Australia online, 20 June 2013
http://www.guardian.co.uk/artanddesign/2013/jun/19/thomasheatherwick-accused-plagiarism-olympic-cauldron?CMP=ema_632
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Injunction
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Delivery up
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Discovery
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Constructive trust (Canada case LAC Minerals –
acquisition of mining land)
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Account of profits
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Quantum meruit
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Equitable compensation:
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Talbot – Millionaire tv show idea – equitable damages for
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Cadbury – Clamato case – misuse an equitable claim to be
equitable breach of confidence
decided on its own facts
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Co-exist with equitable duty – Optus v Telstra
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Common law duty: express or implied
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Equitable duty: implied term that employee will serve
employer with good faith and fidelity
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Del Casale v Artedomus – Isernia stone case – not a
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Byrne & Frew v Australian Airlines - test is whether an
“implication of the particular term is necessary for the
reasonable or effective operation of a contract of that
nature in the circumstances of the case”
sufficient trade secret (instead know-how) so
confidentiality should be in contract
Codelfa Construction Pty Ltd v State Rail Authority of
NSW (1982) 149 CLR 337
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At the time Codelfa contracted with the Authority to build
a railway, the parties assumed that Codelfa could work
around the clock
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Codelfa enjoined from working nights and Sundays
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High Court does not find an implied term that the
Authority would indemnify Codelfa against additional
costs because the term was not sufficiently obvious or
necessary (just one of many ways to resolve the issue had
the parties considered that Codelfa could have been
enjoined)
Maggbury v Hafele
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Parallel-opening foldaway ironing board hinge
M and H sign confidentiality deed, and M discloses idea to
H; negotiations break down
Information becomes public through patent
Common law doctrine of restraint of trade applied to
contractual restraints once information became public
High Court finds restraint clause unreasonable and
excessive because restraint prevented H from using
information in the public domain
Del Casale v Artedomus (Isernia stone case)
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contract of employment generally includes an implied
term imposing a duty of good faith on the employee
duty carries with it an obligation on the employee not
to divulge confidential information or to use it in a
way that could be detrimental to the employer
content of duty will vary according to the position of
the employee: generally, more senior employees,
having access to more confidential information, will
be subject to greater restraint than more junior
employees
Principles:
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An employee should be able to use accumulated
knowledge, skill and experience (ie “know-how”)
An employee “shall honestly and faithfully serve
his master; that he shall not abuse his confidence
in matters pertaining to his service, and that he
shall, by all reasonable means in his power,
protect his master’s interests in respect to matters
confided to him in the course of his service”
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Delivery routes
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Obligation extends to secret processes of manufacture such
as chemical formulae or designs or special methods of
construction and other information which is of a sufficiently
high degree of confidentiality as to amount to a trade secret
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Confidential information given to or acquired by the
employee while in his employment
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becomes part of the employee’s know-how which the
employee should be able to use after employment
ceases
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can’t prevent competition by preventing ex-employees
using their know-how
Factors that should be taken into account in determining whether a
particular item of information falls within a former employee’s duty
of confidentiality:
(a) The nature of the employment. Thus employment in a capacity
where ‘confidential’ material is habitually handled may impose a
high obligation of confidentiality because the employee can be
expected to realise its sensitive nature to a greater extent than if
he were employed in a capacity where such material reaches him
only occasionally or incidentally.
(b) The nature of the information itself. In our judgment the
information will only be protected if it can properly be classed as a
trade secret or as material which, while not properly to be
described as a trade secret, is in all the circumstances of such a
highly confidential nature as to require the same protection as a
trade secret eo nomine.
Summary:
NO trivial information
NO publicly available information
NO confidential information that is part of an
ex-employee’s know-how
YES highly confidential trade secrets
There is a category of information that an employee must
treat as confidential but which, once learned, necessarily
remains in the head of the employee and becomes part of his
own skill and knowledge. While that information may have
been acquired in the course of the employer’s business, the
employee will be allowed to use his full skill and knowledge
for his own benefit, even in competition with his former
employer after he leaves that employment. Such information
is often referred to as "know how", being the skill and
knowledge that an employee gains during the course of his
employment, which is not capable of protection in favour of
the employer.
Printers and Finishers Ltd v Holloway
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numerous practical details of a technical process
called flock printing
Know how - was knowledge a “separate part of the
employee’s stock of knowledge which a man of
ordinary honesty and intelligence would recognise
to be the property of his old employer”?