Cordover and Australian Electoral Commission (Freedom of information)
[2015] AATA 956
•11 December 2015
Cordover and Australian Electoral Commission (Freedom of information) [2015] AATA 956 (11 December 2015)
Division
GENERAL DIVISION
File Number(s)
2014/3361
Re
Michael Cordover
APPLICANT
And
Australian Electoral Commission
RESPONDENT
DECISION
Tribunal Deputy President Melick & Member Taglieri
Date 11 December 2015
Place Hobart The decision under review is affirmed.
...................................................................
Deputy President G Melick AO RFD SC
CATCHWORDS
Freedom of information – Whether documents a trade secret – Definition of “trade secret” considered – Whether documents contained information having commercial value that could reasonably be expected to be diminished if information disclosed – Whether disclosure of business information could reasonably be expected to affect party adversely
LEGISLATION
Freedom of Information Act 1982
Commonwealth Electoral Act 1918
CASES
Searle Australia v PIAC (1992) 108 ALR 163
Oregon (Australia) Pty Ltd & Department of Community Services and Health-Public Interest Advocacy Centre (1987) 13 ALD 588
AG V Cockcroft (1986) 64 ALR 97
Arnold v Queensland and Australian National Parks and Wildlife Services (1987)
SECONDARY MATERIALS
Words and Phrases – “Trade Secret”
REASONS FOR DECISION
Deputy President Melick & Member Taglieri
On 4 October 2013, the Applicant made a request to the Respondent for access to documents under the Freedom of Information Act 1982 (“FOI Act”).
The request referred to the “source code” for vote counting software known as Easycount (“Easycount”). It also referred to “bespoke data formats” used for Easycount.
By a decision made on 4 November 2013, the Respondent refused to disclose Easycount, which decision was confirmed following internal review on 9 December 2013 and then by the Office of the Australian Information Commissioner (“OAIC”) on 25 June 2014.
The Applicant applied to this Tribunal for review.
At the commencement of the hearing of the application on 27 July 2015, there was some debate between the Tribunal and the parties about the form of the request made under the FOI Act and whether it identified or could be construed as a request for more than one document or part(s) of a document.
It became apparent by the time of the parties closing submissions, that the parties were agreed that the Tribunal ought to treat the request as one relating to a single document, being the entire source code for Easycount.
The issues in contention were also agreed by the parties to be whether the source code was a document exempt from disclosure because it involved disclosure of either:
(a)trade secrets; or
(b)any other information having a commercial value that would be, or could reasonably be expected to be, destroyed or diminished if the information were disclosed.[1]
[1] Pursuant to section 47(1) of the Freedom of Information Act 1982
THE PARTIES’ CONTENTIONS
The Applicant adopted the statements of legal principle contained in the OAIC Guidelines concerning what amounts to a “Trade Secret”. He recited the relevant part of the Guidelines in his written contentions in closing dated 28 July 2015.
He argued that the requirement that if disclosed to a competitor, the information would be liable to cause real or significant harm to the owner of the trade secret was not satisfied in regard to the disclosure of Easycount.
It followed he argued that Easycount was not to be regarded a trade secret and therefore not exempt by virtue of section 47(1)(a) of the FOI Act.
The Applicant also contended that there was no reasonable expectation that the commercial value of Easycount could be destroyed or diminished if it was disclosed, so exemption afforded by section 47(1)(b) of the FOI Act did not apply.
In arguing these propositions the Applicant relied heavily on the evidence of Dr Andrew Tridgell, a software engineer. Dr Tridgell’s affidavit of 15 January 2015[2] and his Curriculum Vitae[3] were received into evidence by the Tribunal. Dr Tridgell was also cross-examined.
[2] Exhibit 6
[3] Exhibit 7
During cross-examination considerable emphasis was on questioning Dr Tridgell about his involvement and professional beliefs in free and/or open source software. It led to the tender of documents relating to free and/or open source software, containing information with which Dr Tridgell substantially agreed[4]. However, his qualifications and specialised knowledge in software engineering, was not disputed by the Respondent.
