Federal Court of Australia
Key Logic Pty Ltd v Sun-Wizard Holding Pty Ltd  FCA 208
QUD 607 of 2017
Date of judgment:
INTELLECTUAL PROPERTY – consideration of an appeal from the delegate of the Registrar of Designs revoking the registration of a design for application to a product called a “solar bollard” – consideration of whether the Registered Design lacked newness and distinctiveness having regard to the prior art base – consideration of whether the publication of emails to a group or cohort described as the Certified Installer Network amounted to a publication of the visual features of the design – consideration of whether members of the cohort fell under an obligation of confidence such that any publication of the visual features of the design to that group was not a publication of the design
Designs Act 2003 (Cth), ss 5, 6, 7, 8, 15, 16, 19, 65 and 68
Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd  VR 37
Australian Medic-Care Co Ltd (a company incorporated in Hong Kong) v Hamilton Pharmaceutical Pty Ltd (2009) 261 ALR 501
Coco v AN Clark (Engineers) Ltd  86 RPC 41
Key Logic Pty Ltd and Another v Blue Groper Investments Pty Ltd and Others (2019) 367 ALR 507
LED Technologies Pty Ltd v Roadvision Pty Ltd and Another (2012) 199 FCR 204
Review 2 Pty Ltd (in liq) and Another v Redberry Enterprise Pty Ltd (2008) 173 FCR 450
Saltman Engineering Co Ltd and Others v Campbell Engineering Co Ltd (1948) 65 RPC 203
RLA Polymers Pty Ltd v Nexus Adhesives Pty Ltd and Others (2011) 280 ALR 125
National Practice Area:
Copyright and Industrial Designs
Number of paragraphs:
Date of last submission/s:
26 July 2019
23 May 2019
Solicitor for the Appellant:
Bennett & Philp Lawyers
Counsel for the Respondent:
Ms S Gatford
Solicitor for the Respondent:
DATE OF ORDER:
THE COURT ORDERS THAT:
1. The appeal from the decision of the delegate of the Registrar of Designs given on 17 October 2017 is allowed.
2. The decision of the Registrar’s delegate is set aside.
3. The parties file and serve written submissions as to the question of costs within 14 days.
1 These proceedings are concerned with an appeal under s 68(6) of the Designs Act 2003 (Cth) (the “Act”) from a decision of the delegate of the Registrar of Designs (the “Registrar”) revoking the registration of a design for application to a product called a “solar bollard”: Design No. 201012310; Registration AU332890 S.
2 The Registered Design reveals the overall appearance of the product resulting from aspects of the shape, configuration, pattern and ornamentation of the product by means of seven “Large Scale Representations”. The copy of the Registered Design in the Court Book for the hearing (including the seven representations) is not as clear as it might be. The appellant in these proceedings, Key Logic Pty Ltd (“Key Logic”), which is the current owner of the Registered Design by assignment from the original applicant and original registered owner, Exlites Pty Ltd (“Exlites”), has invited the Court to examine the representations of the design online on the Registrar’s website in order to see the representations with digital clarity.
3 The respondent, Sun-Wizard Holding Pty Ltd (“Sun-Wizard”) suggests caution in taking that approach as ultimately it may not be entirely clear which materials have been examined by the Court.
4 The decision of the Registrar’s delegate contains clear reproductions of the seven representations. I also have the benefit of Exhibit 24 which is the tendered Design Registration with the seven representations. The “data” is current as at 16 May 2019 and the representations (if they were to be viewed online) invite the viewer to “Click on each image for larger view”. I assume that the Large Scale Representations in the Court Book emanate from that process. For the purposes of resolving these proceedings, I rely upon the examples of the images in the delegate’s decision together with the images contained in the registration (at Court Book pp 33-39 which are also at Court Book pp 287-293) and Exhibit 24. The examples are set out below together with a number which has been added to each image to identify the order of each representation in the Design Registration as it appears in the Court Book and Exhibit 24:
5 Although s 68(6) of the Act provides that an “appeal” lies to this Court from the Registrar’s decision (as made by the delegate), the proceeding engages an exercise of the Court’s original jurisdiction in proceedings invoking an exercise of judicial power. There is no sense in which the Court is engaged in a “rehearing” for the purpose of the “correction of error” on the part of the Registrar’s delegate, in any sense which bears the analogical characterises of an exercise of the Court’s appellate jurisdiction. The proceeding is a hearing de novo on the evidence adduced in the proceeding. In this case, apart from the affidavit and oral evidence adduced in the proceeding, leave has been given for the parties to also rely on the declarations put before the Registrar’s delegate.
6 Of course, the question the Court has to decide for itself de novo is the same question the Registrar’s delegate was called upon to decide, that is, whether a ground for revocation of the Registered Design exists on the s 65(2)(a) footing contended for by Sun-Wizard that “the design is not a registerable design”. The content of that ground engages considerations arising under ss 5, 6, 7, 8, 15, 16 and 19 of the Act, mentioned later in these reasons. The Court will have regard to the reasons of the Registrar’s delegate, in this case the reasons of the delegate, Mr Robert Wilson.
7 As to the evidence, I have had the benefit of reviewing the transcript of the proceedings in the context of the cross-examination of the principal witnesses, namely, Mr Michael Arieni concerning his declaration dated 5 September 2016 and his affidavits of 8 February 2018 and 3 May 2018; Mr Ian Fry concerning his declarations of 17 June 2016 and 11 May 2017 and his affidavit of 9 April 2018; Mr Earl Palfrey’s declaration of 17 June 2016; and the affidavits and cross-examination of Mr Adrian Kedwell and Mr Peter West. I have, of course, considered the remaining evidence. I have also noted the lengthy initial discussions at the outset of the hearing about objections to evidence.
8 Before examining the particular questions to be resolved in the proceedings and the role of the principal witnesses, the following matters concerning the design, the registration of the design and the relevant provisions of the Act, ought to be noted.
9 Exlites filed an application under the Act in respect of the design on 7 June 2010 (the “Priority Date” for the design).
10 Exlites was incorporated on 22 October 2003 under a particular name. It then changed its name to another name and then to Exlites on 20 July 2006. The company was deregistered on 3 December 2014. Mr Arieni was a director of Exlites from 22 October 2003 until the date of deregistration. Mr Fry became a director of Exlites on 25 January 2010 and ceased to be a director on 22 March 2013. Aspects of the arrangements under which Mr Fry became a director of Exlites and ceased to be a director are considered later in these reasons.
11 The design was registered in the name of Exlites on 24 September 2010. Mr Arieni is the person who created the design, that is, he is the “designer” for the purposes of s 13 of the Act.
12 The design was certified on 13 January 2012.
13 On 15 November 2013, an administrator was appointed to Exlites. That administration of Exlites ceased on 19 December 2013 and on that date a liquidator was appointed to the company. The liquidation came to an end on 3 September 2014. It seems that shortly after Mr Fry’s resignation as a director of Exlites, meetings of directors of both Exlites and Key Wholesalers Pty Ltd (“KWPL”) were held at which resolutions were passed for the sale of the intellectual property of Exlites to Key Logic: Key Logic Pty Ltd v Blue Groper Investments Pty Ltd (2019) 367 ALR 507, Derrington J at . The Statement of Agreed Facts recites that ownership of the Registered Design was transferred from Exlites to KWPL by a Deed of Assignment dated 27 March 2013 and by KWPL to Key Logic by a Deed of Assignment dated 14 July 2014. The assignment to Key Logic was recorded on the Register on 14 July 2014.
14 Both KWPL and Key Logic are companies controlled by Mr Arieni.
15 On 16 February 2015, Sun-Wizard made a request under s 63 of the Act that the Registrar “examine the design”. Such a request may contain material in relation to the “newness and distinctiveness of the design”: s 64(2). Having received the request, the Registrar was required by s 65(1) of the Act to consider whether a “ground for revocation” existed under s 65(2) of the Act. Section 65(2) provides, relevantly for these proceedings, that a “ground for revocation of the registration of a design” is that “the design is not a registrable design”: s 65(2)(a).
16 On 17 October 2017, the delegate published his decision. The delegate concluded that an email sent by Mr Arieni on 3 May 2010 addressed to “all Exlites Associates” attaching a “pre release data sheet on the new 2010 solar bollard” containing an image of an “Exlites Solar Bollard” (otherwise described as the “New 2010 GENII”) had the effect of publishing the design the subject of the application prior to the Priority Date. That followed for the delegate because the communication of the email was said not to be confidential, that is, the addressees to whom the email was sent were said to be under no obligation of confidence concerning that communication. On that view, the non-confidential publication of the design meant that the design formed part of the prior art base before the Priority Date and was neither new nor distinctive at the Priority Date.
17 As to the statutory framework relevant to these proceedings, the following additional matters should also be noted.
18 A “design” in relation to a product means the overall appearance of the product resulting from one or more visual features of the product: s 5. A “visual feature” in relation to a product “includes” the shape, configuration, pattern and ornamentation of the product: s 5; s 7(1). A visual feature may, but need not, serve a functional purpose: s 7(2). A reference in the Act to a “design” is a reference to a design in relation to a product: s 8. A thing that is manufactured or handmade is a product: s 5; s 6(1).
19 A design is a “registrable design” if the design is “new and distinctive” when compared with the “prior art base” for the design as it existed before the priority date of the design: s 15(1). The prior art base for a design consists of, among other things, designs publicly used in Australia and designs published in a document within or outside Australia before the priority date: s 15(2)(a) and (b). A design is “published” in a document if the design is disclosed to the public in a printed document or other publication such as an email, brochure, information sheet and other such material.
20 A design is “new” unless it is “identical” to a design that forms part of the prior art base for the design (s 16(1)), and a design is “distinctive” unless it is “substantially similar in overall impression” to a design that forms part of the prior art base for the design: s 16(2).
21 As to the factors to be taken into account in assessing whether the design is substantially similar in overall impression to a design forming part of the prior art base, s 19 provides as follows:
19 (1) If a person is required by this Act to decide whether a design is substantially similar in overall impression to another design, the person making the decision is to give more weight to similarities between the designs than to differences between them.
(2) The person must also:
(a) have regard to the state of development of the prior art base for the design; and
(b) if the design application in which the design was disclosed included a statement (a statement of newness and distinctiveness) identifying particular visual features of the design as new and distinctive:
(i) have particular regard to those features; and
(ii) if those features relate to only part of the design – have particular regard to that part of the design, but in the context of the design as a whole; and
(c) if only part of the design is substantially similar to another design, have regard to the amount, quality and importance of that part in the context of the design as a whole; and
(d) have regard to the freedom of the creator of the design to innovate.
(3) If the design application in which the design was disclosed did not include a statement of newness and distinctiveness in respect of particular visual features of the design, the person must have regard to the appearance of the design as a whole.
(4) In applying subsections (1), (2) and (3), the person must apply the standard of a person who is familiar with the product to which the design relates, or products similar to the product to which the design relates (the standard of the informed user).
(5) In this section, a reference to a person includes a reference to a court.
22 As to s 19(2)(b), the statement of newness and distinctiveness filed in support of the design application recites that “the entire design is new and distinctive” and thus no particular visual features of the design are identified which means that the Court must have regard to the appearance of the design as a whole as if the Court were in the position contemplated by s 19(3) of the Act. In deciding whether the Registered Design is substantially similar in overall impression to another design, the Court applies the standard of the informed user as described in s 19(4).
23 As to that standard, Kenny J expressed these observations in Review 2 Pty Ltd (in liq) v Redberry Enterprise Pty Ltd (2008) 173 FCR 450 at  affirmed by the Full Court in LED Technologies Pty Ltd v Roadvision Pty Ltd (2012) 199 FCR 204, Besanko J at , Mansfield and Flick JJ agreeing at  and  respectively:
In summary, the standard of the informed user is an objective one. In this case, the assessment must be that of a user of ladies’ garments, which would include a potential purchaser, either in retail sales (such as a buyer for a fashion store) or at the ultimate consumer level. A designer or manufacturer of ladies’ garments is not, on account of design or manufacturing knowledge alone, an informed user. The notional user must be informed, in the sense that the user is familiar with ladies’ garments. The informed user is not an expert, but must be more than barely informed. The focus for consideration is on eye appeal and not on internal or less visible manufacturing features.
24 On 6 November 2017, Key Logic lodged (filed on 10 November 2017) a Notice of appeal. It is not necessary to set out the precise content of the grounds identifying contended error on the part of the delegate in reaching his decision on the material then available to the delegate. Rather, the questions to be answered in this proceeding are set out shortly. On 13 December 2017, Sun-Wizard filed a Notice of Contention. An Amended Notice of Contention was filed on 3 April 2019. Again, the issues raised by the amended notice are addressed in the questions to be resolved as set out below.
25 In answering the question identified at  of these reasons, the following questions arise.
26 First, is the Registered Design neither new nor distinctive at the Priority Date when compared with the prior art base as it existed before the Priority Date having regard to the following contended prior art:
(a) (i) the solar bollards as disclosed on the Exlites webpage visible to the public on the Exlites website on 18 July 2008;
(i) the solar bollards disclosed in an Exlites brochure published on 18 July 2008;
(ii) the solar bollard described as the Exlites “‘NEW 2009 MODEL’ Solar Bollard & AC Bollard” displayed on an Exlites webpage dated 2 February 2009;
(iii) a webpage on the Exlites website on 22 October 2009 under the heading “Solar Bollards ‘2009 Model Currently Available’: Limited Stock Coming Soon ‘GENERATION II’ Solar Bollards January 2010”, displaying solar bollard pole designs including particular light heads;
(iv) a webpage on the Exlites website on 10 May 2010 under the heading “Exlites core products are ‘Australian Designed, Manufactured and Owned’”, displaying solar bollards at night exhibiting light dissipating from the light heads under the sub-heading “New 2010 GENII Solar Bollard” (all such material at (a)(i) to (v) is otherwise described as Exhibits IF-1 to IF-5 inclusive of the declaration of Mr Fry dated 17 June 2016 at ground 1(b) of the Amended Notice of Contention);
(b) an email dated 21 April 2010 attaching a document bearing the title “Exlites New Bollard Comparison V2”, addressed “To All” as sent to Mr Palfrey by Mr Arieni;
(c) an email dated 3 May 2010 attaching a document bearing the title “Exlites Solar Bollard 2010 ‘Australian Made’ Global Design” addressed: “To All Exlites Associates” as sent by Mr Arieni to Mr Palfrey.
27 As to the GENI design, Key Logic does not dispute that the Exlites GENI design forms part of the prior art base. Sun-Wizard contends that the images of solar bollards in the material described at (a) of these reasons are, or may very well be, an image of the GENII solar bollard (all published before 7 June 2010), although Mr Fry accepts in his affidavit of 9 April 2018 at para 37(a) and (b) that the documents he describes as the Exlites 2009 catalogue and the Exlites 2010 catalogue (which he says corresponds to IRF-4 and IRF-5) contain photographs of the GENI solar bollard and not the GENII solar bollard. To the extent that any image in the material at (a) is an image of the GENI design, Sun-Wizard says that the GENI design renders the GENII design neither new nor distinctive. In these reasons I will first examine the newness and distinctiveness of the Registered Design when compared with the GENI design. I will then return to the material at (a) of these reasons, later in these reasons.
28 Key Logic contends that the Registered Design is new and distinctive when compared with the GENI design, fundamentally because the Registered Design is said to exhibit a significantly different visual feature which is absent from the GENI design, being the shape of the conical diffuser (described by Mr Fry in his evidence as the conical-shaped reflector (Trial Day 3, T, p 24, lns 40-45; T, p 25, lns 1-12; on Day 3 the Transcript resets the numbering). A second visual feature is the shape of the outer casing of the Registered Design, although the conical shaped diffuser is said by Key Logic to be the most significant difference between GENI and the Registered Design. Mr Fry, in the transcript passages quoted above, accepts that Mr Arieni is the designer of both features.
29 Key Logic’s contention is that the conical shaped diffuser is a visual feature of the Registered Design which appeals to the eye and which renders the Registered Design “new” as the feature is absent from the GENI solar bollard design. Key Logic also contends that the Registered Design is “distinctive” because it is not substantially similar in overall impression to the design of the GENI solar bollard by reason of both the visual feature of the shape of the conical diffuser and the visual feature of the shape of the outer casing of the Registered Design for the GENII solar bollard, as depicted in the Registered Design.
30 In the Statement of Agreed Facts, Key Logic accepts that the designs illustrated in the attachments to the emails of 21 April 2010 and 3 May 2010 include representations of the Registered Design.
31 The second question that arises in the proceeding is whether, assuming that the features of shape identified by Key Logic otherwise render the Registered Design new and distinctive, the Registered Design is neither new nor distinctive because the emails of 21 April 2010 and 3 May 2010 together with the attachments resulted in the Registered Design being published in a document within Australia prior to the Priority Date.
