Bluescope Steel Limited (ACN 000 011 058) v Kelly [2007] FCA 517

FEDERAL COURT OF AUSTRALIA

Bluescope Steel Limited (ACN 000 011 058) v Kelly [2007] FCA 517

INTELLECTUAL PROPERTY - copyright infringement - breach of contract - breach of confidence - whether information is confidential or in the public domain or part of skill and knowledge acquired in the course of employment - injunctions allowed restraining further disclosure Corrs Pavey Whiting & Burn v Collector of Customs (1987) 14 FCR 434 cited Dart Industries Inc v Decor Corporation Pty Ltd (1993) 179 CLR 101 followed Faccenda Chicken Limited v Fowler [1985] FSR 105 cited Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298 cited Warman International Ltd v Dwyer (1995) 182 CLR 544 followed Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 cited BLUESCOPE STEEL LIMITED (ACN 000 011 058) (FORMERLY BHP STEEL (JLA) PTY LIMITED AND BHP STEEL LIMITED) & ANOR v BRIAN FRANCIS KELLY AND K.CON PTY LIMITED (ACN 092 106 940) NSD82 OF 2002

EMMETT J

12 APRIL 2007

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD82 OF 2002

BETWEEN: BLUESCOPE STEEL LIMITED (ACN 000 011 058) (FORMERLY BHP STEEL (JLA) PTY LIMITED AND BHP STEEL LIMITED)

First Applicant

CASTRIP LLC

Second Applicant

AND: BRIAN FRANCIS KELLY

First Respondent

K.CON PTY LIMITED (ACN 092 106 940)

Second Respondent

JUDGE: EMMETT J

DATE: 12 APRIL 2007

PLACE: SYDNEY

REASONS FOR JUDGMENT INTRODUCTION STEEL MANUFACTURE PROJECT M FORMATION OF CASTRIP INVOLVEMENT OF MR KELLY WITH BLUESCOPE AND IN PROJECT M THE CONSULTANCY AGREEMENT BETWEEN DANIELI AND K.CON DISCLOSURES PURSUANT TO THE CONSULTANCY AGREEMENT Written Disclosures June Questions and Answers July Questions and Answers September Questions and Answers October Questions and Answers August Drawings and Notes September Drawings and Notes Design Specifications Quality Manual Oral Disclosures Visit 13 December 2000 to 21 December 2000 Visit 22 January 2001 to 26 January 2001 Visit 19 February 2001 to 27 February 2001 Design Review Meetings in Australia May 2001 Meeting on 4 June 2001 to 8 June 2001 and subsequent discussions Other Disclosures THE CLAIMS BY BLUESCOPE AND IHI Copyright Infringement Breach of Contract Breach of Confidence DISCLOSURE OF CONFIDENTIAL INFORMATION Evidence as to Confidentiality Specific Items in Exhibit 4.1 Items 1 and 2 Item 3 Item 8 Item 9 Item 14 Item 19 Item 27 Item 48 Items 63 and 64 Item 68 Items 69 to 71 Items 89 to 91 Item 110 Item 130 Whether Information Disclosed was Confidential Conclusion as to Breach of Confidence RELIEF Injunctions Account of Profits CROSS CLAIM CONCLUSION INTRODUCTION 1 The first respondent, Brian Francis Kelly, has had over 40 years experience in the steel and associated industries, most of it with the first applicant, Bluescope Steel Limited (Bluescope). The second respondent, K.Con Pty Limited (K.Con), was formed by Mr Kelly following cessation of his employment by Bluescope. Mr Kelly is the only director of K.Con and is its secretary. 2 From 1988, Bluescope and Ishikawajima-Harima Heavy Industries Co Limited (IHI) commenced work on a research and development project under the name "Project M". Mr Kelly was heavily involved in Project M. Subsequently, Bluescope and IHI assigned to the second applicant, Castrip LLC (Castrip), certain information arising from Project M, which Bluescope and Castrip claim is confidential. 3 Bluescope and Castrip claim that Mr Kelly and K.Con have disclosed part of that confidential information to Danieli & Co (Danieli). Danieli is engaged in the design and manufacture of machinery used in steel making, including steel casting machinery. Bluescope and Castrip say that such disclosure occurred in breach of fiduciary and contractual obligations that they claim Mr Kelly owed to them. They also claim that Mr Kelly and K.Con have infringed copyright in certain works related to the confidential information. 4 When the proceeding was commenced, Bluescope was the only applicant. The respondents included parties other than Mr Kelly and K.Con. Subsequently, Danieli was also joined as a respondent and Castrip was joined as an applicant. However, when the proceeding came on for hearing, the claims against all respondents other than Mr Kelly and K.Con had been compromised and the only questions remaining for the Court are whether Bluescope and Castrip are entitled to succeed against Mr Kelly and K.Con and, if so, what relief should be granted by way of injunctions and account of profits. 5 There is no dispute that Mr Kelly and K.Con conveyed a great deal of information to Danieli. Mr Kelly and K.Con contend, however, that the information disclosed was not confidential information belonging to Bluescope and Castrip. They say that the information was either in the public domain or had become part of the skill and knowledge acquired by Mr Kelly in the course of his employment by Bluescope, which he was permitted to use for his own benefit following cessation of his employment with Bluescope.