[4] Exhibits 8, 9, 10 and 11
The substance of Dr Tridgell’s evidence was that:
(i)He had some experience in the development of electoral software, particularly with the ACT Electoral Commission and that ended in about 2000-2001.
(ii)It was his belief that a prospective competitor to the Respondent would not want to see the source code for Easycount unless accessed pursuant to a copyright license that allowed direct re-use of the source code.[5]
(iii)In his experience, software developers would not want to see the source code, unless they knew they could use it in an unencumbered manner. That is without risk of copyright violation and potential damage to reputation.
(iv)That copying of software occurs in the software industry, but in his view it is a bad idea and not prevalent in reputable companies.
(v)Use of a competitor’s source code carried a risk of contamination and for that reason there was a reluctance in the software industry to re-use already developed software. He supported the philosophy of software being free or open source.
(vi)That there were benefits from access to a source code for electoral software. Such benefits being, able to see the structure of it, understand how it works (particularly in the context of seeking to achieve improvements), and gain insights from a “user manual” perspective.
(vii)That in developing an open source software or proprietary software, accessing another software programme for the benefits described in paragraph (vi), necessarily involved a risk/reward balance. A balance in which a respectable software engineer would conclude that the risk outweighed the reward, so would not access, look and use the software.
[5] E 6, paragraph 6
The effect of the evidence of Dr Tridgell was plainly that there were attendant benefits to accessing software whether in an open source or proprietary context, but that he and respectable software engineers would not take the risks involved in accessing other software because of the small benefits and large risks.
The Applicant called Mr Luke Woollard, who had participated in scrutineering duties during the Western Australian Senate elections in April 2014.
Mr Woollard’s affidavit sworn 2 July 2015 was received in evidence and he gave oral evidence. His evidence was that he was able to observe how data entries were made using the Easycount software, tallied entries and correction of data. Further, that he was allowed to take photos of some screens on a computer of parts of the Easycount software at work. Despite this, he was not permitted to see some parts of the process involving use of Easycount.
Under cross-examination, Mr Woollard agreed that his ability to make the observations referred to in paragraph 17 was as a result of controls and checks, which required him to give undertakings to comply with the rules in the Commonwealth Electoral Act 1918 relating to scrutineers.
Mr Woollard also said that he had expressed concern that he “couldn’t be certain that the code behind the screens was in fact correctly performing the counting functions.”
The Respondent contended that the source code was exempt from disclosure under the FOI Act because of section 47. It argued that the source code was a trade secret or alternatively, had commercial value which could reasonably be expected to be destroyed or diminished if disclosed.
Two affidavits were received into evidence in support of the Respondent’s contentions and both deponents, Mr Kerr and Mr Jones gave oral evidence.
Mr Kerr is an employee of the Australian Electoral Commission (“AEC”) and his position is Web Systems Team Leader in the Information Technology Branch.
Mr Jones is also an employee of the AEC and his position is Senior Returning Officer of the Industrial and Commercial Elections division of the AEC’s New South Wales state office.
The substance of their evidence was consistent and to the following effect:
(a)Each had considerable experience in software programs for elections and computer software programming generally.
(b)That the AEC had heavily invested financially in the design and development of the Easycount software.
(c)That the AEC issued licenses for the use of Easycount in compiled form but on restrictive contractual terms that protected the commercial value of the software.
(d)That disclosure of the Easycount source code to others would provide significant benefits to those to whom it is disclosed, either because:
(i) It would aid the development of software to compete with Easycount in a market for electoral counting software, in which Easycount held a substantial market share; or
(ii) It would provide a potential for existing electoral software providers to improve their products.
(e)That there was real risk that software codes would be copied by others and that risk existed, even with copyright law.
(f)That even if direct copying of the source code did not occur, there was real potential for others to use the structure and design of the code to adopt similar patterns and practices to develop other software. This was described in the evidence generally as the benefit of using the code as a “road map”.