32 Key Logic contends that the Registered Design was not “published” by the transmission of the emails because Mr Palfrey and those Exlites associates who received the email did not receive it in their capacity as members of the public but rather received it in their capacity as members of a group with a special commercial relationship or prospective commercial relationship with Exlites which gave rise to an obligation of confidence such that the confidentiality of the disclosure of the Registered Design to those persons was subject to that obligation. Key Logic contends that that being so, the Registered Design was not published prior to the Priority Date.
Question of the onus
33 Counsel for Key Logic submits that this is the first proceeding to come before the Court under s 68(6) of the Act and thus there are no authorities that address the question of the onus of proof in such a proceeding.
34 Accordingly, the issue of onus must be addressed essentially from first principles within the statutory framework already discussed aided by authorities on appeal provisions that might be thought to provide analogical guidance.
35 Because the question the Court is called upon to decide for itself de novo (on the totality of the evidence put before the Court in the appeal proceeding) is the same question the Registrar’s delegate was called upon to decide, that is, whether a ground of revocation exists on the s 65(2)(a) footing contended for by Sun-Wizard that the design is not a registrable design (in calling upon the Registrar under s 63 of the Act to “examine the design” as registered on 13 January 2013), Sun-Wizard continues to be the party agitating the contention that the design is not a registrable design.
36 That being so, Sun-Wizard bears the onus of demonstrating on the balance of probabilities that the design is not a registrable design.
37 In other words, it must make good that case.
38 Moreover, s 68(1)(a) of the Act provides that the Registrar must be satisfied that a ground for revocation of the registration of the design has been made out before revoking the design and in circumstances where the request under s 63 may contain material in relation to “newness and distinctiveness of the design” (s 64(2)), the requestor bears the burden of satisfying the Registrar that a ground exists for revocation. That burden remains the burden falling upon Sun-Wizard except that it must satisfy the Court in the course of a de novo hearing that a ground of revocation exists on the basis, in this case, of the declarations and fresh affidavit material.
39 Although the appeal under s 68(6) is brought before the Court by Key Logic, the circumstance that the moving applicant is Key Logic does not dictate the consequence that it bears the onus of proving that the design is new and distinctive. The truly moving party is Sun-Wizard which must, once the subject matter of the question agitated by it before the Registrar is removed into the Court by operation of s 68(6), make good a ground for revocation of the design which in this case is the s 65(2)(a) ground that engages the other provisions of the Act described at  to  of these reasons. It also engages the material described at  of these reasons, subject to what follows at  to . It seems to me unnecessary to examine authorities that address appeal provisions in the Trade Marks Act 1995 (Cth) or challenges to pre-grant oppositions under the Patents Act 1990 (Cth) that might be thought to provide analogical guidance. The proper approach to the provisions in question begins and ends with the particular text in question.
40 In this proceeding, the application of these principles to the grounds of revocation results in the following onus falling on the parties respectively.
41 As to the ground of revocation on the footing that the design of the GENI solar bollard within the prior art base or any of the material at (a) of these reasons renders the Registered Design other than a registrable design, Sun-Wizard bears the onus.
42 As to the ground that the emails and attachments described at (b) and (c) render the Registered Design other than a registrable design, Key Logic has conceded that the attachments to the emails disclose the design prior to the Priority Date but contends that the design was not “published” by either email for the reasons described at  of these reasons. Key Logic bears the onus of demonstrating that matter, that is, that in the circumstances an obligation of confidence arose.
Is the Registered Design rendered neither new nor distinctive and thus not a registrable design when compared with the GENI design forming part of the prior art base?
43 The answer to that question falls to be determined by whether the design is “new” and “distinctive” when compared with, relevantly here, the design of the GENI solar bollard.
44 As to distinctiveness, the question is whether the Registered Design is substantially similar in overall impression to the design of the GENI solar bollard. In determining that question, the Court is required to give more weight to similarities between the GENI design and the Registered Design (s 19(1)); have regard to the state of development of the prior art base for the Registered Design (s 19(2)(a)); if only part of the Registered Design is substantially similar (in overall impression) to the GENI design, the Court must have regard to the amount, quality and importance of that part in the context of the design as a whole (s 19(2)(c)); have regard to the freedom of Mr Arieni (the creator) to innovate (s 19(2)(d)); have regard to the “appearance of the design as a whole” (since the statement of newness and distinctness does not identify any particular visual features (s 19(3)); and, finally, the Court must, in considering each of these factors, apply the standard of the informed user (s 19(4); see also  of these reasons).
45 The evidence in the proceeding on this topic of newness and distinctiveness of the Registered Design when compared with the GENI design is given by Mr Arieni, Mr Fry and Palfrey. The evidence needs to be put in context.
46 As to Mr Arieni’s evidence, he is the managing director of Key Logic and KWPL. Key Logic was formerly the sole shareholder in Exlites and is now the sole shareholder in KWPL.
47 Mr Arieni says that he and three friends established Key Logic in 2003. They began working in the lighting and water sectors of industry supporting Australian companies to commercialise technology in each sector. Mr Arieni then began to focus upon developing light and luminaire designs for street, carpark, pathway and other overhead lighting applications and an “LED (solar bollard) for low level pathway and driveway lighting”. In 2006, Mr Arieni created “Exlites” as a brand for solar lighting products and adopted that name as the new name for his company. Between 2003 and 2008, Mr Arieni would spend many months working in Taiwan designing solar lighting products and learning about new lighting technology.
48 By December 2005, Mr Arieni had finalised the design for the GENI solar bollard and was preparing to release that product to the market in Australia in January 2006. In 2008, he decided to start making products in Australia, with a view to starting to do so in 2009. In 2009, Mr Arieni began working with a Queensland based company “Sunshine Plastic” which later became “Yandina Plastics”. Mr Arieni says that he worked with the designers to design “new product external housing” based on seeking to resolve faults in the GENI solar bollard. Mr Arieni says that the new product would ultimately become the design for the GENII solar bollard. Yandina Plastics was commissioned to design the tooling to manufacture the GENII solar bollard according to Mr Arieni’s design, making adjustments where appropriate to better suit the moulding process for the production of the tooling.
49 Mr Fry also gives evidence of these matters, the role of Yandina Plastics, the role of other tool designers and his own role in these matters. Mr Fry’s primary focus was upon the technical matters. I will return to Mr Fry’s evidence later in these reasons.
50 Mr Arieni says that he met Mr Fry, who is a director of Sun-Wizard, in late 2008. At that time, Mr Fry was a reseller of products supplied by “Orca Solar Lighting” (“Orca”). Mr Arieni understood that Mr Fry operated an auto-electrical business that sold readymade solar lights and solar water pumps to local councils and others. Orca was a distributor of the Exlites 3500 lighting product. Mr Arieni says that in late 2008 Mr Fry visited Orca’s premises which were located next to the Exlites office in Marcoola on the Queensland Sunshine Coast, and the staff of Orca introduced him to Mr Arieni. Mr Arieni says that he remained in touch with Mr Fry and in early 2009 Mr Fry told him about a solar lighting tower that he had been developing. As far as Mr Arieni was aware, Mr Fry did not have any experience with light fixture design and wanted to use the Exlites 3500 series of lighting products on his tower. Mr Arieni says that Exlites at that time was also developing its own lighting tower which Mr Arieni considered to be “far superior”.
51 Mr Arieni says that he came to the “idea of recruiting [Mr] Fry to Exlites” to work on the Exlites solar lighting tower project. Mr Fry received a proposal from Mr Arieni in late 2009. Due diligence enquiries took place. Mr Arieni says that Mr Fry began “working with Exlites” in December 2009 and became a director of Exlites in January 2010 taking up the role of “Director and production manager mainly on the solar lighting towers”, taking over the “role of production and logistics”. By January 2010, Mr Arieni had already been working on the design of the GENII solar bollard.
52 Mr Arieni lodged the application for registration of the design now under challenge on 7 June 2010. Mr Fry says that he was not aware that the application had been lodged.
53 Mr Fry gave evidence that prior to January 2010 he had no role in Exlites and that prior to joining Exlites as a director he had conducted an auto-electrical business in the mining industry looking after solar pumping stations and some lighting for the cattle industry. Mr Fry gave evidence that at Exlites he was responsible for the “technical side of stuff as far as electrical design and electrical circuits, manufacture of those particular circuits … and assembly of that sort of stuff”. Mr Fry says that he had some dealings with resellers of Exlites products (such as communicating with them about training and how the products worked); no dealings with wholesalers; and dealings with “members of the ‘C I Network’” on technical aspects concerning “the operation of the lights … how they worked, and installation”. Mr Fry says that he was “mostly” focused on the “technical aspects”. He says that in dealing with members of the “C I Network” he dealt with them as he dealt with any other person with whom he engaged for Exlites whether members of that network or distributors of the Exlites products.
54 Mr Fry accepted in cross-examination that when he joined Exlites in January 2010, Exlites was already selling the GENI product; that he, by his business called “Auto Sun and Air” had installed the GENI solar bollard at Brampton Island in 2008; and that by January 2010, Mr Arieni had already commenced the process of developing the design for the GENII solar bollard.
55 Mr Fry accepted in cross-examination that “very shortly after” joining Exlites, he was taken to Yandina Plastics where for the first time he was shown the “drawings of the light” concerning what was “being asked [to be] developed” and an image of the GENII solar bollard that was being developed by Mr Arieni. Mr Fry says that the tooling for the GENII design was trialled at Yandina Plastics, then sent to Tool Tech for modifications and then sent to Plasmasters for further trials and modifications. Mr Fry accepted that until that point (the transfer to Plasmasters) he had not been involved in the design of Exlites’ solar bollards. Mr Fry accepted in cross-examination that the “development of the design” of the GENII bollard up to that time was “basically Mike’s idea”. Mr Fry accepted that the design of the GENII solar bollard incorporates, inside the covering or surround, a “conically shaped feature” sometimes described as a “conically shaped diffuser” or as Mr Fry prefers a “conically shaped reflector” as “it” (that feature) “was always called a reflector”.
56 Mr Fry accepted that Mr Arieni designed that feature present in the GENII model. Mr Fry also accepted that Mr Arieni designed the “shape of the outer casing” of the GENII model. Mr Fry gave evidence that his contribution to the development of the product was concerned with a problem with the radius of some of the corners in the tooling. The problem was that the radius was too tight and too constricted creating flow problems with the polycarbonate during moulding which was giving rise to weld lines or marks and lines which were not commercially acceptable. That problem caused the tooling to be sent to Plasmasters.
57 Mr Fry accepted that the process of developing the tooling to the point where a suitable product could be produced involved making “several changes … to the product over about 18 months, to the tooling to get it to a stage where it was almost acceptable apart from the fact of the weld lines” and that the process of designing and developing the GENII solar bollard was “a very expensive process” including applying the majority of the $125,000 lent by Mr Fry to Exlites, to the purchase of the tooling. Mr Fry accepted that Exlites invested significant amounts of money in the development of the GENII solar bollard.
58 Mr Fry also accepted that the modifications he made to the tooling (the radius correction work) did not affect the shape of the internal diffuser (reflector) because that work “wasn’t to do with the reflector inside the light”. Mr Fry also accepted that the modifications to the tooling did not change the shape of the outer casing although it changed the “internal shape of the casing” because the “radius of the corners” of the tooling had been modified. Mr Fry also accepted that prior to joining Exlites as a director he had never designed a solar powered luminaire.
59 Mr Fry also accepted that the GENII solar bollard (illustrated in a photograph in the document at p 355 of the Court Book to which Mr Fry was taken) has the “conical or funnel-shaped diffuser” or reflector which is absent from the GENI model; that the whole body of the light is different in size; that the conical shape of the reflector in the GENII product provides an important technical benefit compared to the GENI model because of the presence of the “conical reflector shape”; and that the conical shape of the reflector also assists in providing an even light pattern.
60 Although Mr Fry accepts in his oral evidence the matters I have described as accepted matters, one point of distinction contended for by Mr Fry is that looking at the Seven Large Representations the subject of the Registered Design, rather than images of the GENII product as manufactured, does not reveal, in the representations, the presence of the conical shaped reflector (diffuser) as one of the features of shape, configuration or ornamentation of the product, that is, one of the visual features of the design as registered.
61 This is said to be so particularly in relation to representation number 7.
62 Representation number 3 (a drawing) plainly shows a partial three-dimensional cross-section of what appears to Mr Fry to be a GENII light. Mr Fry accepted that the GENII light (as shown, for example, at Court Book p 355) incorporates the visual feature of the conical shaped reflector and so it seems to follow that since the lower section of a conical shaped reflector appears, plainly enough, to the eye, in representation number 3, such a feature is present in the design the subject of the registration, although not fully apparent in representation number 3.
63 Representation number 4 (also a drawing) is said by Mr Fry to be an exploded view of representation number 2 (also a drawing). Drawing number 4 shows what is said to be the “central cone”. Mr Fry’s comments concerning drawing number 2 suggest that the shape of the “light head” is different to a GENII light and different to the light head in drawing number 7. There seems to be no point of distinction raised by Mr Fry in relation to drawing number 2 (of which drawing number 4 is an exploded view) that there is no conical shaped reflector.
64 As to representation number 7 (a photograph), Mr Fry says that the photograph shows how a completed solar light ready to be inserted into (or on) a post looks subject to battery connections being attached. Mr Fry also says that it is usually possible to see some of the internal components of the light head in a photograph of such a product but, for some reason, the internal components are obscured in the representation which, for Mr Fry, “makes it difficult to tell whether the light head is a GENI or a GENII”. Mr Fry also says that the battery used (in the photograph) is the battery that was to be used in the later GENI and early GENII lights and so, for Mr Fry, the depiction of the battery is not determinative.
65 Mr Fry says that based on his “detailed knowledge of the Exlites lights”, he believes that the photograph is “most likely a GENII light”, as the characteristic flattened portion or balcony that appears on the lower portion of the dome is typical of GENII lights and the base and mounting screw hole are similar to the GENII light.
66 Mr Fry says, however, that the photograph is “not clear, in particular as concerns the internal features that I would usually use to tell the GENI and GENII light heads apart”.
67 Apart from the particular issue Mr Fry raises about the clarity of the photograph at representation number 7, Mr Fry accepts that he usually uses the internal features of the GENI and GENII lights to tell them apart. The dominant internal feature of the GENII light, in that regard, is the conical shaped reflector. However, Mr Fry says that in the case of the photograph, the conical shaped reflector is “not clear”.
68 Apart from these matters, Mr Fry says that the GENI and GENII Exlites solar bollards are the same in the following ways.
69 First, they were both marketed and sold under the same range of “post shapes and sizes” with variations in millimetres.
70 Second, the “method of attachment” of the “light head” to the post was similar, that is, “by screws” through holes drilled into the post with the screws passing into sockets in the light fitting.
71 Third, the option of “dress rings” was the same for GENI and GENII. A dress ring was inserted between the top of the post and the lighting head to protect the top of the pole and stop water leaking into the area where the battery was located. Mr Fry says that the addition of a dress ring did not cause “any relocation of the internal workings of the light and battery”. The GENI product had the option of a dress ring whereas the GENII typically used a dress ring.
72 Fourth, both “light heads” fit into a “socket of [almost] the same diameter” (later in the oral evidence Mr Fry made reference to a “couple of millimetres” distinction).
73 Fifth, they both have a similar “fixing arrangement”.
74 Sixth, they both have a battery “attached in a similar manner”.
75 Seventh, they both have a LED assembly in a “similar position facing upwards”.
76 Eighth, the “light heads” have a “very similar external shape/silhouette”.
77 Ninth, they both have a “solar panel in the top”.
78 Mr Arieni says that all of the representations shown in the Design Registration are representations of a design for the GENII solar bollard. He says that the representations numbered 1 to 4 and 6 are all computer-aided design drawings and representations 5 and 7 are representations of “actual early parts of the Generation 2 solar bollard”. The references to numbered drawings and photographs (1 to 7) is a reference to the numbering adopted in Exhibit EAP-4 to the declaration of Mr Palfrey dated 17 June 2016. That numbering corresponds to the numbers attributed to the drawings at  of these reasons.
79 Mr Arieni also says that the representation number 7 “was one of the trial shots which were not able to be produced consistently by Yandina Plastics”. Mr Arieni says that the properties of the file for the photograph indicate that it was created on 28 May 2010, not long before the filing of the application on 7 June 2010.
80 Mr Arieni expresses the opinion that the design of the GENI solar bollard is “very different” to the design of the GENII solar bollard and the “most striking difference” between the two is the size of the head and the internal reflector which is cone shaped, emphasising that “[t]here is no internal reflector in the generation 1 with simply an internal mould point being shown at the top of the post”.
