C21 Pty Ltd (Trustee) v Hou (No 6)

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

C21 Pty Ltd (Trustee) v Hou (No 6) [2025] FedCFamC2G 927

File number(s): SYG 2055 of 2021
Judgment of: JUDGE MANOUSARIDIS
Date of judgment: 13 June 2025
Catchwords:

INTELLECTUAL PROPERTY – final relief in relation to established causes of action based on copyright infringement, breach of confidence, and breach of s 183(1) of the Corporations Act 2001 (Cth) (Corporations Act) – whether principles relating to springboard injunctions apply to the granting of injunctions in relation to copyright infringement and the granting of injunctions pursuant to s 1324(1) of the Corporations Act – whether the applicant’s disclaiming a claim for copyright infringement based on the three dimensional reproduction of the copyright works is a bar to granting an injunction restraining the two dimensional reproduction of the copyright works and the granting of delivery up orders in relation to two dimensional infringing reproductions of the copyright works - whether in relation to the cause of action based on breach of confidence information held to be confidential is in the public domain such as to warrant at most the granting of a springboard injunction rather than a permanent injunction restraining the use of the information that was held to be confidential – declarations, permanent injunctions, and other orders made – the making of a delivery up order and orders in relation to costs postponed.

INTELLECTUAL PROPERTY – Practice and procedure – whether application for a stay of order for the payment of profit pending the hearing of an appeal should be granted – stay granted on terms that respondents pay part of the profits ordered.  
Legislation:

 Copyright Act 1968 (Cth) s 115(2)

Corporations Act 2001 (Cth) ss 79, 182(1), 183(1), 1317H(2), 1324(1)

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 140
Cases cited:

 C21 Pty Ltd (Trustee) v Hou (No 5) [2025] FedCFamC2G 479

IPC Global Pty Ltd v Pavetest Pty Ltd (No 3) [2017] FCA 82

Mastec Australia Pty Ltd v Trident Plastics (Aust) Pty Ltd (No 3) [2018] FCA 99

Purkess v Crittenden (1965) 114 CLR 164

Smith & Nephew Plc v Convatec Technologies Inc [2014] RPC 22

Streetworx Pty Ltd v Artcraft Urban Group Pty Ltd (No 2) [2015] FCA 140

Watts v Rake (1960) 108 CLR 158
Division: General
Number of paragraphs: 55
Date of hearing: 30 May 2025
Place: Sydney
Counsel for the Applicant: Mr C McMeniman
Solicitor for the Applicant: Gilbert + Tobin
Counsel for the Respondents: Mr L Merrick and Mr A Middleton
Solicitor for the Respondents: MGA Lawyers

ORDERS

SYG 2055 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

C21 PTY LTD ATF THE RAMADAN FAMILY TRUST

Applicant
AND:

KATE HOU

First Respondent

HIBI DESIGN PTY LTD

Second Respondent

ORDER MADE BY:

JUDGE MANOUSARIDIS

DATE OF ORDER:

13 JUNE 2025

THE COURT DECLARES THAT:

1.On any one or more of 20 August 2021, 22 August 2021, or 15 September 2021, the first respondent infringed the copyright…

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Details
Case
[2025] FedCFamC2G 927
Decision Date

CaseChat Overview and Summary

C21 Pty Ltd (Trustee) initiated legal proceedings against Hou, involving allegations of copyright infringement, breach of confidence, and contravention of s 183(1) of the Corporations Act 2001 (Cth). The dispute centred around the unauthorized reproduction of copyrighted works in both two and three-dimensional forms, as well as the misuse of confidential information. The case was heard in the Federal Court of Australia, which was tasked with determining the appropriate legal remedies and whether certain principles relating to injunctions and the public domain should be applied in this context.

The court faced several critical legal issues, including the applicability of springboard injunction principles to cases of copyright infringement and the enforcement of s 1324(1) of the Corporations Act. A central question was whether the applicant's decision to abandon a claim for copyright infringement concerning the three-dimensional reproduction of the copyrighted works would prevent the court from granting an injunction against the two-dimensional reproduction of these works. Additionally, the court had to decide whether information that was once deemed confidential but had since become part of the public domain warranted only a springboard injunction instead of a permanent injunction. Another issue was whether the respondents could rely on the springboard principle to avoid a permanent injunction if they could demonstrate that they would have independently developed the infringing content within a specific timeframe.