(g)That the Easycount source code provided a unique functionality which permitted it to be used across various types of vote counting activities. The ability to see the source code would permit the replication of the unique function and diminution in the value of that functionality to the AEC.
(h)They disagreed that the source code was a mundane code that nobody would be interested in.
(i)They rejected the proposition that others would not take the risks of damage to reputation or prosecution for copyright breaches.
WHAT INVOLVES DISCLOSURE OF TRADE SECRETS?
The decision in Searle Australia v PIAC (1992)[6], is one of the leading cases dealing with what is a “trade secret”.
[6] (1992) 108 ALR 163
Ultimately, whether or not information constitutes a trade secret is a question of fact to be determined in the circumstances of each case.[7]
[7] Searle Australia v PIAC (1992) 108 ALR 163 at 172
On the facts of this case, there is no doubt that the information claimed to constitute the “trade secret” is technical in nature, although it need not be to constitute a trade secret.[8]
[8] Searle Australia v PIAC (1992) 108 ALR 163 at 172
The requirement for secrecy does not require absolute or complete secrecy. If steps are taken to preserve the confidentiality of the information as a condition of communicating it to others, the information may still be classified as a trade secret.
The requirement for secrecy does not require absolute or complete secrecy. If steps are taken to preserve the confidentiality of the information as a condition of communicating it to others, the information may still be classified as a trade secret.[9]
[9] RE Oregon (Australia) Pty Ltd and Department of Community Services and Health-Public Interest Advocacy Centre (1987) 13 ALD 588 and Searle Australia at page 173
The Applicant argued that because the compiled source code was disclosed to licensees pursuant to agreements, the requirement of secrecy was lost. The argument was that a licensee was given the tools or capacity to decompile the source code. That having occurred, although prevented by agreement from disseminating further, the information had been shared and so it lost the requisite secrecy.
The Tribunal is satisfied that the Respondent always takes precautions to limit dissemination of the source code and it also ensures that controls enforceable by contract law are taken to protect the information in it. Further, there is no evidence that the source code has been decompiled and “seen” by a licensee. In addition, when Easycount was observed for scrutineering purposes, as Mr Woollard identified he could not see all of the workings being the software or the source code.
It is plain that the information must have commercial value and be used in or usable in trade. There was ample evidence from both Mr Lee and Mr Jones to the effect of the generation of income from being contracted to conduct elections using Easycount and also from licensing of it to other entities.
For the above reasons, the Tribunal is satisfied that the Easycount source code is a trade secret and is exempt from disclosure because of section 47(1)(a) of the FOI Act.
INFORMATION HAVING COMMERCIAL VALUE THAT WOULD BE/COULD REASONABLY BE EXPECTED TO BE DESTROYED OR DIMINISHED IF DISCLOSED
The Tribunal will consider whether Easycount is exempt from disclosure because of section 47(1)(b), although it is strictly unnecessary given the conclusion at paragraph 33.
The Applicant did not seriously contend that Easycount did not have commercial value. Instead, he argued that the commercial value of it would not be or could not reasonably be expected to be destroyed or diminished if disclosed.
The Tribunal is satisfied that Easycount meets the requirement of having commercial value because it accepts the evidence of Mr Lee and Mr Jones. In any event, the evidence of Dr Tridgell also recognised the commercial value of it, particularly as a “road map”.
The most contentious issue in this case was whether the disclosure of Easycount would or could be reasonably expected to cause real or significant harm to the owner of it.
Relying very significantly on the evidence of Dr Tridgell[10], the Applicant contended that the Tribunal should not be persuaded that the requirements for exemption applied.
[10] referred to at paragraphs 13 to 15
While the Tribunal was impressed with Dr Tridgell’s qualifications, expertise and candour, the effect of his evidence was to the effect that their source code had some commercial value and could benefit other electoral software developers. In his view he considered it to be unwise for a competitor to access and use another’s software, but he acknowledged that this occurred, even when there was potential to be caught and subjected to litigation for copyright breach.
Dr Tridgell’s evidence amounts to a statement that Easycount has commercial value, but reputable persons in the software industry are not likely to copy or use the information in it.