81 The Large Scale Representation (No. 7) as it appears in the Design Registration is Annexure A to these reasons.
82 In cross-examination, Mr Arieni was taken to the image at Court Book p 355 of the GENII solar bollard (which also shows an image of the GENI solar bollard) and Mr Arieni accepted, as put to him, that the conical reflector could be seen in the GENII image at p 355. It was then put to him that the conical reflector could not be seen in “design drawing 7 … sorry – which is more difficult to see in design drawing 7” [emphasis added]. Mr Arieni accepted that the conical reflector was “more difficult” to see “in regards to the quality of the representation of the image”.
83 As to the representation at Annexure A (Large Scale Representation 7), Mr Arieni gave evidence that it is an image of the GENII and that although Mr Fry contended that the image was unclear, Mr Arieni regarded it as “actually very clear”. It was put to Mr Arieni in cross-examination that in Figure 7 “the undersection of the head of the bollard … [is] quite unclear” in terms of “whether or not it discloses a conical reflector”. Mr Arieni responded that the image at Figure 7 “actually does” disclose the conical reflector adding that “taking a photograph and duplicating a photograph depending on the quality of the pixels will actually distort the actual visual look of the – the actual image [but] [t]his is a photograph of a GEN2 on page 339 [of the Court Book which is the image at Annexure A]”.
84 Mr Arieni gave evidence that he “totally” disagreed with Mr Fry’s evidence as put to Mr Arieni in cross-examination that “you can’t tell if it was a GEN1 or a GEN2 because it’s too unclear”.
85 As to Mr Fry’s list of similarities described at  to  of these reasons, Mr Arieni gave the following evidence: images were published that gave “examples” of the “poles” to which either a GENI or a GENII light head could be attached although the poles were not offered for sale by Exlites (the point, at ); the method of attachment of the light head to the post was “by screws” as described, at ; a dress ring could be inserted as described, at ; both light heads fit into a socket although there is a two millimetre difference as described, at ; both have a similar fixing arrangement, at ; battery attachment is similar, at ; the LED assembly is in a “similar position, facing upwards”, at ; and as to both having a “very similar external shape/silhouette, at , Mr Arieni disagreed contending that the design of the GENII is “actually larger, more sleek in design” and by “more sleek in design”, he accepted that he meant “flatter domed”. Mr Arieni accepted that each had a solar panel in the top of the light, at .
86 Mr Palfrey also gave evidence on this topic. The background and relevance of Mr Palfrey’s role in the events in issue is discussed later in these reasons.
87 Mr Palfrey was provided with the seven representations which form the basis of the Registered Design and asked to look at each representation and express an opinion about “what each drawing is a drawing of; and what visual features each drawing shows; and how the drawings relate to each other”. He was also asked: “Do the drawings marked #1 and #7, look the same to you? What are they of? What are the differences between them (if any)?”
88 As to drawing 7, Mr Palfrey said this:
This is not the GENII version it is original version of the Solar Head. The reason is the square battery was used in the original version and not the GENII. Also the actual shape of the head is smaller, GENII is more of a Dome. The diffuser used in the GENII is not depicted in the image, which makes me believe it is not the GENII.
89 Mr Palfrey also said this:
I believe Drawings 1 & 7 are the older version and Drawings 2, 3, 4, 5 & 6 are the GENII.
90 Mr Palfrey also said this:
… drawings 1 & 7 are of the old style bollard and not the GENII and are related. They both illustrate a square and bulkier battery than that used in the GENII version that ARS [Mr Palfrey’s company] had purchased.
91 As mentioned earlier, Mr Fry had observed that the battery used in representation 7 is the battery that was to be used in the latter GENI and early GENII lights and so, for Mr Fry, the depiction of the battery was not determinative and, in addition, based on Mr Fry’s detailed knowledge of the Exlites lights, he believed that the image is most likely a GENII light although, in his view, the drawing was not clear as to the internal features of the light which he would “usually use” to tell the GENI and GENII light heads apart.
92 The evidence of Mr Palfrey as described below is unsatisfactory in a number of respects.
93 Mr Palfrey gave evidence that he has worked in a variety of technical roles in the electrical industry for 30 years at a range of companies. His background and experience working with electricity companies made him very familiar with electricity infrastructure and the components and products used by electricity companies and other public infrastructure organisations. He founded All Round Supplies Pty Ltd (“ARS”) in 2000 and at the date of his declaration on 17 June 2016 he remained the owner and managing director of ARS. He has subsequently sold his shares in the company although he has made further investments in the company and remains a director.
94 Mr Palfrey says that ARS is the leading distributor of electrical infrastructure products to utility contractors in Australia. He says that Exlites supplied a variety of solar lighting products to ARS over the years and from 2009 Mr Arieni sought to have ARS promote and sell a solar bollard that Exlites was developing. He says that during that time (which I assume means from 2009) Mr Arieni provided him with documentation concerning the Exlites solar bollard “to use to market the product”. He then identifies three categories of material comprising a 2009 Exlites catalogue and the material already mentioned at (b) and (c) of these reasons. Mr Palfrey’s declaration is very short and does not elaborate upon any of those matters.
95 In the course of cross-examination, Mr Palfrey gave the following evidence.
96 Mr Palfrey said that the initial meeting with Exlites was brought about by Mr David McCormack who was a representative of ARS in New South Wales. Mr Palfrey said that ARS was at that time developing a green energy division to be headed up by Mr Greg Mutton and the initial discussions were about street lighting not solar bollards. Mr Palfrey, Mr McCormack and Mr Arieni met in late 2009 or early 2010 to discuss the “Superlux series” of Exlites products and they were then introduced to the solar bollard as a new product which “definitely [came] later”. It was “first alluded to” at the meeting.
97 Mr Palfrey accepted that the meeting occurred in December 2009.
98 Mr Palfrey was asked when ARS became a member of the “certified installer network” and he thought that it could have been later in 2010 in about June or July 2010 or possibly a little bit later.
99 Mr Palfrey then gave quite emphatic evidence about the time when ARS was supplied with the GENII solar bollard by Exlites. His evidence was that in June or July 2010 he was supplied with the later version of the solar bollard, that is the GENII version, and that he was “pretty sure the first lot we received had the diffuser in it, the diffuser unit [that is, the first lot of solar bollards]”. He said that he believed that ARS started selling the GENII solar bollard in June or July 2010 as that was when ARS “received our first shipment”. Mr Palfrey qualified this evidence by saying that he would need to look specifically at the invoices but that was his understanding.
100 The proposition was put to Mr Palfrey that the GENII solar bollard was not made available to the public until the middle of 2012 due to problems with the tooling. Mr Palfrey observed that he would have to go and look at the part number but in terms of what he remembered of the solar bollard, the diffuser unit, he thought, was in “the first lot we received”.
101 Mr Palfrey observed that it was some time ago and it was difficult for him to exactly picture which units were supplied. Again, he observed that his recollection was that ARS sold the GENII solar bollard from the middle of 2010 although he “would have to go back to further records to find out exactly, back to past invoices, part numbers on invoices etc”.
102 Mr Palfrey then accepted that he had no recollection, specifically, of what sort of bollard was being sold by ARS in 2010. Mr Palfrey assumed based on the email of 3 May 2010 mentioned at (c) of these reasons that ARS did not receive the product until June or July 2010. Mr Palfrey thought that must be so because the shipment in the middle of 2010 “had a diffuser, with the LEDs at the bottom of the – the bottom of the light” and “that was the model that we received”.
103 Mr Palfrey accepted that he did not say anywhere in his declaration of 17 June 2016 that his company, ARS, sold the GENII bollards in 2010.
104 Moreover, Mr Palfrey accepted that a newsletter developed by ARS’s “marketing person” dated April 2012 contained the observation under the heading “Green Energy Products”, “new solar bollards arrive” and the newsletter contained the observation that: “After nearly two years development, the new ARS 2012 bollards are now starting to roll off the production line” and also contained these observations:
Moving the manufacturing from Asia to Australia was a monumental feat, which included overcoming issues with polycarbonate supply and battery supply, amongst other things.
It’s a testament to the tenacity of the Exlites team that we now have an Australian-made product.
105 The newsletter also contains a discussion of some of the features of the new bollard design including its vandal resistant quality, and a range of “pole options”. Mr Palfrey observed in response to the proposition that the newsletter was talking about the availability of the GENII solar bollard produced by Exlites, that although the newsletter did not specifically “say that”, it was “hard for me to comment on that”. Mr Palfrey accepted that ARS was telling its customers in 2012 that after nearly two years of development, the new Exlites bollard was now starting to roll off the production line.
106 After being pressed with that matter, Mr Palfrey again accepted that in his statutory declaration he did not say that ARS had sold GENII solar bollards in the middle of 2010 and observed that in his declaration he was talking about “pictures of bollards and that was all”.
107 Mr Palfrey was taken to an email from Mr Arieni dated 12 June 2012 which observed that the GENII vandal resistant solar bollard was now available for the first production run. Mr Palfrey accepted that that observation was made in 2012, and was again taken to his evidence that ARS had sold the GENII solar bollard in the middle of 2010. Mr Palfrey observed that he had changed that position at the time of giving that earlier oral evidence to say that he did not know exactly what version it was and nor did he know if there was a version one or a version two of the GENII solar bollard. Having said that, Mr Palfrey then gave evidence that it was his “understanding” that the “first lot of solar bollards we received … is a GENII” and “that’s what I believed that we then got in 2010”.
108 Counsel for Key Logic put to Mr Palfrey that his evidence now seemed to be that ARS did receive the GENII solar bollard and sold it in 2010. Mr Palfrey again observed that for the purposes of his statutory declaration, he was asked to “pick between certain lights” and that was all.
109 Mr Palfrey was taken to his statutory declaration and invited to identify where he had suggested that ARS received a GENII solar bollard in 2010. Mr Palfrey accepted that the declaration did not assert that matter. Again, Mr Palfrey asserted that he believed that “at this particular time [June, July 2010], the one I received and the first lot we received would have been the new GENII model”.
110 Again, Mr Palfrey accepted that he did not say in his declaration that he had “received any bollards”. He said that he believed that ARS received a first lot of bollards in June 2010. Mr Palfrey gave evidence that the letter from Wynnes Patent and Trade Mark Attorneys was the basis for his declaration, suggesting inferentially that there was no need for him to mention supply by Exlites of the GENII in June 2010.
111 The evidence of Mr Palfrey on this topic is unsatisfactory.
112 Obviously enough, an assertion by Mr Palfrey that his company received the GENII solar bollard in June or July 2010 and particularly at any time prior to 7 June 2010 is a highly significant matter. So too is evidence that he recalls that the solar bollards delivered to ARS in either June or July contained the conical shaped diffuser.
113 Moreover, the evidence seems to be inconsistent with material issued by ARS itself.
114 It is surprising that Mr Palfrey had not undertaken steps to satisfy himself of the accuracy of these important facts before asserting them so emphatically, qualified only by the observation that this version of the facts was his “understanding” and that he would need to go back and check his records, invoices, part numbers and other documents. It is also unsatisfactory, on the one hand, that he would accept at one point that he has no real recollection of these things but yet, on the other hand, assert a recollection to the extent possible that his company did receive the GENII product on the footing that he could recall the conical shaped reflector or diffuser being present in the product.
115 The state of the evidence is such that it is perfectly clear that the GENII product containing the conical shaped reflector was not produced until much later and certainly not in 2010. I will return to the evidence in relation to that matter later in these reasons in addressing propositions put to Mr Arieni in cross-examination.
116 Mr Palfrey unfortunately gave the Court the impression that he had come along to give evidence about a fundamental matter going to important aspects of the chronology with a view to being an advocate for the invalidity of the Registered Design. This, of course, was not deliberate but merely a legacy of a fundamental lack of precision in his evidence and a significant failure to satisfy himself about important matters central to his evidence before giving the evidence.
117 The second area of difficulty is that Mr Palfrey was taken to a screen capture of a webpage for ARS described as “our online shopping portal” which made reference to the “Sun-Wizard solar bollard”. Mr Palfrey was asked whether that was a solar bollard made by the respondent in the proceeding. Mr Palfrey answered in a particular way and was asked to answer the question put to him and say whether he accepted that ARS was now selling Sun-Wizard solar bollards. He answered that ARS was not selling them. He was asked when ARS ceased selling Sun-Wizard solar bollards and answered: “We don’t promote them anymore. The last one we sold, two – again, I would be guessing, but it was a significant time ago … well I’d say more than 12 months ago … longer than 12 months”. Mr Palfrey observed that he would have to check his records.
118 Counsel for Key Logic observed: “I want to understand when your company started selling the Sun-Wizard solar bollards and when it ceased selling the solar bollards”. Mr Palfrey said: “I can’t tell you the exact dates, I’m sorry. I can’t recall”. Mr Palfrey observed that the last Sun-Wizard solar bollard was sold by ARS more than 12 months ago and although Mr Palfrey was not being asked for an “exact date”, he was not able to recall the period of time with any precision.
119 Mr Palfrey accepted that ARS “was promoting Sun-Wizard solar bollards” and he also accepted that in representations on the webpage for the Sun-Wizard solar bollard page, ARS was in fact illustrating the Exlites GENII bollard and thus ARS had been promoting the Sun-Wizard bollard using photographs of Exlites GENII solar bollard. Mr Palfrey accepted that an ARS marketing person had used the wrong photograph although that had not occurred deliberately. Mr Palfrey observed that ARS was not now promoting a Sun-Wizard solar bollard.
120 Counsel for Key Logic returned to this topic later in the cross-examination in this exchange at T, p 202, lns 30-43:
Counsel: Are you able to tell the court, at least approximately, when your company started selling the Sun-Wizard solar bollards?
Mr Palfrey: Geez. Again, I don’t have an exact date. I would be able – if I had a chance to look at my records, I would be able to tell you, but I cannot recall the exact date, no.
Counsel: Right. You can’t recall the year?
Mr Palfrey: I could only guess the number of years roughly. I would say somewhere – three years. Three/four years. I’m guessing, but I – again, it’s a guess and I’m not – no, … sorry, I cannot answer that question.
Counsel: So this is when you started selling the Sun-Wizard – your company started selling the Sun-Wizard solar bollards?
Mr Palfrey: Correct.
Counsel: You think it might have been three or four years ago?
Mr Palfrey: I cannot confirm that exactly. That’s my best educated guess at this stage without going back to my records.
121 On this topic, Mr Palfrey gave evidence that ARS had not entered into a formal commercial arrangement with Sun-Wizard, in particular, in relation to the solar bollard. As to any “informal commercial arrangement”, Mr Palfrey gave evidence that ARS had purchased a product and sold a product prior to the date of his declaration on 17 June 2016 but could not confirm without checking the records of ARS when ARS purchased the first Sun-Wizard solar bollard.
122 It is now necessary to return to an aspect of Mr Fry’s evidence.
123 In the course of cross-examination, Mr Fry was taken to a webpage under the heading:
124 Under that heading the following appears:
125 That webpage became Exhibit 23.
126 Mr Fry was asked whether the image depicted at  of these reasons is a photograph of the solar bollard Sun-Wizard is currently promoting and selling in the marketplace (as at the date of trial). Mr Fry said that it was not and when asked whether he thought it might be an Exlites solar bollard he said that he did not know and could not identify “whether it’s either/or”. Ultimately, Mr Fry thought that the image was “the first trial Sun-Wizard light, yes. Yes, it would be”.
127 Mr Fry was asked when his company began selling the particular solar bollard identified in the above image, through Mr Palfrey’s company. Mr Fry said that it was in 2015 when that particular light was sent to several companies and people for trial. Mr Fry accepted that in 2015 he supplied solar bollards to Mr Palfrey’s company, ARS, as illustrated in the webpage at Exhibit 23. The solar bollards were supplied to ARS in 2015 by Mr Fry’s company called Karmic Lighting. Mr Fry accepted that he is a director of that company and involved in the day-to-day running of that company. As to when Mr Fry first contacted ARS and supplied ARS with the particular bollard in Exhibit 23, Mr Fry said this (at T, Day 3, p 38, lns 4-10):
Exactly what time it was, I can’t recall when I … first spoke or when we first conferred with … Mr Palfrey about the light. We talked to him about several different aspects of the light and marketing and he provided us with some marketing material that he was using that he has changed and what have you to suit our product, which was basically a cardboard box to transport the item with. And it was around the third month of 2015 that we sent some lights for him to trial.
128 Mr Fry gave evidence that he was not aware that Mr Palfrey would place those lights on the ARS website for sale to the public but if Mr Palfrey wanted to do so “that was his prerogative”, or put another way in his answers: “That was at his [Mr Palfrey’s] discretion. If he wanted to sell them he could. This wasn’t … my call”. Mr Palfrey accepted that the Sun-Wizard solar bollard the subject of these exchanges, that is, as depicted in Exhibit 23, was “a completed product that was suitable for being sold to the public if that’s what All Round Supplies wanted and that “it wasn’t just a trial product that wasn’t suitable to be placed onto the marketplace”.
129 Mr Fry was asked when he, through Karmic Lighting, first entered into a commercial relationship with Mr Palfrey’s company, ARS. Mr Fry said that it would have been at “a similar time … Well, 2015”. Mr Fry said that “there wasn’t anything sold to anyone before the third month of 2015” and that Mr Fry had approached ARS rather than the reverse.
130 The evidence of Mr Fry is that by the third month of 2015, at the initiative of Mr Fry, a company controlled by Mr Fry had entered into a commercial relationship with Mr Palfrey’s company to sell solar bollards which were sufficiently similar in shape to the GENII solar bollard that Mr Fry had difficulty in distinguishing between the two lights in the course of his evidence.
131 As to this aspect of the proceedings, I am not willing to accept Mr Palfrey’s evidence that Exlites supplied a solar bollard to ARS at any time in June 2010 containing a conical shaped diffuser or reflector. Nor did it do so at any time in 2010. I do not accept Mr Palfrey’s evidence about representation 7 in the Design Registration. I accept Mr Arieni’s evidence that the Design Registration depicts features of shape, pattern or ornamentation described as a conical shaped reflector or conical shaped diffuser. Although Mr Fry gave evidence that, in his view, photograph 7 is “not clear, in particular as concerns the internal features that I would usually use to tell the GENI and GENII light heads apart”, I accept that the visual feature is present in the design as registered. I do so on the footing of Mr Arieni’s evidence.
132 Because the design contains a conical shaped reflector, and the shape of the dome is different to the GENI design, the Registered Design, as compared with the relevant part of the prior art, namely, the GENI design, is “new”. It is not identical to the design of the GENI.
133 I am also satisfied having regard to the evidence of the similarities and the evidence of the feature described as the conical shaped diffuser or reflector that the design is distinctive when compared with the design for the GENI light which is the relevant art relied upon by Sun-Wizard within the prior art base, subject to what is said later concerning the matters at (a) of these reasons. I am satisfied that the Registered Design is not substantially similar in overall impression to the design for the GENI light and in reaching that decision I have given more weight to the similarities discussed in the evidence than the differences between the two designs. I am satisfied on the evidence that the presence of the conical shaped reflector is accepted by both Mr Arieni and Mr Fry as a significant visual feature, putting to one side the debate raised by Mr Fry about whether representation 7 clearly depicts the conical shaped reflector. That feature provides a very important functional aspect of the light especially in relation to diffusion but it also provides a very important visual feature of the design having regard to the overall design of the solar bollard and, in particular, of course, the light head.
134 As to the visual feature of the dome, Mr Arieni identifies the shape of the dome as an important visual feature of the overall design. Mr Fry in his evidence in relation to the seven images and in particular image 7, observes that based on his detailed knowledge of the Exlites lights, he believes that image 7 is “most likely a GENII light”. Although Mr Fry says that the drawing is not clear as to the internal feature of the conical shaped reflector, he says that he is able to identify image 7 as a GENII light by reference to the characteristic flattened portion or balcony that appears on the lower portion of the dome which is typical of GENII lights. In other words, Mr Fry attaches some importance to the visual features of that aspect of the light.
135 I am also satisfied that the visual features of the dome contribute to the design as a whole. Having regard to these matters, I am not satisfied that the design is substantially similar in overall impression to the GENI design.
136 Thus, I am satisfied that Sun-Wizard has failed to demonstrate that the Registered Design is not a registerable design by reason of a comparison between the Registered Design and the GENI design forming part of the prior art base.
137 As to the matters at (a) of these reasons, those matters can be addressed briefly. I am not satisfied that any of the material described at (a) discloses the features of shape, pattern or ornamentation of a conical shaped reflector or diffuser as appears in the Registered Design of the GENII product. I am not satisfied that any of the material has the effect of rendering the visual features of the Registered Design neither new nor distinctive.
138 The next question is whether the disclosure of the design in the attachments to the emails described at (b) and (c) of these reasons occurred in circumstances where an obligation of confidence arose in the recipients to keep that disclosure confidential.
The Certified Installer Network
139 It is now necessary to examine Mr Arieni’s evidence both in chief and in cross-examination on this topic, in a little detail. His evidence is this.
140 In about mid-2009, Orca was the main distributor of Exlites products. At this time the contract with Orca was coming to an end. Orca decided that it no longer wished to distribute the Exlites range of products. Rather than appoint a single company for the whole of Australia in place of Orca, Mr Arieni decided to establish distributors in multiple locations. The so-called Certified Installer Network (the “CIN”) came out of this idea. The idea seemed to be one of setting up “distributors in multiple locations rather than using a single company [like Orca], to cover the entire Australia market more effectively”. Mr Arieni began initial discussions with Mr Greg McClure from McClure Electrical. Mr McClure introduced Mr Arieni to Mr McClure’s brother-in-law, Mr Greg Steele from Steele Electrical. Mr Arieni also held discussions with “Sovereign Solar” who was a distributor of the first generation of Exlites bollards. Mr Arieni’s idea was to create a network of “resellers with whom Exlites would work closely to promote the Exlites brand”.
141 Mr Arieni’s idea began “taking shape” early in the second half of 2009. In October 2009, Mr Arieni drafted a document which he describes as the “CIN Overview Document” (annexed to his affidavit of 8 February 2018 as “MJA-3”).
The Investment Summary
142 That document is a modified extract from a document described as an Exlites “Investment Summary” dated October 2009.
143 Mr Fry in his affidavit of 9 April 2018 gives evidence that Mr Arieni visited him at his home in October 2009 with Mr David Hunt, a finance broker or finance adviser to Mr Arieni, with financial documents for Mr Fry’s accountant and lawyer to review. That document was the Investment Summary.
144 Mr Arieni’s CIN Overview Document begins with the heading “4.4 Distribution” and consists of four pages which are essentially in the same terms as material drawn from the Investment Summary. In the Investment Summary and for that matter the CIN Overview Document, Mr Arieni explains some aspects of the ideas behind and approach to establishing the CIN.
145 In the Investment Summary, Exlites explains that it continues to design, manufacture and further develop technologies in the unique but growing market segment of sustainable lighting, and “off grid” lighting. By the document, Exlites was seeking to raise capital to fund expansion to complete the development of new products. The document explains the market and the unique competitive advantage said to derive from Exlites technologies. Those matters are described in the document and at section 4.3, there is a discussion of the Exlites “Marketing Strategy”. In that section, Exlites says that it will “continue the setting up of Exlites joint venture represented offices, or select appropriate distributors in major global territories … which will open the opportunity for domestic government support within these markets and regions”. It says that the key to success will be innovative technology combined with effective market segmentation through identification of niche markets and implementation strategies. It asserts that Exlites will produce and provide innovative products of uncompromised quality and benefit to its customers.
146 As to an effective and efficient distribution network, the document says that the importance of such a network cannot be emphasised enough in the line of business in which Exlites is engaged. It says: “We will establish an excellent distribution network through our Certified Installer network that will enable us to rapidly respond to customers’ orders and requests”.
147 Apart from emphasising the technology, the document asserts that the “loyalty and dedication of our partners, employees and business associates shall be essential to the prosperity of the organisation”.
148 As to marketing and knowhow, the document says that in an increasingly competitive market there is a need to “aggressively, market our business innovations and technology”.
149 As to the approach to growing sales, the document says that Exlites proposes to direct and manage sales activity “within our own infrastructure” which will ensure that Exlites has the direct contacts and knowledge of client needs and is “not exposed to a range of non performing external distributors”. It says that the benefit of the distribution model includes calling upon the “technical experience of [the] Certified Installer Network and appointed wholesalers”. The document then sets out the role of the internal Exlites business development managers one of which is to be responsible for relationship management with all of the Exlites “Certified Installer (CI) networks”.
150 Section 4.4 of the document addresses the topic of “distribution”.
151 It says that “our distribution network strategy has now been completed and will ensure that we capitalize on the growing global and local awareness and need for ‘sustainable lighting’”. The document observes that distribution is to be broken down into three market segments one of which is “Open Space Lighting via Certified Installer Network”.
152 As to that segment the document says this:
New Certified Installers and other profile electrical wholesalers within Australia are in the process of being appointed to sell and manage product supply to our identified market segments and on a geographical basis to ensure a full market presence perceived. All referrals directly to EXlites will now be data based then forwarded onto these Certified Installers/wholesalers for follow up of site design, quoting and installation.
The Certified Installers have the experience, and capacity to manage and on sell the full range of EXlites projects and lighting solutions, and also have the industry links and connections to the major corporations and companies that are focused on reducing their carbon issues and their ongoing high costs of maintenance.
153 Immediately following those paragraphs the document addresses the topic of “Exlites Certified Installer Network Restructure (C.I.N): Co Op styled structure”. As to that, the document says this:
Who will we work with:
• The individual Certified Installer must be a reputable electrical contractor who is a major specific industry figure in their respective field and territories to ensure Exlites is associated with the highest calibre of associate as possible which will also reflect back on Exlites.
• This nominated company will have the capability to commit staff specifically to this project for site design, quotation and installation of our technologies. Staff levels will be expected to increase with productivity.
154 The document then describes how Exlites will go about training the nominated members within each company appointed as part of the CIN. It says that Exlites will train such nominees at the Exlites head office on how to undertake a site check for solar installation, the design of projects, quotation for the work and the correct installation of the technology. These trained individuals are to become the team leaders/supervisors for sales and installation and will be required to carry out the final check at project completion. The relevant staff of the CIN members will be retrained throughout the year.
155 As to Exlites support for the CIN, the document says this:
• EXlites will have in place the same trade buy rate for all our range, with a set RRP [Recommend Retail Price] which is agreed upon by the C.I.N.
• This will ensure C.I.N members pricing schedule nationally will be identical and eliminates any cross territory disagreements. This pricing will exclude freight charges and all stock will be held and dispatched from our warehouse initially.
• EXlites will have in place a base list of solar pole designs from various suppliers for the C.I.N with a special trade price available for the C.I.N only.
• With all enquiries directly to Exlites from the specified C.I.N member areas will be forward[ed] directly on to the relevant C.I.N member for follow up and quoting directly.
• In the event EXlites are asked to quote directly for a system only purchase, EXlites will quote only the agreed RRP system sell price, plus freight and then forward the sale enquiry to our C.I.N for finalisation.
• EXlites will have our own [BDMs] on the road with their main job description to create the awareness of our brand, product range and creating sales opportunities and introductions for our C.I.N members to new end customers.
• EXlites BDM’s will attend relevant industry trade shows for each territory (if applicable) at our cost with territory C.I.N members allocated team leaders/supervisors requested to be on site within their respective territories for assistance with all relevant leads being data based by EXlites and handed across to our C.I.N member for their respective territories.
• EXlites will arrange, and pay for, professional trade stands for relevant industry trade shows with all marketing and display material on hand.
156 As to the benefits of becoming a CIN member the document says this:
• In the event of a tender (as we are having our product specified already) with other non C.I.N electrical contractors quoting, the trade buy component price directly through EXlites or an Electrical Wholesale Distributor for non members will be no less than 15% higher.
• In the event another electrical contractor wins the tender this additional mark up will allow us to pay our Certified Installer to go out and inspect the installation and certify it to ensure our system never fails because [of] a non conforming installation.
• The C.I.N will also have the ability to sub contract other electrical contractors within their nominated territory who may have access to other end users to increase their own (C.I.N) sales activity by means of project profit share due to access of system components being cheaper, but in turn the C.I.N are still responsible for final installation check off and certification.
• Being part of the C.I.N offers diversification into a rapidly growing sector of sustainable lighting for current professional electrical contracting companies to expand their turnover and bottom line whilst keeping ahead of industry competition with an Australian Made market proven product range and brand EXlites.
• EXlites will set a national sales target per product line broken down to state and territories with KPIs per product line with added incentives upon achieving KPIs a rebate being paid to each individual C.I.N member upon their relevant territories achievement.
• No stock holding in C.I.N members warehouse in turn creating no cash flow restrictions. All stock [will be held] and dispatched from EXlites own warehouse facility.
• C.I.N members have the option to carry stock if so required to save on transportation costs for smaller unit numbers.
157 The document sets out a description of what Exlites requires from a CIN member and then displays a map of Australia which shows “the diversity of the Certified Installer Network through Australia”. It observes that some locations marked on the map are “sub-branches of our C.I.N members whose head offices are located in major cities within Australia”.
158 Almost all of the things described at  to  are contained in the document Mr Arieni describes as the CIN Overview Document at MJA-3 as earlier described.
159 Mr Arieni says that he began sending out his CIN Overview Document in late 2009 to early 2010.
Aspects of the emails sent by Mr Arieni and further matters concerning the CIN
160 On 11 December 2009, Mr Arieni sent an email to Mr McClure attaching the CIN Overview Document. In the email he says this:
Thank you for your time today.
We are setting up a new full infrastructure [here] in Australia for manufacturing and now distributing our products directly to a new formed Certified Installer Network cutting out our old middle man distributor we used to have here.
You are in an area we have not discussed with anyone yet and we would be interested in talking with you further to become a CI for us.
Attached is our current product range brochure and also a brief over view of the CI requirements.
I would be very interested in [knowing] what radius of territory you could handle exclusively for us from [your] office base in Kangaroo Flats.
Greg I look forward to talking more next week.
161 In his affidavit of 8 February 2018, Mr Arieni says that while he described the businesses in his “CI Network” as “Certified Installers”, each of them “was really an exclusive distributor in the particular locality in which they were based”. Mr Arieni then annexes to his affidavit a Google map extract of Australia at 26 February 2010 “showing the CI Network at the time”. That map shows a number of cities and towns and a number of company or firm names of businesses or entities that constitute the CI Network at that date. The names are these: T&D UPS Qld; MACS Engineering; BeaconsField Electrical; Solarite; Sunshine Solarlife; Sovereign Energy; PlanElec; Matthew Bourke Electrical; McClure Electrical; Elecsteele; Electrical Agencies Tasmania; T&D UPS SA; and All Round Supplies and DMG Electrical. The last member is shown on the map in four places (one in Queensland, two in the Northern Territory and one in Western Australia).
162 Mr Arieni says that at the peak of the network there were 11 Certified Installers.
163 As to All Round Supplies, some aspects of the early engagement between Mr Palfrey and Mr Arieni was mentioned earlier in these reasons. Other aspects of that matter are these.
164 On 3 December 2009, Mr Palfrey sent an email to Mr Arieni thanking Mr Arieni for his time that day and observed that Mr Palfrey was looking forward to developing the business relationship further and that it was his view that the Exlites products had “fantastic potential” and hopefully with ARS, the market potential could be developed and exploited. As to streetlight column manufacture, Mr Palfrey referred Mr Arieni to a particular pole manufacturer and looked forward to further discussions with Mr Arieni.
165 On 8 December 2009, Mr Arieni sent an email to Mr Palfrey, Mr Mutton and Mr McKormack making favourable observations about the recent meeting and attaching a current brochure of the Exlites products and other information. As to the CIN, Mr Arieni observed that he had budgeted for supply to the CIN members for their “direct sales” with a view to maintaining a “one on one relationship” and nominating pricing and set margins as Exlites would be paying the CIN members rebates. Mr Arieni said that the position would likely be different in Darwin and, together with ARS, a decision could be made about appointment of a CIN member for the whole of the Northern Territory, North Western Australia and possibly Mount Isa in Queensland.
166 Mr Arieni also suggested that Exlites could utilise ARS to carry stock for everyone else within the ARS market area outside of the CIN member network if that would work for ARS:
… on a volume order pricing structure as per the CI pricing then you can supply everyone else including the likes of electrical wholesalers as [their] buy price is 20% more expensive than the CI pricing structure anyway and you can take your clip on the way through.
167 Mr Arieni concluded the email by requesting the addressees to “keep this pricing confidential for now”.
168 Mr Arieni says that about four of the CIN members went on to become exclusive distributors for Exlites for one or more entire States rather than appointed for a particular locality. ARS was one such exclusive distributor.
169 Mr Arieni provides some examples exhibited to his 8 February 2018 affidavit of the way in which the CIN system worked as between Exlites and a member of the CIN. One example involved a request by email to Exlites from Controltek Services Pty Ltd for a quotation for three sets of pole-mounted solar luminaires according to particular drawings. Mr Arieni responded seeking some further information, Controltek responded, Exlites responded to Controltek copying in Mr Palfrey and Mr Mutton advising Controltek that the question of supply of the components of the system had been forwarded to ARS. Mr Palfrey responded to Mr Arieni with details of the quote he had given to the customer thus obtaining the benefit of the transaction.
170 Another example concerned Kyocera panel pricing. Mr Arieni sent an email to Mr Palfrey on 16 December 2009 providing the Exlites “cost price” which would be available from Kyocera to CIN members. Arrangements were made in the emails for ARS to have the benefit of preferential direct pricing. Mr Arieni advised Mr Palfrey that Kyocera would be sent a list of all groups aligned with Exlites so that those entities could get the benefit of the direct “buy price under our umbrella” and that Kyocera would only supply panels at the particular pricing structure for projects using Exlites products.
171 As to information given by Exlites to members of the CIN, Mr Arieni said these things on that topic in his affidavit of 8 February 2018.
172 Mr Arieni says that Exlites was giving detailed information to the CIN members in relation to “new models and updates on the progress of product development” so that they knew “what was coming in the future, and could give input to what Exlites was doing”. He says that as Exlites developed new products, he would “bounce ideas off the [CIN] for their opinions, because they are at the coalface and can see what the market wants”. He annexes some emails to his affidavit that are said to demonstrate the type and amount of information shared by Exlites “within the network”: the emails are dated 10 February 2010, 15 February 2010, 17 February 2010 and 26 May 2010. I will return to those emails.
173 Mr Arieni says that Exlites also sometimes shared or showed the CIN members new models at closed meetings where he would demonstrate to several CIN members (as he says he did on 8 September 2011) “some of the new features of the GEN2 solar bollard, which was still a work in progress even then, and Exlites’, new solar bollard lighting tower LED floodlight design”.
174 Mr Arieni also says that the “vast majority of the information shared with the CI Network was not designed to be released to the public”.
175 Mr Arieni then gives evidence about his general habit of ensuring that any third party signs a confidentiality agreement before he reveals information regarding planned product features or designs. I will also return to that matter later in these reasons.
176 Before examining aspects of Mr Arieni’s oral evidence on many of these matters in the course of cross-examination, it is first necessary to note some further aspects of the documents.
177 On 10 February 2010, Mr Arieni sent an email to Mr Boatswain, Mr Kedwell, Mr McClure, Mr Steele, Mr Mutton (who was then at ARS), Darryl at Solarite, Mr McNeilly at MACS Engineering, Mr Palfrey, Kym Scutter, “Tim” at UPSQ and “henryt” at Global. Mr Arieni said this:
Attached is the current 2010 Product Range Catalogue for your reference.
We have had tooling delays due to the local company we are dealing with took 3 weeks off at Christmas then were put back in the line with the Chinese tool maker as we had to do some more modifications because of some flow rates and now we have Chinese New Year to contend with as well.
We are looking at late March for the start of new production now as we are air lifting tooling across once they have been polished after the next shot run to check.
Each product listed in the brochure is basically a one page overview which keeps it simple.
178 The attached catalogue bears the heading “SOLAR BOLLARD” with the sub-heading “‘Australian Made’ GENII Design”. Under that appears: “Exlites are proud to present our new ‘Australian Made’ heavy duty and vandal resistant SOLAR BOLLARD for use in all commercial applications in most global regions”. It also recites: “For release late March 2010”. It then recites eight features of the new GENII product. It depicts an image of a light head sitting on a pole.
179 On 15 February 2010, Mr Arieni sent an email to the same group of people as the email of 10 February 2010 but for “henryt”, Darryl, and Kym Scutter, although on this occasion he included “Ian.aileen”. In the email of 15 February 2010, Mr Arieni said this to the group:
As we get closer to the start of the new business we will keep on updating information to you.
Attached for you are the current price schedules for all of Australia (excluding Tasmania) for the RRP Pricing including solar panels.
PLEASE DELETE ALL PREVIOUS PRICE SCHEDULES FROM YOUR SYSTEM.
All products and components listed RRP have a 20% mark up excluding the bollard light heads which has 15% to keep them under the $400 mark.
You will also see the bollard light heads have pricing now for the slave heads for solar and AC CFL versions which will be supplied without lamps and you will need to add these in when pricing depending on what size the client requires up to 20watt CFL.
Also attached is your CI price schedule which is confidential and for your eyes only thus the reason it is separated from the other price schedules.
Installation pricing we will discuss when we all get together in March so the group is singing from the same book to get your GP right. Lester [Boatswain] from Sovereign Energy can offer some advice here as they have been working with us for a while now and Lester has been very instrumental in helping me put together this network structure.
I am getting started on the over head lighting poles now to start getting the pricing structure right for you all.
Also attached are some spread sheets to work out comparisons against AC installations. Need a hand to decipher I am happy to run through it with you. All the yellow sections are changeable.
With the lighting towers once we have finished the pricing of the completed systems hopefully this week I will then give you a pricing schedule which a % of the sell price will be paid to you [as] a commission. We will have one price for all of Australia and I have a company on hand who can do operating leases for the towers if your end client requires it.
Any questions please do not hesitate to contact me.
180 On 17 February 2010, Mr Arieni sent another email to: McClure, Steele, Boatswain, Tim, Kedwell, Palfrey, Aileen Fahl, McNeilly, Scutter and Mutton. This group seems to be the cohort with whom Mr Arieni was sharing information.
181 The email of 17 February 2010 also went to what Mr Arieni describes as the “investor group” who were involved in the issue of Exlites raising capital. That group seemed to comprise Mr Hunt, Mr Burrell, Mr Avey, Mr Wood and Mr MacKenzie.
182 In the email of 17 February 2010, Mr Arieni said a number of things including these matters (and addressed the email at the outset in the way set out below):
To All EXlites Certified Installers,
As you know EXlites endeavours internally to create new market opportunities whether it is local, or interstate with the follow on effects usually duplicating over state boundaries anyway.
A little update I thought I should pass on to you all which will help us further penetrate our market share within the government sector and especially the Education Department as the national sustainable schools project is growing momentum and each state government is progressing forward.
[Mr Arieni then describes a presentation to the Education Department about “sustainability” and the Exlites product range.]
[Mr Arieni described the interest shown by the director of Teaching and Learning within the Education Department], due to the fact we have all the external lighting solutions they require for use within school grounds from car park lighting, covered walkway lighting, bus shelter lighting, pathway lighting, security lighting and temporary event lighting.
We will keep you informed of the progress forward as this will also give us superior leverage within other states once this is underway and we will ensure that all Qld Certified Installers are part of the equation as we require your assistance in site design, quoting, and installation of products within your respective areas.
In regards to the Solar Lighting Tower as many of you are now aware we are only a week or two away from having it totally operational and ready for launching.
[Mr Arieni describes details about a launch of the tower in March.]
[Mr Arieni then describes the pricing arrangements in relation to the matter.]
183 On 21 April 2010, Mr Arieni sent an email under the subject reference “6 LED Test Comparison”. This email is the first of the emails relied upon by Sun-Wizard as described at (b) of these reasons.
184 The email is in these terms:
Attachments: EXlites Bollard Comparisons v2.pdf
As promised here it is. I will let the document speak for itself.
I put the blue LED into the mix as well so you get an idea of what the static LED colours (blue, red, green, yellow/orange) will be like as well.
I am considering reducing the milliamp draw from the PCB by 20%-25% in each model as we are far more brighter than we have ever been before with these new versions (with reflector enhancement still to come) and would like your opinions as most of you that this has been emailed to re-sell these for us into your markets globally.
Benefits will be:
• Lower battery cycle increased life
• Longer autonomy
• Quicker recharge due to less daily draw down
• Better operating ability in lower peak sunlight locations.
185 The email attaches the new bollard comparison version 2 and it is common ground that the attachment depicts the design of the GENII bollard displaying the conical shaped diffuser or reflector.
186 On 3 May 2010, Mr Arieni sent another email of significance for these proceedings which is the email referred to at (c) of these reasons. That email, under the subject “GenII Solar Bollard Pre Release Data Sheet” is in these terms:
Attachments: Solar Bollard 2010 GENII Pre Release Data Sheet.pdf
To All EXlites Associates,
Attached for you is a pre release data sheet on the new 2010 solar bollard.
This will show you exactly the size difference between the current version and the old model.
This is to also give you all new system design facts prior to the new product information brochure that will be completed shortly once all certifications have been completed.
We will receive the new PCB’s this week to do the lux trials and make the final decision on PCB’s (LED’s) that will be available. These ones coming have the power draw reduced and we have other variants coming to trial just to see how low we can take the new 3 LED version but still keep it better than the previous 6 LED version and what we can do with the new 6 LED version.
As you can see the % increases in battery capacity and solar panel input are much higher than any previous version which will offer us I believe the best stand alone solar lighting product in Australia and globally.
We again apologise for all the delays and frustrations caused to some of you but as I have explained it has been out of our direct control as we are using another local Australian company to arrange the tooling for us and the delays are with them and their tool maker.
All going to plan this will be finished very soon so we can start production.
187 The email attaches a document described by Mr Arieni as a “pre release data sheet” which bears the same heading and a similar sub-heading and introductory statement to that mentioned at  of these reasons. It sets out 15 particular features of the new product and it contains an image of the new 2010 GENII product standing next to the earlier model described as the “2006 – 2009 Model” (being the GENI). It then has four images showing illumination of the light head.
188 The emails of 21 April 2010 and 3 May 2010 were sent to the same group of recipients as described at  of these reasons but for the group described as the investor group.
189 On 26 May 2010, Mr Arieni sent another email to essentially the same group as the emails of 21 April 2010 and 3 May 2010 except that this email includes Mr Steven Gooch. Mr Arieni said this:
Here are some price changes (re exchange rate) and a couple of slight panel size changes in a couple of locations.
Also you will notice the bollard poles have increased in price I have had these sent to me by Ian at Fyntrim late this afternoon as the new bollard head will have 4 Rivloks and the aluminium has gone up slightly.
I [or] you contact them for stock and the price is higher let me know and I will sort it. If it is less then you have a win!!!!
The 2010 solar bollard will be late July now and all the moulding issues have been resolved finally so we can start moving forward.
The 6 LED 50mA PCB will arrive Monday [and] I will test confirm then get the heads booked in for NATA Photometric testing so we can get spacings for the 3 and 6 LED versions.
I am completely snowed under right now and if you are waiting for me to come back to you I will shortly.
I apologise for any communication delays just a lot happening and quite a few meetings which have been taking me away from the office as well.
190 Over two years later, on 12 June 2012, Mr Arieni sent an email under the subject “EXlites GENII Solar Bollards Released and Installed On Pontoon by Bellingham Marine”. The email refers to an attachment described as “IMG – 20120607-00177 Completion Inspection 7-6-12.jpg; Australian Distributors and Resellers.pdf”. The email was sent to 28 addressees. It is in these terms:
The GEN II Vandal Resistant Solar Bollard is now available with the first production run near sold out.
Attached are the new EXlites GEN II Solar Bollards installed on a pontoon by Bellingham Marine last week using the marine grade anodised aluminium bollard pole with the Rivlok Security locking system.
For more information you can visit [the Exlites website].
For any Australian enquiries please see the attached Australian distributor network list or for any international or export requirements only, contact EXlites directly.
191 As to the email dated 21 April 2010, Mr Arieni says in his affidavit of 8 February 2018 that the email does not show the recipients because he usually sends such “group emails as a habit by Blind Carbon Copying all recipients”. He says that he does it this way so that the recipients will not receive every other person’s contact details.
192 Mr Arieni says that the email of 21 April 2010 was sent “to only the CI Network” and in the course of his oral evidence he identified the group specifically, as described earlier: see  of these reasons. Mr Arieni says that the email was sent to that group “just to keep them all up to speed as to the difference between what was going to come to market eventually, and what they are currently selling”. He says that the documents attached to that email were for “internal CI Network updating only, and not intended for public distribution”. He says that all images of the new model depicted in the two documents attached to the email “were not even complete units”. He says that the battery in the images was not used in the finalised model and the new bollards in the images had no dome. He adds that the brightness levels shown were also not final “because the email clearly states that Exlites was still working on adjusting the brightness”. He says that “[e]ven the power current of the new model in these images was not what was eventually released to the market” and “[i]n fact, the final model was only released to the market about two years after this email was sent”.
193 Although para 50 of Mr Arieni’s affidavit of 8 February 2018 was not read and relied upon by Key Logic, Mr Arieni accepted that the formatted layout of the two documents attached to the email of 21 April 2010 was adopted to “give some professionalism to what was being sent to the CI Network”. Mr Arieni accepted that he intended to use the template to create branding uniformity and that if he was creating a company document, whether that document was to be kept internally by the company or given to a third party, he would generally try to use the template for consistency.
194 As to the email dated 3 May 2010, Mr Arieni says that this email was only sent to the “CI Network for the purposes of keeping them updated as to the development of the new model”. Mr Arieni observes that the email talks about developments in the “not-yet-completed design of the new model, including PCB designs, number of LEDs and increases in battery capacity”. He says that “again, this was not the model that was eventually released to the market about two years later” and that “all of this information is intended to be shared only with the CI Network and not to any other persons”. He says that the attachment to that email was described as a “pre release data sheet” and the document “was never designed to be released to the public”. He adds this:
In fact, we were still selling the Gen I model at the time, and from my experience in marketing and running companies, it makes no sense for Exlites to turn people away from the current model being sold by comparing it side by side to a new model that did not even have a firm release date, since the new model was still undergoing further development.
195 As to the email sent by Mr Arieni over two years later, on 12 June 2012, he says this:
[Annexed is the email] sent on 12 June 2012 to the wider Exlites distributor network when the Gen II model finally became available. The recipients are essentially Exlites stockists that purchase Exlites products from the CI Network, although by that time the CI Network [had] evolved into three major exclusive distributors across a number of states, as is apparent in the document titled “Australian Distributors and Resellers” attached to the email … This type of email to the wider distributor network is completely different in nature to the type of emails that I sent to the CI Network.
Aspects of Mr Arieni’s oral evidence given in cross-examination
196 It is now necessary to examine aspects of Mr Arieni’s oral evidence.
197 Mr Arieni gave evidence that the GENI solar bollard was first sold in 2006 and that he sent the last shipment of GENI solar bollards on approximately 31 May 2010.
198 Mr Arieni was taken to a webpage from the Exlites website dated 31 July 2009 (Exhibit 2) announcing that Exlites was out of stock of the solar bollard but that “coming soon” would be the “All New Fully Redesigned and Locally Made: ‘2009 GENII Solar Bollard’”. The webpage depicts a “recycled bollard pole” and light head and an “aluminium bollard pole” and light head. It also shows, in the distance, illuminated light heads. As to the two principal images on p 1, one image shows a “flattened” top to the light head, where according to Mr Arieni, the photograph had to be “reduced” or “squished” in size to fit into the same perspective of each other photograph. Mr Arieni gave evidence that the photograph shows a GENI solar bollard.
199 Mr Arieni said that although the Exhibit 2 webpage suggested that Exlites was out of stock of solar bollards, he was “1000 per cent sure” that in 2010 he continued to have bollards available.
200 Mr Arieni was also taken to an Exlites webpage of 12 October 2009 (Exhibit 3) which recites: “Solar Bollard 2009 Model Currently Available: Limited Stock Only Coming Soon “GENERATION II” for Release January 2010”. The webpage describes five features of the “2009 GENII”. Mr Arieni gave evidence that these were the “expected features but never became the actual features of the actual production version of the product”.
201 Mr Arieni was asked whether it remained his evidence that the GENII did not reach production until July 2012 and that there were no deliveries prior to July 2012. Mr Arieni responded that it “might have been June 2012” although “production was full assembly. I’m pretty sure it was July because that’s when we started to dispatch the orders” which he says Exlites had from the CIN – “all the distributors they became at that time”. Mr Arieni gave evidence that Exlites had forward orders from its distributor network and the first production run was in June or July 2012.
202 In the email of 12 June 2012 (see  of these reasons), Mr Arieni told the addressees that the GENII was “available with the first production run near sold out”. Sun-Wizard emphasises an inconsistency between Mr Arieni’s evidence that the GENII did not reach production until July 2012 on the one hand, and the email of 12 June 2012 referring to the production run “near sold out”, on the other hand.
203 Mr Arieni explained that Exlites had orders from distributors which would be filled first at the time of production with limited numbers (or stock) thereafter for allocation. Mr Arieni also explained that changes were still being made to the GENII in June 2012 (new PCB design to accommodate the lithium battery) and so the GENII was “first installed”, he believed, “as a sellable product around mid-2012 – July [or] post [July]”. Mr Arieni also said that although some display samples had been set up, no production versions had been “installed anywhere because we weren’t actually ready to produce them”.
