Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70

HIGH COURT OF AUSTRALIA

GLEESON CJ,

GUMMOW, KIRBY, HAYNE AND CALLINAN JJ

MAGGBURY PTY LTD & ANOR APPELLANTS

AND

HAFELE AUSTRALIA PTY LTD & ANOR RESPONDENTS

Maggbury Pty Ltd v Hafele Australia Pty Ltd

[2001] HCA 70

13 December 2001

B36/2001

ORDER

Appeal dismissed with costs.

On appeal from the Supreme Court of Queensland

Representation:

S J Lee for the appellants (instructed by O'Shea Corser & Wadley)

J S Douglas QC with G C McGowan for the respondents (instructed by Aitken Walker & Strachan)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Maggbury Pty Ltd v Hafele Australia Pty Ltd

Contract – Confidential information – Contractual restraint upon use of "Information" – Restraint expressed to be perpetual – Information disclosed in patent application – Proper construction of contract – Whether restraint to apply once information disclosed to public – Whether contract in restraint of trade.

Restraint of trade – Contractual restraint upon use of information concerning invention – Whether confidentiality agreement constitutes an unenforceable contractual restriction on trade – Whether the restraint imposed is more than that required to protect the interests of the parties.

Injunction – Confidentiality agreement between inventor and potential marketer – Substantial copying of invention found contrary to agreement – Whether injunction granted unacceptably wide – Whether injunction would involve excessive supervision by court – Permissible scope and duration of injunctive relief.

Words and phrases – "quality of confidence".

1. GLEESON CJ, GUMMOW AND HAYNE JJ. Mr G W Allen is a director of the first appellant, Maggbury Pty Ltd ("Maggbury"). It appears from his oral evidence that he also is a shareholder in both Maggbury and the second appellant, Gisma Pty Ltd ("Gisma"). Mr Allen's wife, Mrs Ines Allen, is the sole director of Gisma. The second respondent, Hafele GmbH & Co ("Hafele"), is a commercial partnership registered under German law. Hafele is the sole shareholder of Hafele Holding GmbH, which in turn is the majority shareholder of the first respondent, Hafele Australia Pty Ltd ("Hafele Australia"). 2. Mr Allen has worked as a cabinet maker since 1968; he has owned and operated several businesses which at one stage employed about 130 people. In about 1984, whilst he was working on a job that required the fixing of ironing boards into laundries, Mr Allen became interested in the space-saving possibilities of wall and drawer-mounted ironing boards which could open out in a fashion which differed from that of the boards with which he was then working. All of these emerged at right angles from their housing. By 1988, Mr Allen had built a prototype for a parallel-opening foldaway ironing board. Folding ironing boards were not new when this first prototype was assembled. Since the early 1980s, Hafele had made a drawer-mounted ironing board which, for convenient storage, folded in half. 3. By 1994, Mr Allen had retained professional designers, Prototype Design Pty Ltd ("Prototype"), to assist with modifications and to advise on commercial exploitation of the product by Maggbury. These designers produced drawings from which three prototypes were built, a wall assembly, a "vertical assembly" capable of mounting on a kitchen unit or cupboard bench support, and an assembly to be mounted in a mobile cabinet or in a drawer. 4. Maggbury took an assignment of any intellectual property rights that Prototype might have acquired in respect of the drawings and prototypes. Mr Allen also procured the taking of steps to obtain Australian and international patent protection for his companies. 5. On 14 July 1995, Maggbury's patent attorneys filed an application pursuant to s 29 of the Patents Act 1990 (Cth) ("the Patents Act") for a patent for an invention stated to relate to a foldaway ironing board assembly and, in particular, a foldaway ironing board assembly mounted to a support structure such as a wall, kitchen unit, cupboard bench support, mobile cabinet or drawer. The application was accompanied by a provisional specification. The effect of s 38 of the Patents Act was to require the filing of a complete specification on or before 14 July 1996. The application was given the number PN4147. 6. The applicant in respect of PN4147 was Maggbury but the inventor was identified as Mr Allen. By deed of assignment dated 29 April 1996, Maggbury assigned its right, title and interest in PN4147 to Gisma. In the meantime, on 4 August 1995, Maggbury's patent attorneys had filed an application with a provisional application given the number PN4592 in respect of an invention stated to relate to a pivotal support assembly particularly useful for, but not limited to, folding furniture, kitchen units, foldaway household items and the like. Again Maggbury was the applicant and Mr Allen was identified as the inventor. PN4592 also was assigned by the deed of 29 April 1996 by Maggbury to Gisma. 7. The respective priority dates for PN4147 and PN4592 were 14 July 1995 and 4 August 1995. Approximately 12 months after the making of the first Australian application, an international application was made by Gisma under the Patent Cooperation Treaty ("the PCT application"). The international application number was PCT/AU96/00443 and priority dates were claimed by reference to PN4147 and PN4592. The inventor was again shown as Mr Allen. The title given to the invention was "PIVOTAL SUPPORT AND FOLDAWAY WINGS". The PCT application describes the invention by reference to particular embodiments disclosed in 24 drawings and concludes with 13 claims. It appears that the invention claimed is for a combination, a mechanical device comprising the interaction of known mechanical integers to make a new thing[1]. 8. The abstract of the PCT application, omitting references to numbers in the supporting drawing, read: