Concrete Mining Structures Pty Ltd v Cellcrete Australia Pty Ltd [2015] FCA 888
A recent hearing dismissing an application for an interlocutory injunction to protect, among other things, certain confidential information, highlighputs the importance of adequately defining the material said to be confidential.
Background
Concrete Mining Structures Pty Ltd (CMS), sought an interlocutory injunction against Cellcrete Australia Pty Ltd (Cellcrete) and Mr Reiniger, a former director of CMS and the sole director of Cellcrete.
At issue was a pump called the CA10MK3 pump. The CA10MK3 pump was the subject of a patent application which was not yet open to public inspection.
CMS alleged that the specifications of the CA10MK3 pump and certain associated matters (said to be confidential) were developed by it with Mr Reiniger as a director and employee. CMS alleged that, in the circumstances, Mr Reiniger owed duties including fiduciary duties and duties of confidence.
The injunction sought to prevent the Respondents from:
using or disclosing the confidential information [as defined in the application], or reproducing the copyright works, or purchasing, ordering, obtaining, selling or offering for sale the CA10MK3 pump or “variants” of it.
Decision
The trial judge, Edelman J considered the two key questions to be determined where an interlocutory injunction is sought, namely, whether the Applicant had established a prima facie case and where the balance of convenience and justice lay in terms of the grant or refusal of such relief.
His Honour found that CMS had established that there was a prima facie case in favour of granting the injunction.
On the question of the balance of convenience however, Edelman J considered a number of arguments, in particular:
- The Respondents had argued that the Applicant was effectively seeking to enforce rights it did not yet have as a mere applicant for a patent (rather than as a patentee). However, his Honour found that the issues to be determined (breach of confidence and breach of fiduciary duty) were not coextensive with the principles concerning the grant or refusal of a patent.
- There was a real difficulty with the breadth and uncertainty of the terms of the interlocutory injunction. In particular, the difficulties with the term “variant” had previously been raised, in terms of its inherent vagueness. Accordingly, immediately before the hearing, the Applicant sought to define the terms of the injunction so far as it concerned pumps other than the CA10MK3 pump by reference to four specific elements of the CA10MK3 pump. However this was still problematic as the Respondents’ evidence indicated that there were many pre-existing pumps that had those elements.
- As to the confidential information, it was described in ways that were imprecise, for example, references to “other elements”. The injunction also sought to restrain the use of information that was not, in any event, confidential and which had not been “provided”. For example, CMS sought to restrain the use of a list of its manufacturers, although Mr Reiniger had never been provided with such a list and the manufacturers that Mr Reiniger had dealt with in connection with CA10MK3 pump were all people or organisations that he or Cellcrete had previously dealt with.
- A further and “very significant factor” in favour of the refusal of the injunction was that the injunction would restrain the conduct of Cellcrete’s business and there was evidence that they had been in business for many years before CMS was incorporated. The terms of the proposed injunction would “prohibit the conduct” of the part of Cellcrete’s business concerning the sale of pumps.
The Respondents offered certain undertakings without admissions in respect of the CA10MK3 pump, the hydraulic schematics and safety file (the latter two the subject of the copyright claims) and certain equipment.
Although the interlocutory application was dismissed, the judge ultimately made orders concerning these undertakings.