204 Exhibit 4 (the email of 12 June 2012 and attachments) contains an image of solar bollards installed on a pontoon by Bellingham Marine. Mr Arieni recognised the image but was unable to say whether the installation had actually occurred in June or July as the image may have been “photoshopped” with a GENI bollard for the “network”.
205 Mr Arieni gave evidence that the Exlites distributors at 12 June 2012 were All Round Supplies (for New South Wales, Queensland and the Northern Territory, Mr Mutton), Solar Lighting Solutions (for Southern Victoria and Tasmania, Mr Steele; and also for Northern Victoria and South Australia, Mr McClure) and Phoibos (for Western Australia, Mr Peter Savage). Mr Arieni thought that those arrangements commenced in 2011.
206 At para 18 of Mr Arieni’s declaration of 5 September 2016, he describes ARS as a “licensed reseller of the lights supplied by Exlites” and in his oral evidence he confirms that that was so “at 2012”.
207 Mr Arieni accepted that he had not used the term “Certified Installer Network” in the declaration but that, in the declaration, he “just generalised it as a reseller”.
208 Mr Arieni gave evidence that ARS was a Certified Installer. He described a Certified Installer as “a company that we built a relationship with in the initial period – in the initial days [as] part of a plan of having geographically located partners to sell our products into a region, ie, be it … not on a state basis but Sydney, Newcastle, Darwin or Melbourne”. He said “[t]hat was a CI”. He gave evidence that a “licensed reseller is what that became – a state based distributor [and] some of them might have been sellers and installers”.
209 Mr Arieni was taken to the Investment Summary mentioned earlier (part of Exhibit 6). Mr Arieni accepted that Certified Installers are “territory-based distributors” and that his intention was to replace the former distribution arrangement (the earlier Orca arrangement) with “a different model” comprising a “series of distributors … due to performance”, to make sure Exlites “had a full market presence across Australia”. Mr Arieni accepted that the “role of the certified installers was to manage and on sell the full range of Exlites projects and lighting solutions”. Mr Arieni gave evidence that the first person he spoke to about his idea for such a network was Mr McClure and then Mr Steele. Mr Boatswain and Mr Lush of Sovereign Energy Pty Ltd were spoken to (and also T&D Underground Power Services). Sovereign Solar was another entity spoken to but it was an entity jointly owned (50/50) by Sovereign Energy and “T&DUPS”.
210 In explaining the idea of the CIN to potential members, Mr Arieni accepted that the “CIN Overview Document” was an extract from the Investment Summary setting out the elements of the idea from section 4.4 and following. Mr Arieni gave evidence that multiple versions of the Overview Document (and the Investment Summary) were written and the idea of the “CIN Network was something that I was developing over 2009”.
211 Mr Arieni referred to the map of Australia (as it appears at Court Book p 388 marked-up as at 26 February 2010) and explained the commencement of the network and changes subsequently made to it, in this way (at T, p 113, lns 19-44):
The CI Network actually came into reality because these territories were actually given to those people as marked on here and any inquiries from that territory [were] forwarded on to those people directly so they were part of it. … That or [the] map is basically the locations of where the CIs territories would be so any inquiry that came into … that region, specific to those CIs they would give them that inquiry. If the inquiry came to us, it was passed on to them to take care of it.
[I]t [is] actually what came into play, but people dropped off over time. A lot of people came on – a lot of the initial part of the CI Network [involved] … a lot of focus on the new bollard coming into [the] market. Unfortunately, due to delay things changed over time and those parties like All Round Supplies, Steele and McClure, SLS and Phoibos in Western Australia who were with us for a long period of time, became the distributors. So they were actually given a further option of a state-based market on their plate … to gain financial profits from it. All Round Supplies, SLS and Phoibos became distributors. … [T]he CI Network and distributors are two different beasts … because the CI Network was other companies as well.
212 As to the people and firms mentioned on the map in the various places, Mr Arieni said this (at T, p 115, lns 30 and following):
These were people in those locations that we were sending the inquiries to. The people – no one was … actually appointed under any document. … It was just an agreement between the parties for the CI Network. … It was an agreement actually done in printed email communications … so in discussions … We had an arrangement with [each of the persons on the map as marked at 26 February 2010] for them to take care of that territory ... They [were] exclusive distributors for that specific region – for each of them.
[Referring to the map] … at the peak of the network, there were about 11 [certified] installers [and] that’s the maximum [Exlites] ever had [and although] the map shows more, it’s just because T&D, UPS and Sovereign Energy were, as I said, one. They were just names of the company that we referred them – they’re Sovereign Energy.
213 As to the email of 17 February 2010 (see  of these reasons), Mr Arieni gave oral evidence that the members of the Certified Installer Network were “Greg McClure, Greg Steele, Lester Boatswain, Tim [of T&DUPSQ], Adrian Kedwell, Earl Palfrey, Aileen or Ian Fahl Shane McNeilly, Kym Scutter, Greg Mutton [ARS] … Peter West [and] Darryl [of Solarite]”.
214 As to the email of 17 February 2010, Mr Arieni observed that “it’s basically an email I’m sharing within the group, which is a closed group which – you know, it’s sharing of information of what we’re doing and keeping them in the loop [and] I don’t consider that information confidential in that email”.
215 As to the four Certified Installers who went on to become exclusive distributors for Exlites, namely, ARS, McClure Electrical, Solar Lighting Solutions and Phoibos, Mr Arieni gave evidence that they became distributors in 2011.
216 As to the “2010 Product Range Catalogue” attached to the email dated 10 February 2010 to the group Mr Arieni describes as the CIN group, Mr Arieni accepts that the product catalogue was not confidential although the fact that there had been tooling delays as described in the email was a matter, “confidential to the resellers” because it was “an internal issue”, notwithstanding that statements had been made about a GENII product “coming”.
217 As to the email of 15 February 2010 (see  of these reasons), Mr Arieni did not accept the proposition put to him that something was to be treated as confidential only when he said so in the communication. He gave evidence that he did not always say things were confidential but when it came “specifically [to] pricing”, he had made observations of that kind (about confidentiality) “to make sure that they [the distributors] didn’t pass it out to wholesalers, trade or retail [and that] they knew to keep it internally”. Mr Arieni maintained that the majority of information shared with the group “back and forth, I should say, was confidential between us … [b]ecause it was in their own financial interest”. Mr Arieni accepted that it was in both the interests of Exlites and the interests of the group to promote “[a] product that was actually available and we [which seems to be a reference to Exlites and the group] were still promoting it [the GENI] and selling the GENI in this period of time”.
218 As to the emails dated 21 April 2010 and 3 May 2010, Mr Arieni accepted that they were sent to the particular individuals within the group at that time as described by Mr Arieni in his evidence (as to which see - of these reasons which did not include the so-called investor or financier group).
219 As to the email of 21 April 2010, Mr Arieni was asked whether the first point under the heading “Benefits” (“Lower battery cycle increased life”) is confidential. Mr Arieni regarded that matter as “confidential in here” as showing part of the GENII and “also [the] output of light”. He described it as “basically showing the difference between the GENI and GENII to the CI Network”. Mr Arieni seemed to be speaking about the email overall rather than simply the increased life of the battery. He described the email as something “[t]o keep them [by which he means the CI Network] in the loop of what was coming”.
220 In the email, Mr Arieni says that he “would like your opinions as most of you that this has been emailed to re-sell these for us into your market globally”. The reference to Mr Arieni seeking the opinions of the CI Network members is a reference to their opinions about the document attached to the email about which he makes no particular comment as he “will let the document speak for itself”; the idea of using static LED colours, blue, red, green, yellow/orange; and whether the milliamp draw from the PCB ought to be reduced by 20% to 25% in each model to reduce brightness “as we are far more brighter than we have ever been before with these new versions (with reflector enhancement still to come)”. Mr Arieni accepted that he intended the CI Network to promote these features but, “when the product was available”. Mr Arieni put the exchanges within the CI Network in this way:
Look, there – the communications back and forth showing the – showing images, outputs, changes, getting feedback from them, because they’re at the coalface. They know the market, so you take on board opinions to ensure the product is developed correctly in their opinion as well.
221 The proposition was put to Mr Arieni that apart from his “say so” there was no evidence of any feedback from any CI Network member. Mr Arieni responded that there was “plenty of feedback and opinion”.
222 As to the email of 3 May 2010, it attached a pre-release data sheet on the new 2010 bollard which was said to show the recipients “exactly the size difference” between the GENII and the old model and to provide the CI Network members with “new system design facts prior to the new product information brochure that will be completed shortly once all certifications have been completed”.
223 The email also tells members of the CI Network that Exlites will receive the new PCBs this week to enable “the lux trials and make the final decision on PCBs (LEDs)” that would then be available. The email takes up the comment in the email of 21 April 2010 and says that the PCBs “coming have the power draw reduced” and there are “other variants coming to trial just to see how low we can take the new 3 LED version but still keep it better than the previous 6 LED version and what we can do with the new 6 LED version”. The email also draws attention to the percentage increase in “battery capacity” and “solar panel input” as compared with previous versions.
224 As to this information, Mr Arieni said that the “resellers could share that a new product was coming and there would be some added benefits”. The proposition was put to Mr Arieni that there was nothing in the email “about keeping this confidential” and nothing that “identifies this information as confidential”. Mr Arieni said this (at T, pp 132-133, lns 37 and following):
[T]he CI Network, who were given price advantage, direct access to purchasing products that we would normally sell via us, making our profit to market – they were getting direct. We introduced them to suppliers, to buy at our special price, our special agreed buy price, and we gave them plenty of financial gain. And they had opportunity to sell to markets that they would never – they would compete directly with and be able to sell to those people and make a profit from them, rather than compete against them.
The CI Network was a closed group and there is a lot of communication back and forth, face-to-face discussions, meetings face to - at our premises. And everybody was of the opinion and agreement that we would keep a closed shop, as per even the pricing, because if I disclosed the pricing outside of the network then they would be at a financial disadvantage.
225 Mr Arieni was pressed with the proposition that while aspects of the pricing as between CI Network member, distributor, wholesaler, trade and retail might be confidential, “everything else can be sent out”. Mr Arieni described that proposition as “incorrect”.
226 Mr Arieni was taken to the annexed brochure (Court Book pp 283 and 635) and the proposition was put to him that it was “a marketing brochure”. Mr Arieni described it as “a layout of what the product will offer, showing the light outputs from the previous email again, and giving them an idea of exactly what’s coming”. Mr Arieni did not accept that he wanted the resellers (CIN members) to tell people that they were proud to present the latest generation of heavy duty vandal resistant solar bollards “because we weren’t in production at that time” and “[w]e were still having tooling issues …”. Mr Arieni accepted that he had promoted a “new model coming” in 2009, but tooling problems disrupted what was supposed to be a “12 week process”.
227 Mr Arieni was taken to his email of 26 May 2010 to the CI Network members: see  of these reasons. In that email, Mr Arieni tells them of price changes due to exchange rate changes; particular panel size changes; changes in bollard pole prices due to “4 RIVLOKS” and price increases in aluminium; that the 6 LED 50mA PCB is to arrive on Monday (31 May 2010); that he will “test confirm”; that the light heads will be booked in for “NATA Photometric testing so we can get spacing for the 3 and 6 LED versions”.
228 Mr Arieni also tells the CI Network members in that email that the “2010 solar bollard will be late July now and all the moulding issues have been resolved finally so we can start moving forward”. The July timing may have reflected accommodating the arrival of the LEDs, test confirmation and a favourable outcome in the NATA Photometric test.
229 The proposition was put to Mr Arieni that his statement as described at  of these reasons meant that members of the CI Network could “start promoting”. Mr Arieni’s evidence is that the email does not say that the recipients should or could “start promoting” but “they were welcome to discuss a new product coming”.
The Confidentiality Agreements
230 One of the issues in the proceeding is whether each or any member of the CI Network, in the period from the adoption of that idea to the time of the emails just discussed or at some later time reflecting a state of arrangements which prevailed from the time the relevant entity or firm became a member of the network, entered into a confidentiality agreement. Mr Arieni’s evidence is that the members of the CI Network each signed such an agreement but Mr Arieni is unable to locate any of those agreements. Mr Arieni’s evidence on that matter is this:
So in January 2013, due to the size of my PST folder, which dated back to 2003, and I lost a lot of information from the early years – I came across Microsoft 365, which was cloud-based, where we could actually upload it and it would auto archive. So I transitioned us across to that and both myself and Mr Fry lost emails in that transition.
231 Mr Arieni also said this on that topic:
Again, there is a lot of information missing from my PST file, because it was a 21 gig PST file and it used to corrupt continuously and we used to use – I had to use a scanned PST program in Windows to fix it, which would actually then delete bad sectors – it deleted a lot of the sectors.
232 Exhibit 8 is an example of a Confidentiality and Restraint Deed sent by Mr Arieni to “SLS” and Phoibos on 15 June 2012. The proposition was put to Mr Arieni that this is the first Confidentiality Agreement in relation to confidentiality obligations surrounding the distribution of products. Mr Arieni disagreed.
233 There are a number of Confidentiality Agreements in evidence annexed to Mr Arieni’s affidavit.
234 The first is between Key Logic (under its former name) and Mr Peter Cole dated 19 May 2004. Mr Arieni could not recall Mr Cole as he says he has met so many people over the years. However, the document recites that Mr Cole seeks access to the company’s confidential information (broadly defined) and clause 2 gives rise to obligations of confidence. It is signed by both parties.
235 The second agreement is dated 5 March 2005 between Jandawn Pty Ltd (which is a company associated with Chris Shannon, one of the partners in Orca) and Key Logic. The agreement recites that the parties propose to study the feasibility of ventures and for that purpose they will need to give and receive, to each other, confidential and proprietary information in relation to the particular ventures. It recites that the parties wish to maintain the confidentiality and integrity of all confidential information (broadly defined) and the document gives rise to the corresponding obligations. It is signed on behalf of Jandawn, but not by Key Logic.
236 The third agreement is dated 6 April 2011 between Exlites and Premier Solar Australia (Mr Daniel Cobb). Mr Arieni says that Mr Cobb owned a solar lighting company and he had proposed merging his business with Exlites (or Key Logic or both). For the purposes of that business discussion, the parties entered into a Confidentiality Agreement preserving all exchanges of confidential information during the discussions in relation to transaction. The agreement was signed on behalf of Exlites by Mr Arieni and witnessed by Mr Fry.
237 The fourth agreement is dated 1 September 2009 between Exlites and Nathan Trailers Pty Ltd. Mr Arieni gave evidence that Nathan Trailers is a manufacturer which was working with Exlites. The document describes Exlites as the inventor of a system for solar powered lights to use on worksites and other venues. It recites that Nathan Trailers has developed a trailer upon which the lights developed by the inventor can be mounted for transportation and use. It recites that each of the inventor and Nathan Trailers has developed its products at its own cost on the basis that the products would be used together as readily movable work lighting and that the parties have agreed that they will work together to provide further products and that each will work exclusively with the other in respect of transportable solar powered work lighting. Clause 8 provides for confidentiality obligations one to the other in connection with the disclosure of confidential information as defined. The document is signed by both parties.
238 The fifth agreement is dated 18 May 2011 between Exlites and Metcraft Industries Pty Ltd (Mr Gary Lyell). Mr Arieni gave evidence that Metcraft is a contract manufacturer which was prototyping a lighting tower for Exlites. The agreement recites that the parties propose to study the feasibility of one or more technologies (which is defined to mean any commercial relationship between the parties). The agreement recites the parties need to give and receive confidential and proprietary information to each other in relation to any particular technology and that they wish to maintain the confidentiality and integrity of all confidential information (broadly defined) so exchanged. Clause 3 of the document creates the corresponding obligations. The document is signed by Mr Arieni on behalf of Exlites. However, the document in the Court Book is not signed by Metcraft. The proposition was put to Mr Arieni that Metcraft had not signed the document. Mr Arieni said he could not answer the question as he does not have the original copy because “you take it to them, two copies, you’ve signed it, they then sign it; they keep one copy, we take one copy back, put it in a hold folder and it goes into our file cabinet that I had”.
239 The sixth agreement is entirely blank with no counterparty recorded in the document and no signatures.
240 The seventh agreement is one between Key Logic and Committed Capital Client Services Pty Ltd (Mr Tim Hosking) dated 9 June 2005. That company was looking at an investment opportunity which resulted in Key Logic entering into a Confidentiality Agreement to enable exchanges of confidential information (broadly defined) for the purposes of the examination of the potential investment. It is signed by both parties.
