Simpsons Solicitors

Data caught?

July 18th 2016

A decision has been handed down in an interesting and factually complex case in the Federal Court. It involves a falling out between a father and son, allegations of copyright infringement in relation to software and databases, breach of confidentiality, breach of fiduciary duty and allegations of “industrial theft”.

After the falling out between the father and son, the son was involved in setting up a company in the same line of business as the father ­– providing information about tenants and their tenancy history to potential landlords. Two former employees of the father’s business were also involved in that enterprise.

In cases involving software and databases, whether or not a copyright infringement claim is successful will hinge on whether there has been actual copying (that is, a “causal link”) and whether a “substantial part” of the relevant copyright material has been used by the person or company that has allegedly infringed. In this case, however, the judge found that the amount of code copied was “trivial from a quantitative point of view”. He also noted that the applicant had not attempted any functional analysis of what had been copied (an important point if they were going to prove that was copied was qualitatively “substantial”.

However, the son and one of the former employees were liable for taking usernames and passwords from the father’s company ­and using some of them in setting up the new business ­– this was in breach of their obligations to the father’s company as former “officers” and – in the case of the son – a former director of that company (and based on provisions of the Corporations Act).

A number of important practical lessons can be drawn from the case ­– in particular, how careful people need to be if they are setting up in business in competition with a company they’ve worked for in the past, to make sure there is a clean break and they don’t use information or data taken from that former company.

The case is TICA Default Tenancy Control Pty Ltd v Datakatch Pty Ltd [2016] FCA 815 (15 July 2016), and is available at:

http://www.austlii.edu.au/au/cases/cth/FCA/2016/815.html

If you would like advice on copyright or confidential information issues, contact copyright lawyer Adam Simpson or Ian McDonald (Special Counsel) at Simpsons Solicitors.