The court ruled in favour of C21 Pty Ltd (Trustee), granting various declarations, permanent injunctions, and other orders. It concluded that the springboard injunction principles did not bar the granting of injunctions related to copyright infringement and the enforcement of s 1324(1) of the Corporations Act. The court found that the disclaiming of a claim for copyright infringement based on the three-dimensional reproduction did not preclude the issuance of an injunction against the two-dimensional reproduction. Regarding the confidential information, the court held that even if some aspects had become public, a permanent injunction was justified to protect the remaining confidential content. The court also determined that the respondents' contentions regarding the public domain and the springboard principle required substantial evidence to establish with reasonable precision, which they had not provided.

The court further ordered delivery up of the infringing reproductions and postponed the orders related to costs. The stay of the order for the payment of profits was granted on terms that the respondents would pay part of the profits ordered pending the hearing of an appeal.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

In Purkess the plurality held that the judgments of the High Court in Watts were concerned with the evidentiary, not the legal, burden of proof; and the plurality identified what the defendant was required to do to discharge the evidentiary burden of proof:[13]It was, we think, with the character and quality of the evidence required to displace a plaintiff's prima facie case that Watts v. Rake . . . was essentially concerned. It was, in effect, pointed out that it is not enough for the defendant merely to suggest the existence of a progressive pre-existing condition in the plaintiff or a relationship between any such condition and the plaintiff's present incapacity. On the contrary it was stressed that both the pre-existing condition and its future probable effects or its actual relationship to that incapacity must be the subject of evidence (i.e. either substantive evidence in the defendant’s case or evidence extracted by cross-examination in the plaintiff's case) which, if accepted, would establish with some reasonable measure of precision, what the pre-existing condition was and what its future effects, both as to their nature and their future development and progress, were likely to be. That being done, it is for the plaintiff upon the whole of the evidence to satisfy the tribunal of fact of the extent of the injury caused by the defendant's negligence. In the present case the evidence accepted by the learned trial judge by no means established with any reasonable degree of precision the extent of the appellant’s pre-existing affliction or what its future effects, apart from the result of the defendant's negligence, were likely to be. [13] Purkess v Crittenden (1965) 114 CLR 164, at page 168. Thus, where an applicant has established that information is confidential, and a respondent has misused it, but the respondent wishes to contend the information is no longer confidential; and, moreover, the respondent wishes to contend that, but for his or her misuse of information, the respondent, within a particular period, would have been in a position to introduce into the market the product or service he created by use of the information when confidential, the respondent’s contentions “must be the subject of evidence” which, if accepted, would establish “with some reasonable measure of precision” the respondent’s contentions. The need for a respondent who wishes to rely on the springboard principles to adduce evidence is illustrated by the facts in IPC Global Pty Ltd v Pavetest Pty Ltd (No 3).[14] In that case, two former employees, in breach of their former employer’s copyright and confidential information in software known as Universal Testing Software (UTS), developed their own software known as the Pavetest Testlab Software (PTS version 1). Moshinsky J held that in creating PTS version 1 the respondents infringed the copyright the applicant owned in the UTS. After the proceeding commenced the respondents prepared a second version of the PTS (PTS version 2). Moshinsky J found that the respondents misused confidential information in creating the PTS version 2, but the applicant did not claim the respondents created the PTS version 2 by infringing any copyright. There was evidence, which his Honour accepted, that, although the relevant information was confidential, it was “not of such a kind that could not have been . . . developed” by the respondents. His Honour identified the evidence as follows:[15]In particular, Mr Feeley’s evidence, which I accept, is to the effect that he could have developed a communications protocol document ‘from scratch’, based on memory and experience, and without reference to UTS confidential information, in two to three weeks (see [124](g) above). Further, it is not suggested that Mr Li would not have been able to develop the TestLab software without reference to the UTS software; he would have required additional instruction and information about the problem domain from other sources, and the process would have taken longer, but it is not suggested that he could not have done this. Ultimately, there did not seem to be any real dispute between the parties about these general propositions. [14] IPC Global Pty Ltd v Pavetest Pty Ltd (No 3) [2017] FCA 82.[15] IPC Global Pty Ltd v Pavetest Pty Ltd (No 3) [2017] FCA 82, at [213].Scope of operation of springboard principles

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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