241 The eighth agreement is one between Exlites and Scott & Ensoll dated 11 August 2010. The agreement provides that the parties propose to study the feasibility of projects and to that end they need to give and receive confidential and proprietary information one to the other. The agreement recites that the parties wish to maintain the confidentiality and integrity of all confidential information (broadly defined) and clause 3 establishes the corresponding obligations. The agreement is signed by Mr Arieni on behalf of Exlites but not signed by Scott & Ensoll.
242 Each of these agreements has its own particular circumstances and context and none of them represent an agreement as between Exlites and one of the companies within the CI Network in the period leading up to 7 June 2010. Nevertheless, the sequence of agreements between 2004 and 2011 reveal a consciousness on the part of Exlites/Key Logic of the importance of confidentiality surrounding aspects of its projects. Nevertheless, so far as this proceeding is concerned, there is no agreement in evidence as between Exlites and any one of the CI Network members the subject of the emails of 21 April 2010 and 3 May 2010 (or the emails of 15 February 2010 and 17 February 2010) expressly recognising an obligation of confidence concerning information (including visual aspects of shape and design) in relation to the GENII product.
Further aspects of Mr Fry’s evidence
243 It is now necessary to return to aspects of the evidence of Mr Fry and his intersection with the work undertaken by Exlites and Nathan Trailers and the agreement between Exlites and Nathan Trailers (see  of these reasons).
244 Shortly after Mr Fry joined Exlites, Mr Arieni took him to visit Nathan Trailers. Nathan Trailers had been engaged to construct a solar powered lighting plant designed by Mr Arieni. Mr Fry says that he made several modifications to the design to resolve particular problems. The product being developed was to be a solar powered lighting trailer that would take the place of diesel powered lighting plants used on roadworks, earthworks and in mining applications. It was a product being developed by Exlites in conjunction with Nathan Trailers.
245 Mr Fry says that he was engaged in making “very significant modifications” to the design “over a couple of months” and in doing so he was dealing directly with Nathan Trailers. Mr Fry was taken to the agreement between Exlites and Nathan Trailers of 1 September 2009. Mr Fry accepted that the agreement relates to the development of the product to which Mr Fry had been making his very significant modifications. He also accepted that he did so in his capacity as a director of Exlites. Mr Fry was taken to the elements of the definition of “Confidential Information” in the agreement and accepted that clause 1 defined that term to include “information about the business, customers, services and products of a party to the agreement” and “intellectual property of any kind belonging to a party including the right to apply for registration of intellectual property”. Mr Fry was also taken to the obligations of each party to treat the confidential information as secret and confidential.
246 Mr Fry accepted that, according to the document, the information relating to the development of the design that he worked on for the new product developed in conjunction with Nathan Trailers was regarded by Exlites as confidential. However, Mr Fry also took the view that at the time when he was making the modifications to the design, the information relating to the development of the design was not something he regarded as confidential because “it was not something that was out of the ordinary”. The techniques, he said, were “common – on many lighting plants”.
247 Nevertheless, Mr Fry also accepted that the “product” (the lighting plant) was “new”; that the product “hadn’t been put on the marketplace”; that the product had not been put into the marketplace because Mr Fry was “still making significant modifications to the product to make it suitable to be put on the marketplace”; that, at the time, Exlites regarded information relating to the development of that new product as being confidential, at least according to the document; and, importantly, that the “reason why Exlites regarded that information in relation to the development of the new design, the new product designed with Nathan Trailers, as being confidential, was because Exlites would not want the designs of new articles not yet released to the public to be made publicly available”.
248 As to the GENII product, Mr Fry, as already mentioned, gave evidence that he was engaged in resolving the radius problem; that it was “fair to say” that the process of developing the tooling to the point where Exlites had a product suitable to be put on the marketplace was “a long and difficult process” with several changes to the tooling “over about 18 months”; and that the process of designing and developing the GENII solar bollard was a “very expensive process” with Exlites initially investing significant amounts of money.
249 As to confidentiality agreements, Mr Fry gave evidence that the only confidentiality agreements he could recall having sighted prior to 6 April 2011 while he was at Exlites were those entered into with “Exlites’ manufacturers, designers or financing companies but most of them never ended up being fully signed by the parties”. An example of a confidentiality agreement with a manufacturer given by Mr Fry was that “when the second and third solar lighting plants were being constructed and being built, … there [were] confidentiality agreements organised then for the construction of those products”. Mr Fry said that there were a couple of manufacturers, the first being Nathan Trailers and then with another company on the Sunshine Coast although Mr Fry could not recall the name.
250 Mr Fry gave this evidence (at T 3, p 44, lns 4-9):
[T]here [were] confidentiality agreements done or discussed at least for the manufacture of the second trailer after I had started with Exlites. And there was another company that was involved with preliminary discussions. And I can’t recall who they are either, but I recall Mike [Arieni] discussing about confidentiality agreements for them.
251 Counsel for Key Logic asked Mr Fry why Exlites had entered into confidentiality agreements with those manufacturers and Mr Fry responded: “To protect the IP that was put into those particular items … that was unique to Exlites”. Mr Fry was then asked the following questions and gave the following answers (at T 3, p 44, lns 17-43):
Counsel: So could I put it to you that Exlites didn’t want to prejudice the intellectual property rights that it might have in particular developments by disclosure to a manufacturer that wasn’t protected by confidentiality?
Mr Fry: That’s right. That’s – that’s common. Yes.
Counsel: That’s common?
Mr Fry: Yeah.
Counsel: Now, the second class of persons that you say you recall Exlites entered into confidentiality agreements with was designers?
Mr Fry: I don’t know if there’s anything actually drawn up, but it was expected with the designers that the designs were confidential. Yes.
Counsel: Why was it expected that the designs would be confidential?
Mr Fry: Well, they would obviously – if they’re designers and they’re doing drawings, and artwork and … engineering drawings, they would be doing it for other people as well, so they could disclose what’s happening with us or with Exlites at the time with other competitors.
Counsel: Yes. Exlites was concerned that it didn’t want information about its development of designs to be disclosed to competitors?
Mr Fry: That’s right.
Counsel: And do you accept that there’s a – or was it understood that there was a risk that, if the design was disclosed, there could be counterfeiting taking place, particular in other countries, that’s an issue for the industry?
Mr Fry: Well, that’s quite common … yeah.
252 After that exchange, Mr Fry was then asked the following questions and gave the following answers (at T 3, p 45, lns 4-12):
Counsel: Let me put this to you in light of your evidence, Mr Fry, that you would accept, would you not, that whilst the GENII Solar Bollard was in the process of being developed, Exlites would have wanted to keep information concerning the development of the design confidential; you accept that?
Mr Fry: Yes.
Counsel: Thank you. Now, whilst you’re a director of Exlites, did you ever sign a non-disclosure agreement or confidentiality agreement on behalf of Exlites?
Mr Fry: I did sign some agreements, but exactly what they were for and what they were, I don’t recall but there [were] agreements that I did sign. Yes.
253 Mr Fry was taken to the agreement of 18 May 2011 between Exlites and Metcraft and the obligations of confidentiality in that agreement. Mr Fry gave evidence that Metcraft was the company that built the last Exlites solar powered lighting trailer. Mr Fry accepted that consistent with his evidence quoted above, the information relating to the development of that new product was confidential between the parties. Mr Fry witnessed Mr Arieni’s signature on behalf of Exlites on the document. The document in evidence is not signed by Metcraft. Mr Fry could not recall whether Metcraft signed a counterpart agreement.
254 Mr Fry accepted that he (in the name Ian Reginald Fry (Auto Sun & Air)) had entered into a “Confidentiality/Non Disclosure Agreement” with Exlites. He accepted that he had signed the document in evidence. The document is undated. Mr Fry could not recall having signed the agreement. The circumstance that the document is undated caused Mr Fry to be unable to accept that it was an agreement that he must have signed before joining Exlites. However, Mr Fry accepted that in the identification of the parties, the reference to “Auto Sun & Air” was a reference to the business Mr Fry was operating at the time he became a director of Exlites and in the period “prior to becoming a director of Exlites”. The document being undated, Mr Fry was unwilling to accept that he signed it prior to becoming a director of Exlites as it may have been signed later as Auto Sun & Air continued to operate after Mr Fry became a director of Exlites.
255 Mr Fry was asked about his first meeting with Mr Arieni which Mr Fry presumed was a discussion about aspects of the Exlites business. The date put to Mr Fry was February 2010. Mr Fry could not recall when that meeting occurred but Mr Fry seemed to accept that he “may have” signed a confidentiality agreement in that period. That passage led to the following questions and answers (at T 3, p 39, ln 30 – T p 50, ln 23):
Counsel: [C]onsistent with your earlier evidence, you would accept that even if you hadn’t signed the confidentiality agreement with Exlites in that period leading up to you becoming a director in 2010, you would have understood that any disclosure Mr Arieni made to you of the development of the GENII bollard would have been confidential?
Mr Fry: Yes, I would because it involved me as well. I was part of the company.
Counsel: Now, you’ve got more than 18 years’ experience in designing products, and you’ve been a director of companies that own and licence intellectual property rights?
Mr Fry: Yes.
Counsel: And when you were a director of Exlites, you worked closely with Mr Arieni?
Mr Fry: Yes. …
Counsel: Well, were you aware that Exlites intended to seek intellectual property protection for its GENII bollard?
Mr Fry: Yes I was.
Counsel: And you understood, of course, because of your experience, that any public disclosure of the design before filing for those rights would be potentially prejudicial to those rights?
Mr Fry: Yes.
Counsel: And you understood, as a result of your experience, that maintaining confidence in products under development was important to protect those intellectual property rights?
Mr Fry: Well, it is, with any intellectual property, yes.
Counsel: And you understood that it was important to keep product development confidential from competitors? I think you have already accepted that. Do you accept that?
Mr Fry: Yes.
256 As to the question of when the GENII model became available to the public, Mr Fry accepted that the GENII solar bollard was not made available to the marketplace in 2011 and that “it probably wasn’t sold commercially in 2011 because it wasn’t – the moulding wasn’t operational. So it couldn’t have been”. Mr Fry added that there were a lot of moulds and “a lot of stuff” around and a “lot of assembled items” but it wasn’t a fully commercial product at that stage, and Mr Fry accepted that a part of his contribution was trying to fix problems with the moulding with the result that “the GENII solar bollard was still in development in 2011”.
257 Those matters led to the following exchange (at T 3, p 51, lns 33):
Counsel: Do you accept it would have been to Exlites’ competitors’ advantage to learn of the details of the GENII design before its public release? …
Mr Fry: It’s possible, but I’m not aware of any – of the competitors that would have had – that had something that was similar – that was similar to that and anyone who would have actually gone out and tried to copy it. It probably would have been, to an extent, yes.
Counsel: [T]hat’s because if a competitor didn’t have something similar, that’s why you would want to keep it confidential because you wouldn’t want the competitor to start making something that was similar. Do you accept that?
Mr Fry: That’s right.
Counsel: So for example, you wouldn’t want a competitor to see the conical shape of the reflector or the diffuser and copy that, particularly given that it confers the advantage we discussed earlier about the evenness of light. You wouldn’t want a competitor to know about that, would you?
Mr Fry: It’s one particular part of the product. Probably not, no, at that stage.
258 As to the CI Network, Mr Fry acknowledged that he had heard the evidence of Mr Arieni and Mr Palfrey concerning a number of benefits a person enjoyed as a member of the CI Network including that members received a financial benefit in the form of a price reduction. Mr Fry accepted that that was so. Mr Fry also accepted that “in particular they paid a lower price for goods than resellers or wholesalers … [a]ccording to what was on the pricing structures”. Mr Fry also accepted that there was an exchange of confidential information within the CI Network adding that “[t]here’s always an exchange of confidential information between individuals”.
259 It is convenient to now mention another matter relating to the oral evidence of Mr Fry.
The Innovation Patent
260 Mr Fry also accepted that Sun-Wizard had filed an Innovation Patent Application with a filing date of 25 August 2014. Exhibit 22 shows that the title of the patent is “Solar Powered Outdoor Lighting Device”. The application was granted on 25 September 2014 and certified on 26 March 2015. Sun-Wizard’s request of the Registrar to examine Key Logic’s registered design was made on 16 February 2015. Mr Fry accepted that he was directly involved in the preparation of evidence for Sun-Wizard’s objection to the Registered Design.
261 The patent application initially recited Mr Fry as the sole inventor. However, it was subsequently amended to add Mr Richard McCleary as a co-inventor. Mr Arieni is not recited as one of the inventors. Mr Fry says that that is so because Mr Arieni was not a co-inventor of the invention.
262 Mr Fry accepted that one of the integers of claim 1 of the patent is the presence in the product of a funnel-shaped diffuser which is conically shaped. Mr Fry also accepted that the conical shape, at least in part, helped to confer an even light pattern “in the same way” that the conical reflector in the GENII model creates “a more even light pattern”. Although Mr Fry did not regard Mr Arieni as having contributed to the invention the subject of the patent (that is, a co-inventor), Mr Fry accepted again that Mr Arieni was “the person who designed the conical shape of the reflector … in the GENII”; that the conical or funnel shape provides a technical advantage in assisting in creating a more even light pattern; and that that feature is an integer of claim 1 of the patent.
263 Mr Fry also accepted that Sun-Wizard promotes the innovation patent on its website as an “important part” of providing a “marketing advantage” to Sun-Wizard.
264 So it can be seen that Mr Fry, through Sun-Wizard, has a direct commercial interest in a patent for a rival product that incorporates as an integer of claim 1 of the patent, the conical-shaped diffuser created, as Mr Fry concedes, by Mr Arieni.
The evidence of Mr Kedwell and Mr West
265 As to the issue of confidentiality agreements, it is necessary to examine the evidence of Mr Kedwell and Mr West.
266 Mr Kedwell received the emails of 10 February 2010, 15 February 2010, 17 February 2010, 21 April 2010 and 3 May 2010 (and in all probability the email of 26 May 2010).
267 Mr Kedwell was a member of the CI Network.
268 Mr Kedwell owned and operated Planelec Services Pty Ltd (“Planelec”) with his business partner, Mr Martin Swift, from 1996 until about 2012. Mr Kedwell says that in late 2009 or early 2010 he was contacted by Mr Arieni to discuss the potential for Planelec to become a distributor of the solar lighting products of Exlites including the Exlites solar lighting tower and solar bollards. Mr Kedwell and Mr Swift met with Mr Arieni and Mr Fry at the Exlites premises to discuss Planelec “potentially joining what Mike called the Certified Installers Network”. Mr Kedwell says that he remembers receiving a copy of a Confidentiality Agreement prior to the meeting “which Martin and I signed and brought to the meeting to give to Mike …”. Mr Kedwell says that he cannot recall if Mr Arieni “countersigned” the agreement at the meeting, but he recalls seeing that “Ian Fry was the witness for Mike’s signature on the [Agreement]”.
269 Mr Kedwell says that he has not been involved in Planelec since 2012 when it was placed under administration and he has not been able to locate a copy of the Confidentiality Agreement.
270 In his oral evidence, Mr Kedwell said that he received the Confidentiality Agreement on the day when he attended the meeting. Mr Kedwell was sure that the document was a Confidentiality Agreement. Mr Kedwell’s evidence was that he “definitely received it on the spot because I signed it when I was there” and “[i]t was there definitely when I signed it because we went into the boardroom to sign it at that point”. Mr Kedwell seemed a little confused about when he received the document and gave evidence that he assumed he “may have received it beforehand”, “but I definitely had one there when we signed it at the time”. Mr Kedwell was taken to a series of emails between Mr Arieni and Mr Kedwell including emails between 17 November 2009 and 25 November 2009. In the email dated 17 November 2009 from Mr Arieni to Mr Kedwell, Mr Arieni says: “Thank you for your time today and attached is an extract of the draft CI document”. Mr Arieni then sets out a range of information about the products and their components (technical and otherwise). Mr Kedwell responded on 24 November 2009 mentioning the “final agreements” for the “CIN” and sought from Exlites a “Memo of Understanding” between the two companies. Mr Arieni responded on 25 November 2009 confirming continuing discussions with Mr Kedwell concerning the opportunity for Planelec to be appointed as a Certified Installer for North Sydney to Port Macquarie subject to a final commercial agreement. Those emails are Exhibit 19.
271 It seems likely that Mr Kedwell received the Confidentiality Agreement in November 2009 although the email from Mr Arieni refers to an “extract of the draft CI document” so it may be that Mr Kedwell’s recollection of receiving what amounts to the entire agreement on the day, may well be correct. It also seems that the meeting occurred in late 2009. As to the execution of the document, Mr Kedwell says: “Ian, I met on the day … we went into the boardroom, as I’ve discussed, and signed the document there. … So the section or paragraph where both Martin and myself signed was witnessed by Ian on the day”. Mr Kedwell could not recall whether the document was signed by Mr Arieni. Mr Kedwell gave evidence that after he and Mr Martin signed the document, witnessed by Mr Fry, Mr Arieni “showed [them] through the premises with Mr Fry”.
