A former employee of a travel company was recently held liable for having infringed copyright in his former employer’s material. The travel company, however, failed in most of its claims (based on contract and confidential information) – with important consequences as to whether or not, in the end, it will get sufficient damages to have really made taking the action worthwhile. The case is a good reminder of how – if you engage people to work for you – you need to make sure that you take appropriate steps to secure ownership of material and that you have clear contracts with those people. It’s also a good reminder (given how expensive litigation can be) that if you move from one company to another, or decide to start working on your own – you will usually have to take care not to use material you either created for your previous employer or that you used as part of your job.
The facts in this case are fairly complicated, but in a nutshell, just after leaving university, Tom started working as a recruiter co-ordinator for a travel company that ran travel programs. These programs were largely aimed at students wanting to spend time overseas doing volunteer work – hence the company’s name, “Volunteer Eco Students Abroad Pty Ltd”. After a short period, Tom moved into an “associate marketing director” position with Volunteer Eco, the contract for which was formed by a number of oral discussions and emails.
As part of his job, Tom co-ordinated the development of various logo designs and advertising tag-lines for the company by an independent design company. To get feedback on this process, Tom brought his father Peter in to give him some help. Tom also emailed a number of other business documents to his father, to get his advice.
After a time, various tensions arose between Tom and Volunteer Eco, and he left.
Shortly after, Tom set up a new business – “Reach Out Volunteers Pty Ltd” – with his brother, Ben, and his father, Peter. This new business also ran volunteer tours for students.
Volunteer Eco became concerned that Tom and Reach Out were using its material (including confidential information) and that it was using a logo and tag-lines very similar to the ones that had been designed for it by the design company.
Most of Volunteer Eco’s claims failed. In particular:
- Tom did not breach any obligations of confidentiality to Volunteer Eco;
- Tom was not in breach of any other implied employment obligations or any fiduciary duty (including, for example, that he had failed to give sufficient notice or failed to train his replacement);
- Volunteer Eco did not establish that it owned copyright in a number of the materials that were in issue (including the logo);
- Volunteer Eco did not establish that copyright subsisted in any of the tag-lines;
- the court found that some of the behaviour and statements from Reach Out that Volunteer Eco complained about was not “misleading or deceptive” (for example, a number of email statements were mere advertising puffery, while in other cases, the context as a whole in relation to the relevant conduct would not in fact have misled or deceived anyone); and
- the court found that Volunteer Eco had not established either that various uses of Google adwords or of metatags relating to Volunteer Eco had either been used by Reach Out or had misled or deceived anyone.
However, Volunteer Eco did establish that:
- Tom had infringed copyright by copying various materials onto a USB (and that this was not a “fair dealing” for the purpose of legal advice);
- Reach Out had infringed copyright by copying a “substantial part” of a set of “FAQ’s”; and
- Reach Out had misled or deceived the public in some aspects (including by pretending to have more experience of running travel programs that it really did).
While at the time of this judgement Volunteer Eco had yet to elect what remedies to apply for as to the copyright infringements, the court did find that additional damages would not be available (it did not view any of the infringements as so egregious that they had to be punished), and the court also held that no damage had been established for the various breaches of the Trade Practices Act (including in relation to the misleading and deceptive conduct).
First, if you are engaging someone or you are doing work for someone else, it’s always best in the long run for everybody – whatever deal you cut – to ensure you have everyone’s obligations and rights set out in writing and agreed on in a signed document at the start of the relationship or at the start of every new phase of a relationship.
Second, if you do leave one job or position to set up in a rival business, you need to be absolutely scrupulous in not using or basing anything on material you might have acquired while in your old position – it’s always best to start completely from scratch each time using materials in which you or (with permission) a known third party owns rights. In these cases, you may also need advice as to what sort of obligations you may still owe a previous employer, even after you leave.
The case (Volunteer Eco Students Abroad Pty Ltd v Reach Out Volunteers Pty Ltd) is available at: http://www.austlii.edu.au/au/cases/cth/FCA/2013/731.html
If you need advice on how copyright may apply to work created by employees or by you as an employee, or if you need advice in drafting or negotiating service agreements relating to copyright material, contact Adam Simpson, copyright lawyer or Ian McDonald (Special Counsel, Copyright) at Simpsons Solicitors.