Futuretronics.com.au Pty Limited v Graphix Labels Pty Ltd [2007] FCA 1621

FEDERAL COURT OF AUSTRALIA

Futuretronics.com.au Pty Limited v Graphix Labels Pty Ltd [2007] FCA 1621 CONTRACTS – IDENTIFICATION OF TERMS – IMPLIED TERMS – where applicant company marketed for sale "skins" – where applicant arranged for first respondent company to manufacture skins – where no agreement as to price – where no agreement as to minimum term or quantity – where first respondent subsequently manufactured and marketed skins for itself in competition with applicant – whether informal contract between applicant and first respondent – whether implied term of any contract that first respondent would not manufacture skins except to supply applicant – where alleged implied term unlimited as to time and circumstances of operation Held: No binding contract except upon the placing of an actual order by the applicant and acceptance of the order by the first respondent – not necessary for the reasonable or effective operation of contract to imply term INTELLECTUAL PROPERTY – COPYRIGHT – where skins product bore artwork – where copyright in artwork owned by applicant – where first respondent licensed to reproduce artwork pursuant to arrangement to manufacture skins for applicant – where first respondent reproduced artwork in brochure for its own use – where first respondent gave spares of skins product bearing artwork to third party – whether reproduction of artwork a breach of Copyright Act 1968 (Cth) – whether giving of spare product a breach of Copyright Act 1968 (Cth) – whether breach of implied term of license that first respondent not to use artwork or spare product except for the purposes authorised by applicant Held: Reproduction of artwork in brochure breach of Copyright Act 1968 (Cth) – giving spare product to third party did not breach Copyright Act 1968 (Cth) – giving spare product to third party breach of implied term of license EMPLOYMENT LAW – DUTIES OF EMPLOYEE – where second respondent employee of first respondent – where second respondent former employee of applicant – where confidentiality agreement between second respondent and applicant – where second respondent arranged future employment with first respondent while employed by applicant – where second respondent, while still employed by applicant, emailed first respondent regarding future plans for forthcoming employment – where second respondent, after cessation of employment with applicant, pursued business opportunity to sell skins product to customer of applicant – where second respondent, after cessation of employment with first respondent, disclosed to third party name of applicant's supplier – whether second respondent breached contract of employment with applicant – whether second respondent breached confidentiality agreement with applicant – whether second respondent breached fiduciary duties owed to applicant – whether second respondent breached employee's duties under s 182 or s 183 Corporations Act 2001 (Cth) Held: Email communications from second respondent to first respondent while still employed by applicant did not reveal confidential information nor contain any business opportunity diverted from applicant – no evidence that applicant company time misused by second respondent – email communications did not constitute breach of contract – email communications did not constitute breach of confidentiality agreement – email communications did not constitute breach of fiduciary duties – email communications did not constitute breach of Corporations Act 2001 (Cth) – business opportunity pursued was not business opportunity open to applicant while second respondent employed by applicant – second respondent did not use confidential information in pursuit of business opportunity – second respondent did not deliberately memorise the name of the customer – second respondent entitled to use know-how obtained in course of former employment – name of customer within know-how since not deliberately copied or memorised – second respondent's pursuit of business opportunity did not breach confidentiality agreement – pursuit of business opportunity did not breach fiduciary duties – pursuit of business opportunity did not breach Corporations Act 2001 (Cth) – name of applicant's supplier not confidential at common law or in equity – disclosure of name of supplier did not breach fiduciary duties – disclosure of name of supplier did not breach Corporations Act 2001 (Cth) – applicant failed to prove that name of supplier was not generally known outside the company or generally known – name of supplier not confidential within the confidentiality agreement – disclosure of name of supplier did not breach confidentiality agreement PRACTICE AND PROCEDURE – PLEADINGS – PRIVILEGE AGAINST SELF-EXPOSURE TO PENALTY – application to amend application and statement of claim on first day of trial – where pre-trial discovery and production made – where amendments introduce new causes of action against respondents – where new causes of action include breach of civil penalty provision of Corporations Act 2001 (Cth) – where new causes of action pleaded on basis of documents discovered and produced pre-trial – where amendments opposed – where respondents allege that production of documents would have been resisted on grounds of privilege against self-exposure to penalty had breaches of Corporations Act 2001 (Cth) been pleaded initially – whether amendments should be allowed Held: Privilege against self-exposure to penalty arises because answers or documents tending to expose a person to a penalty are sought, not because proceedings exposing a person to a penalty are commenced – respondents had opportunity to claim privilege – privilege waived – amendments allowed