272 It seems clear enough from the emails concerning the extract and the signing of the document on the day that Mr Arieni and Mr Fry thought it important to secure a Confidentiality Agreement with Planelec before showing Mr Kedwell and Mr Swift through the premises.
273 Mr Kedwell gave evidence that Planelec did not become an “exclusive distributor” as All Round Supplies continued to operate in the same area selling the same equipment. However, Planelec became “part of the Certified Installer Network [which Mr Kedwell says was “separate to what the distributor is”]”. Mr Kedwell explained that Planelec worked in a specialised area for high voltage installation work and where Planelec could not offer high voltage electrical works for installation, it planned to install Exlites’ equipment “into those locations where it wasn’t feasible to [install] power” and “[s]o it was a specific area for the Certified Installer”, “just a specific area … type of market”. Planelec was “always going to receive [referrals] for those areas … for mining, which we were working in, and for the electrical distribution network which we were working in, for a geographical area” and “[s]o wherever we were covering for our level 2 ASP [electrical] work, we were looking to cover the same area with [Exlites] products”.
274 In his affidavit, Mr Kedwell refers to the email of 17 February 2010 and says that he “always understood information regarding products under development, Certified Installer pricing and Exlites business opportunities and strategy in these emails to be confidential”.
275 As to the email of 17 February 2010, Mr Kedwell regarded himself as a Certified Installer at that time. As to the email, he did not regard the first paragraph as confidential but regarded the second, third and fourth paragraphs as confidential as those paragraphs discuss dealings with a potential customer. Mr Kedwell regarded much of the information in the email as confidential even though Mr Arieni did not. Mr Kedwell accepted that parts of the email were not confidential. Mr Kedwell did not regard the “current 2010 Product Range Catalogue” attached to the email of 10 February 2010 sent to him and others described as the Certified Installer Network, as confidential “if this is a published excerpt that we can actually supply to customers”. Mr Kedwell did not see it as confidential if, as a fact, it could be distributed. Looking at the brochure at Court Book p 615 and follow, Mr Kedwell regarded it as “definitely marketing material that we could distribute”.
276 As to Mr Michael West, he gave evidence that he operated a business under the name Sunshine Solar Life (“SSL”) from approximately 2004 to 2010 together with his business partner, Mr Filliponi. He says that he met Mr Arieni about 20 years ago and that SSL began distributing Exlites products in about 2007. Mr West says that at 2007 SSL was not buying solar bollards from Exlites. Rather, it was buying solar panels. He says that he recalls signing an agreement with Mr Arieni before commencing business dealings with Exlites. However, he cannot recall if it was a Confidentiality Agreement or a Distribution Agreement with a confidentiality clause contained within it, but he says that he “specifically remember[s]” that the agreement did have confidentiality clauses.
277 Mr West also says that he recalls that Mr Arieni only gave him general information about Exlites business and products prior to signing the agreement and that Mr Arieni insisted that Mr West sign “an agreement” before providing “further and more specific information”. He also says that in 2009 when Mr Arieni introduced the Certified Installer Network for Exlites, SSL chose to “transition into a Certified Installer role”. In oral evidence the proposition was put to Mr West that he thought that in 2009 he signed a confidentiality agreement although he cannot now find or recall it. That proposition was based on a sentence not read in Mr West’s affidavit but which was taken up in this part of the cross-examination. In that sentence, Mr West said that he could not now recall specifically a further Confidentiality Agreement with Exlites in 2009, but his belief was that he signed such an agreement with Exlites before joining the Certified Installer Network. Mr West says that having regard to the circumstance that SSL has not been operating since 2010, he has not been able to locate a copy of any agreements signed with Mr Arieni and Exlites. As to SSL, Mr West says that it merged with a Melbourne-based company, Premier Solar, in October 2010. Mr West also refers to the email from Exlites dated 17 February 2010. He says that he was one of the recipients of that email and that “[i]t seemed very clear to me that the kinds of information being shared in these Certified Installer Network emails were confidential and should not be shared outside of the network”.
278 As to the nature of the arrangement between SSL and Exlites as part of the CI Network, Mr West says that SSL entered into a Solar Distributor Agreement for certain “territories” although it was not an exclusive territory arrangement. As to whether it was an “exclusive product arrangement”, Mr West said: “Well, it could be – you could say it was exclusive if – in the area that we had, how it worked was that any enquiries that were received by Exlites that came into the territory that we operated in, they were forwarded on to us”. Mr West was asked whether that arrangement was exclusive and whether anyone else would be prevented from selling Exlites products in the territory in which SSL was operating and Mr West said that “that would be up to the discretion of Exlites”.
279 Mr West was asked what he understood “Exlites Certified Installers” to be and he said that “[t]hey were a group of people in particular territories that were certified by Exlites to install our products”, but not necessarily exclusively, “[n]ot per se anyway, no”.
280 As to the email of 17 February 2010 (Court Book p 397), Mr West regarded the email as confidential although it could be shared with “people who were in the network [and who] were always in the email, the face of the email …”. Mr West thought that the Certified Installer Network, and who was in the network, had been “put together by Mike, to the best of [Mr West’s] understanding by February 2010”. Mr West could not recall whether the network ever became a “formal network”.
281 As to the content of the email of 17 February 2010, Mr West said that his understanding of it was that it “was just for our – for the installers’ benefit only”. Mr West also said, on this topic, that “my understanding of the … confidentiality of it was that – of the products themselves, so if there was something sent to us at any particular time, in relation to a particular product or a new design or whatever like that, that was … definitely confidential and it wasn’t to be shared”, “[b]ut I’m not saying that everything that was sent wasn’t to be shared”. By way of example, Mr West did not regard statements about Exlites presenting a product range at a Pathways Sustainability Conference as confidential. Nor did he regard statements about a product being a week or two away from being available as confidential. Mr West did not regard statements about different changes made to a product to make it better, or changes to the shape of a product, as confidential. Mr West regarded pricing matters as clearly confidential. He did not regard Exlites product catalogues as confidential. Mr West did not regard anything in the 2010 product catalogue as confidential. As to the document attached to the email of 3 May 2010 (Court Book p 283), Mr West did not regard that document as confidential.
The “Confidentiality” email footer
282 On the question of confidentiality of information as between members of the CI Network, a matter than loomed large in the proceeding was the significance of the text of a footer at the end of each email sent by Mr Arieni which was at the end of the emails of 21 April 2010 and 3 May 2010 but also at the end of each email Mr Arieni sent including the emails of 10 February 2010, 15 February 2010 and 17 February 2010. The text is in these terms:
Confidentiality: This E-Mail is from EXlites. The contents are confidential and are intended only for the named recipient. The recipient is hereby notified that any use, copying, disclosure or distribution of the information contained in the E-Mail is strictly prohibited. If you have received this email in error, please reply to us immediately at [an email address is set out]. Please delete the document from your E-Mail system.
283 The text of the footer is set out above in clearer text for the purposes of these reasons. The text as it appears at the foot of each email is in relatively smaller text. The text in approximately the same size at it appears in the email is set out below.
Confidentiality: This E-Mail is from EXlites. The contents are confidential and are intended only for the named recipient. The recipient is hereby notified that any use, copying, disclosure or distribution of the information contained in the E-Mail is strictly prohibited. If you have received this email in error, please reply to us immediately at [an email address is set out]. Please delete the document from your E-Mail system.
Conclusions and findings arising out of the analysis of the evidence
284 So far as the issues are concerned of the establishment of the CI Network and the extent to which those arrangements engaged an obligation of confidence on the part of the members of that cohort, I have reached the following conclusions and make the following findings having regard to the analysis of the evidence:
(1) I accept the evidence of Mr Arieni.
(2) To the extent that Mr Palfrey suggests that any information in emails sent to him by Exlites in the period between formation of the CI Network and a time when all the production difficulties and problems for the GENII had been resolved and the product was complete and ready for supply (and in particular the emails of 21 April 2010 and 3 May 2010), was information that he was free to use and disclose as he determined appropriate in marketing Exlites products, I reject his evidence.
(3) I have already expressed the view that Mr Palfrey allowed himself to become an advocate for invalidity of the Registered Design, not just a witness of fact.
(4) I choose not to rely upon Mr Palfrey’s evidence as to these matters of the extent to which information communicated by the emails of 21 April 2010 and 3 May 2010 could be used by him.
(5) As to Mr Fry, he too has a direct commercial interest in seeking to invalidate the registration of the design for the GENII product.
(6) However, in the case of Mr Fry, he recognised and accepted that the GENII was undergoing design changes and tooling modifications for about 18 months; that at 21 April 2010 and 3 May 2010, the GENII was a product still under development; that it was fair to say that the process of developing the tooling to the point where Exlites had a product suitable to put on the market was a “long and difficult process”; that the process of designing and developing the GENII solar bollard was “a very expensive process”; that Exlites had invested a “significant amount of money” in the development of the GENII bollard; that during the period that the GENII solar bollard was in the process of being developed, Exlites would have wanted to keep information concerning the development of the design confidential; that he understood that Exlites intended to seek intellectual property protection for the GENII design; and that he understood that Exlites would want to keep the design confidential because Exlites would not want a competitor to start making something that was similar.
(7) Mr Fry also accepted that members of the CI Network received financial benefits from being members in that they received prices for product that were lower than the prices available to wholesalers or resellers.
(8) Mr Fry also accepted that there was an exchange of confidential information between individuals within the CI Network.
(9) As to the CI Network, I accept that it was established for the reasons and in the way described by Mr Arieni. I accept that the essential idea and business plan for the CI Network was set out in the Investment Summary as described in these reasons and that elements of that document provided the content for the “Overview Document” which Mr Arieni sent to those persons he sought to have join the cohort of members under the description “CI Network”.
(10) I accept that the arrangements between Exlites and those members who joined the CI Network involved financial benefits to the members as described in the Investment Summary. Those benefits included preferential prices and/or rebates paid to members so as to give members a price advantage of greater than 15% and probably around 20%. I also accept that Mr Arieni sought to put in place direct arrangements between members of the cohort and particular suppliers of panels. I also accept that members obtained the benefit of having enquiries referred to them in their particular areas. Sometimes the arrangements were exclusive. Sometimes they were not. Nevertheless, the members of the cohort obtained a community of interest in the financial advantages available to the cohort.
(11) I accept that the information contained in the email of 21 April 2010 was concerned with some matters of fact going directly to the development of the GENII product. The email expressly sought the advice of members of the cohort on the question of the document attached to the email; on the question of whether the idea of a mix of static LED colours (blue, red, green, yellow/orange), was a good idea; and whether the milliamp draw from the PCB ought to be reduced by 20% to 25% in each model as the products were far more bright than Exlites had ever experienced before having regard to the new versions with reflector enhancements still to come. I accept that that information was inherently confidential as it went to features of the product still under development and the information was put to the cohort in order to obtain the opinions of members of the cohort.
(12) I accept that the information contained in the email of 3 May 2010 was inherently confidential for the same reason. The information in the email provided the members of the cohort with new system design facts prior to the new product information brochure that would be completed shortly. The email referred to “all certifications” having been completed. The email tells the members of the cohort that Exlites is to receive the new PCBs “this week” and that “lux trials” would be undertaken and then final decisions would be made on the PCBs (LEDs) that would be available. The email takes up the earlier topic of the power draw reductions and other variants “coming to trial” which would enable Exlites to see how low it could take the new 3 LED version and still keep it better than the previous 6 LED version. It would enable Exlites to determine what could be done with the new 6 LED version. The email refers to the percentage increases in battery capacity and solar panel input being much higher than any previous version on offer. The attachment described as the pre-release data sheet for the new 2010 solar bollard as just that, a “pre release data sheet”. It was a data sheet for the benefit of the members in order to inform them about the design features of the new product.
(13) Having regard to the establishment of the cohort of members forming the CI Network, the elements of the financial advantages available to those members, the underlying business purpose of providing those members with products produced by Exlites and, in particular, new products emanating from the creative design work of Exlites, I am satisfied that the material provided to the members of the cohort by the emails of 21 April 2010 and 3 May 2010 was provided to them solely in their capacity as members of the CI Network and solely for the purposes of that network. I am satisfied that the information was confidential and that in disclosing the visual features of the Registered Design for the GENII bollard to the members of the CI Network, Exlites was not making a publication of the design. It was providing information about the design and an illustration of the design to arm members of the cohort with information about what was to come once the product was in final form and once Exlites had obtained the benefit of the opinions of the people most directly concerned with the features of that product including its technical and visual features.
(14) Having regard to all of these factors, I am satisfied that due to the particular financial arrangements between the members of the CIN cohort and Exlites and the state of development of the GENII product that the members of the cohort fell under an obligation of confidence to maintain the confidentiality of those matters until the product was in its final form and in a position to be promoted to the public at large as a saleable product.
(15) I am satisfied that this was particularly so at the relevant moment in time for the purposes of these proceedings which is 21 April 2010 and 3 May 2010.
(16) As to the footer, I am satisfied that it operated as a cognitive cue of some importance to members of the cohort but by itself it was not determinative of the character of the information communicated by the emails.
(17) As to the confidentiality arrangements between Exlites and persons who might be brought into the cohort as members of the Certified Installer Network and as between Exlites and persons dealing with Exlites who would be given access to information concerning the design and development of, relevantly here, the GENII product, I am satisfied that both Mr Arieni and Mr Fry were conscious of the importance of preserving the confidentiality of information surrounding the GENII product. As to the Confidentiality Agreements, I am satisfied that Mr Kedwell and Mr Swift executed a Confidentiality Agreement with Exlites on behalf of their company Planelec (their signature being witnessed by Mr Fry), before Mr Arieni showed them through the Exlites premises. I am also satisfied that Mr West, on behalf of SSL, executed a similar document with Exlites. I accept the explanation of both Mr Kedwell and Mr West as to the circumstances that have made it not possible for them to produce a copy of the document. The production and execution of these documents again suggests that both Mr Arieni and Mr Fry were conscious of the importance of preserving the confidentiality surrounding the development of products by Exlites and in particular the GENII product. It is true that Mr Kedwell regarded some aspects of information in particular emails as not confidential and he regarded some information as confidential which Mr Arieni did not regard as confidential (see, for example, aspects of the email of 17 February 2010). Mr Kedwell did not regard information in the 2010 product catalogue attached to the email of 10 February 2010 as confidential if the published excerpt was provided on the footing that it could actually be supplied to customers. He regarded the brochure at Court Book p 615 as containing marketing material for distribution. Mr West explained his understanding of the CI Network. He too was taken to aspects of the email of 17 February 2010 as an example of an email containing information that might or might not be thought to be confidential. Mr West did not regard the document attached to the email of 3 May 2010 as confidential. Notwithstanding those individual views about particular aspects of the email of 17 February 2010 and the document attached to the email of 3 May 2010, the character and foundation of the CI Network; the financial arrangements between Exlites and members of that cohort; the expenditure on developing the GENII product; the long and difficult process surrounding getting the product to final commercial supply standard; and the very particular content of the emails of 21 April 2010 and 3 May 2010 all need to be taken into account together to determine whether the members, as a cohort in their dealings with Exlites, fell under an obligation of confidence. I am satisfied that members of the cohort did so fall under that obligation.
(18) I am satisfied that these conclusions and findings as applied to the matrix of fact extensively analysed in these reasons is entirely consistent with the principles reflected in Saltman Engineering Co Ltd v Campbell Engineering Co Ltd and Others (1948) 65 RPC 203, Lord Greene (the Master of the Rolls) at 215; Coco v AN Clark (Engineers) Ltd  86 RPC 41, Megarry J at 47-50; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd  VR 37, Gowans J at 40; Australian Medic-Care Co Ltd (a company incorporated in Hong Kong) v Hamilton Pharmaceutical Pty Ltd (2009) 261 ALR 501, Finn J at -, but particularly -; and RLA Polymers Pty Ltd v Nexus Adhesives Pty Ltd and Others (2011) 280 ALR 125, Ryan J at .
285 Accordingly, the appeal is allowed. The decision of the delegate of the Registrar the subject of the appeal is set aside. The appellant seeks an order that the respondent pay the appellant’s costs of the appeal to this Court and the costs of the proceeding before the Registrar’s delegate. The parties will be directed to put on submissions within 14 days on the question of costs identifying the statutory power in the Court to make an order that the respondent pay the costs of the proceeding before the Registrar’s delegate. Subject to submissions on the question of costs generally, the Court is minded to make an order that the respondent pay the appellant’s costs of the appeal to this Court and an order, if within power, that the respondent pay the costs of the proceeding before the Registrar’s delegate.