FEDERAL COURT OF AUSTRALIA

Allen House Mirror & Glass Pty Ltd v Hamilton [2012] FCA 464

THE COURT ORDERS THAT:

Upon the applicant, through its counsel, giving the usual undertaking as to damages:

1.    Order, until further order, that each of the respondents, whether by themselves, their servants, agents or otherwise, be restrained from reproducing, publishing or communicating to the public the following works:

1.1    Original sketches provided by Allen House to Anthony Hamilton (“Original Sketches”);

1.2    All designs and computerised drawings developed from the Original Sketches, whether in electronic or hard copy form including hardcopy designs with handwritten annotations, including the designs set out in Exhibit B in these proceedings (“Further Works”); and

1.3    Confidential Exhibit C in these proceedings.

2.    Order, until further order, that each of the respondents, whether by themselves, their servants, agents or otherwise, be restrained form using or disclosing:

2.1    the Original Sketches;

2.2    the Further Works;

2.3    Confidential Exhibit “C”;

2.4    all moulds made or otherwise produced by the respondents, or any one of them, for the applicant;

2.5    the design of the aluminium head track of the Slyder shower screen unit; and

2.6    the design of the concealed rollers in the sliding doors of the Slyder shower screen unit.

3.    Service on the respondents of the Originating Application, accompanying affidavit of Allen House, Confidential Exhibit C, Exhibit B, these sealed orders be effected by 10 pm on 4 May 2012 by email to the respondents’ email address being info@alnoproductsservices.com.au with notification to Mr Hamilton of such service by text message.

4.    Service of the documents referred to in 3 above also to be effected by delivery to the respondents’ work address at 4/10 Greves Close West Gosford NSW 2250 by 12 noon on 5 May 2012.

5.    Confidential Exhibit C is to be kept confidential and is not to be disclosed.

6.    The proceedings be stood over until 9:30 am on Tuesday 8 May 2012 before the Duty Judge.

Note:    Entry of orders is dealt with in Order 39.32 of the Federal Court Rules 2011. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1    The applicant applies ex parte for interlocutory orders restraining each of the respondents from reproducing, publishing or communicating to the public certain works, which can generally be described as drawings and other artistic works, and restraining the respondents from using or disclosing the drawings, other artistic works and injection moulds made or produced by the Respondents. The moulds were apparently made or produced in accordance with the drawings, utilising information said by the applicant to have been conveyed in circumstances importing an obligation of confidentiality. The drawings and other artistic works are also said to have been be created or conveyed in circumstances importing an obligation of confidentiality.

2    Mr House is a director of the applicant company, which trades in the glazing industry. Mr House is an Australian citizen and resident in Australia. HBD Industries Pty Ltd (HBD), the second respondent, is, generally speaking, associated with the first respondent, Mr Hamilton. HBD has registered the business name Alno Product Services (Alno).

3    Mr House says that the applicant has previously developed certain designs of shower screen and that he has developed a frameless shower screen called, “the Slyder”. He says that the applicant’s operations include the development of the Slyder product. Mr House says that he had dealings with the respondents, in relation to the production of the Slyder. He says that in about 2008, the applicant engaged the respondents to produce moulds that would allow for the initial production run of the Slyder.

4    Mr House says that he initially developed the design for the Slyder in the drawings, a series of rough sketches which he provided to Mr Hamilton. In summary, further drawings of the Slyder and of the moulds needed to produce the components of the Slyder were jointly produced by Mr House and Mr Hamilton using the CAD system on Mr Hamilton’s computer. Copies of CAD drawings, said by Mr House to have been developed by Mr Hamilton and himself at different stages, are a confidential exhibit in these proceedings. Mr House asserts confidentiality in the drawings and in the CAD drawings and has outlined in his affidavit the extent to which the drawings were disclosed. He says that they were only shown to Mr Hamilton and to Mr House’s wife.

5    Mr House also says that he said to Mr Hamilton that, ‘[t]he shower screen is patent pending’ and ‘I would like to keep all the information between you and me.’ A patent granted to the applicant was published in 2006. Mr House says that elements of the drawings were not disclosed in the patent. Based on the drawings, the applicant then engaged Alno to produce a series of injection moulds in order to produce the components of the Slyder.

6    There is a dispute between the parties as to the injection moulds themselves. Mr House asserts that they were defective. As a result, the applicant has refused to pay certain moneys representing the balance of the contract price for the supply of the moulds and the respondents have attempted to claim those moneys. HBD has served a statement on the applicant claiming the sum of $11,012.38. The applicant has continued to refuse to pay those moneys. No proceeding has been commenced to date concerning this dispute for payment of moneys.