Despite this, Dr Tridgell properly conceded that not all persons in the industry were reputable and that copying and use occurred, even when copyright law supposedly presented as a deterrent.
This concession, together with the evidence of Mr Lee and Mr Jones, summarised at paragraph 24, persuades the Tribunal that as a question of fact, there is a reasonable expectation that the value of Easycount could be at very least diminished, if it were disclosed.
(a)In arriving at this conclusion, the Tribunal is mindful of the now settled principles that[11]:
(i) “could reasonably be expected to” is to be given its ordinary English meaning.
(ii) What “could reasonably be expected” is something which is not irrational, absurd or ridiculous.
(iii) It is wrong to look at whether the effect was of substance rather than incidental or trivial.
(iv) It is improper to approach the task of assessing whether something could reasonably be expected on the basis of probabilities or likelihood.
(v) The task requires consideration of whether something can reasonably be expected to happen by reference to ordinary English.
[11] Derived from AG V Cockcroft (1986) 64 ALR97 and Searle
The evidence does not permit a finding that the Tribunal is satisfied that disclosure of Easycount would destroy or diminish the commercial value of Easycount. However, that does not dispose of the issue concerning section 47(1)(b) of the FOI Act.
The gravamen of the Applicant’s case is summarised well at paragraphs 24 to 27 of his Counsel’s written supplementary submissions in closing dated 18 August 2015
The case amounts to contention that because of certain facts said to be established by the evidence of Dr Tridgell and Mr Kerr[12], use of Easycount by a competitor in activity detrimental to the Respondent cannot be reasonably expected.
[12] as set out in paragraph 27 of the submission
The Tribunal has concluded that Easycount has commercial value to other electoral software developers. The Applicant’s arguments assume that it does not, or has little value to reputable persons in the industry and the assumption is based on Dr Tridgell’s highly professional approach.
The difficulty with the assumption is that Dr Tridgell frankly acknowledged that not all competitors had the same professional ethics. That being so, there is clearly a possibility of competitors using the information to their benefit and the Respondent’s detriment if disclosed.
The possibility alone is not sufficient to amount to a reasonable expectation within the context of section 47(1)(b).[13]
[13] AG V Cockcroft (1986) 64 ALR 97 at page 106
However whether the destruction or diminution in commercial value can be reasonably expected does not involve satisfaction that it is a high, likely or even chance.[14] Despite this, the possibility of the same needs to be sufficiently tangible.[15]
[14] Also AG v Cockcroft at page 106
[15] Re Oregon at paragraph 28, approving of observations of Burchett J in Arnold v Queensland and Australian National Parks and Wildlife Services (1987) 13 ALD 195
Ultimately it is a question of degree. It can be something less than probability, but more than just an intangible possibility, or chance existing on an irrationally, absurd or ridiculously held basis.[16]
[16] Re Oregon at paragraph 29
The Tribunal is satisfied that the evidence establishes a potential for the diminution in commercial value of Easycount to the Respondent as owner of it, if disclosure of it were required. The possibility of it arising is not irrational or absurd and it is tangible because Dr Tridgell accepted that there were benefits to seeing the software and although he and other reputable software competitors, may not use it, some others might well do
Further, he agreed that even if it was not copied and used by him and others like him, he would benefit from seeing it for its “road map”. The necessary inference from this is that although not directly copied, it would allow application of some tangible benefit to work he or others in the industry did. This necessarily in our view diminishes the value of the software because it reduces a competitive edge that the Respondent currently has.
The decision under review is affirmed.
I certify that the preceding 53 (fifty-three) paragraphs are a true copy of
the reasons for the decision herein of
A G Melick AO SC (Deputy President) and Ms S Taglieri, Member[Sgd]
Dated:
Dates of hearing 27 & 28 July 2015 Solicitor for the Applicant Mr Chris Groves, Dobson Mitchell & Allport Counsel for the Respondent Mr Stephen Rebikoff, as instructed by the Australian Government Solicitor
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