7    On 30 April 2012 Mr House received a text message from Mr Hamilton in the following terms:

Allen you have 7 days to pay your account in full … Failure to pay your account in the specified time frame will result in Chinese exporting to the world the slider design Anthony Hanilton (sic)

8    Subsequent text messages were received on 1 and 2 May 2012 saying ‘6 days’ and ‘5’ respectively.

9    Mr House caused a letter to be sent on 2 May 2012 by its patent attorneys to Alno, asserting ownership of the copyright in the artistic works which are the drawings of extruded products to be reproduced by moulds. The letter refers to the commercial dispute between the parties and demands the return of all copies of the drawings prepared by Mr House. It states that if the drawings are not returned, Mr House would commence an action for copyright infringement and recovery of the drawings. Immediately following the sending of that letter by email, Mr House received a text message from Mr Hamilton saying ‘Ha, ha, ha, ha, LOL’ and a further text message stating ‘4’.

10    Mr House says that he is concerned that his business will suffer financial harm if there is any disclosure of the confidential information. As he has not yet commercialised the Slyder design, he is concerned that access to the drawings by competitors would have a negative commercial impact on his company.

11    On the basis of the evidence before me, I am satisfied that the applicant has established a prima facie case of ownership of copyright in the artistic works, being the preliminary sketches, and joint ownership of the CAD drawings. There has not been any apparent denial in the text messages from the respondent of the applicant’s rights. If that evidence is not contradicted, then the applicant has a likely prospect of success in restraining breaches of that copyright. While Mr Hamilton may claim joint ownership in the CAD drawings, there is authority for the proposition that a joint owner of copyright in a work may not do or authorise an act comprised in the copyright in a work without the license of the other joint owners (Prior v Sheldon (2000) 48 IPR 301 per Wilcox J at [79], applied by Lindgren J as a member of the Full Court in Seven Network (Operations) Ltd v TCN Channel Nine Pty Ltd (2005) 146 FCR 183 at [20]). Mr House has made it clear that has not given such a license to Mr Hamilton.

12    Accordingly, I am satisfied that there is a sufficiently strong prima facie case that the proposed use or copying of the artistic works by Mr Hamilton would represent an infringement of Mr House’s rights.

13    In addition, Mr House claims a breach of confidential information, not only in the CAD drawings already referred to, but also in further sketches that he gave to Mr Hamilton and further CAD drawings developed in relation to those sketches which he says were similarly given under conditions of confidentiality. While those sketches and drawings have not been tendered in these proceedings, they are identified by Mr House as the design of the aluminium head track of the slider shower screen unit and the design of the concealed rollers in the sliding doors of the slider shower screen unit.

14    I am satisfied that the applicant has made out a prima facie case of threatened disclosure of confidential information. He has been able to identify the information with a satisfactory degree of specificity. The evidence does establish, at a prima facie level, the necessary quality of confidentiality. Mr House asserts that the information is not common or public knowledge. On the basis of his evidence, the information was received by Mr Hamilton in circumstances that import an obligation of confidence. There is certainly an actual threat to misuse that information without Mr House’s consent, as evidenced in the text messages sent by Mr Hamilton (see generally Smith Kline & French Laboratories (Australia) Ltd v Secretary, Department of Community Services and Health (1990) 22 FCR 73 at 87).

15    While there has been some delay between the first text message from Mr Hamilton and Mr House bringing this application, Mr House has explained what has happened in the meantime. Mr House instructed his patent attorney first to send a letter by email to the respondents setting out the applicant’s concerns and asserted rights. This email was sent on 2 May 2012. Apart from the text message, there does not seem to be any other response from Mr Hamilton to that letter.

16    The applicant proffers the usual undertakings to damages.

17    The applicant’s proposal is that this matter be returned in a matter of two working days from today. There is a threatened use of the drawings, moulds and information by the respondents. There is no evidence as to likely damages to be suffered by the respondents. On the other hand, the applicant has explained potential damage to it that would be irrevocable if, indeed, this information is confidential and were to be disclosed by the respondents. It follows that the balance of convenience over a weekend and for the two working days favours the applicants. I am satisfied that it is appropriate to make orders in the interim restraining the respondents from infringing the applicant’s copyright in the works and to restrain the respondents from disclosing the confidential information identified.

Associate:

Dated:    9 May 2012