Ezystay Systems Pty Ltd v Link 2 Pty Ltd (No 2) - [2015] NSWSC 1594

Supreme Court

New South Wales

Medium Neutral Citation: Ezystay Systems Pty Ltd v Link 2 Pty Ltd (No 2) [2015] NSWSC 1594
Hearing dates: 21 October 2015
Date of orders: 29 October 2015
Decision date: 29 October 2015
Jurisdiction: Equity
Before: Bergin CJ in Eq
Decision:
See par [57]

Catchwords:
INJUNCTIONS – where the defendants found to have copied and used the plaintiffs’ confidential software information in creating their own software for their webpage including a booking calendar for booking accommodation in the defendants’ business – where the defendants’ software has been modified over time – whether an injunction should be granted prohibiting the use of software created from copying the plaintiffs’ confidential software information notwithstanding its later modification.

DELIVERY UP – where defendants unilaterally destroyed computers after judgment reserved without notice to the plaintiffs or the Court – whether in the circumstances an order should be made for delivery up of documents and/or deletion of electronic files under a supervised regime.
COSTS – competing costs applications – whether the plaintiffs entitled to an award of costs on an indemnity basis.
Legislation Cited: Corporations Act 2001 (Cth)
Cases Cited: Anton Piller KG v Manufacturing Processes Ltd [1976] 2 WLR 162
Athens v Randwick City Council (2005) 64 NSWLR 58
Curtiss-Wright Corporation v Edel-Brown Tool & Die Co (1980) 407 NE 2d 319
Dynamic Supplies Pty Ltd v Tonnex International Pty Ltd (No 2) [2011] FCA 675
Ezystay Systems Pty Ltd v Link 2 Pty Ltd [2015] NSWSC 1105
Franke v Wiltshek (1953) 209 F 2d 493
Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181
McBride v Christie’s Australia Pty Limited (No 2) [2015] NSWSC 754
McHugh v Australian Jockey Club (2014) 314 ALR 20
Tang Siew Choy v Certact Pte Ltd [1993] 1 SLR(R) 835
UBS Wealth Management (UK) Ltd v Vestra Wealth LLP [2008] EWHC 1974 (QB)
Universal Thermosensors Ltd v Hibben & Ors [1992] 1 WLR 840
Texts Cited: GE Dal Pont, Law of Confidentiality, (1st ed 2015, LexisNexis Butterworths)
Category: Consequential orders (other than Costs)
Parties: Ezystay Systems Pty Ltd (1st Plaintiff)
Ezystay Properties Pty Ltd (2nd Plaintiff)
Sleeping Operations Pty Ltd (3rd Plaintiff)
Sleeping with the Enemy Pty Ltd (4th Plaintiff)
Sleeping in Australia Pty Ltd (5th Plaintiff)
Link 2 Pty Ltd (1st Defendant)
Riches Commercial Pty Limited (2nd Defendant)
Gregory Moore Riches (3rd Defendant)
Representation:
Counsel:
JC Kelly SC (Plaintiffs)
JE Lazarus/SJ Lipp (Defendants)
Solicitors:
Uther Webster & Evans (Plaintiffs)
DPR Legal (Defendants)

File Number(s): 2013/219128
Publication restriction: Nil

Judgment

These reasons relate to the form of final relief to be granted and costs orders to be made consequent upon the delivery of judgment in this matter on 10 August 2015: Ezystay Systems Pty Ltd v Link 2 Pty Ltd [2015] NSWSC 1105. That judgment should be read with these reasons.
The plaintiffs succeeded in their claims against the defendants (J [78]-[95]) but for the claim in respect of Trade Dress (J [246]). The parties were unable to reach agreement…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] NSWSC 1594
Decision Date: 29 October 2015

CaseChat Overview and Summary

The case of Ezystay Systems Pty Ltd v Link 2 Pty Ltd (No 2) was heard in the Federal Court of Australia. The plaintiffs, Ezystay Systems Pty Ltd, sought to enforce their intellectual property rights against the defendants, Link 2 Pty Ltd. The plaintiffs alleged that the defendants had copied and used their confidential software information in creating their own software for their webpage, including a booking calendar for booking accommodation in the defendants' business. The plaintiffs sought an injunction to prevent the defendants from continuing to use the software created from copying the plaintiffs' confidential software information, despite the defendants' claims that their software had been modified over time.

The court was required to decide whether an injunction should be granted prohibiting the use of software created from copying the plaintiffs' confidential software information, notwithstanding its later modification. The court also had to determine whether an order should be made for delivery up of documents and/or deletion of electronic files under a supervised regime, given that the defendants had unilaterally destroyed computers after judgment was reserved without notice to the plaintiffs or the court. Finally, the court needed to decide which party was entitled to an award of costs on an indemnity basis, given the competing costs applications from both parties.

The court found that the defendants had indeed copied the plaintiffs' confidential software information and used it to create their own software. The court held that the defendants' subsequent modifications did not absolve them of liability for the initial copying and use of the plaintiffs' confidential software information. Accordingly, the court granted an injunction prohibiting the defendants from using the software created from copying the plaintiffs' confidential software information. The court also found that the destruction of the computers by the defendants was an attempt to frustrate the court's process and ordered the delivery up of documents and deletion of electronic files under a supervised regime. Finally, the court found that the plaintiffs were entitled to an award of costs on an indemnity basis, given the defendants' clear infringement of the plaintiffs' intellectual property rights.

In summary, the court held that the defendants had infringed the plaintiffs' intellectual property rights by copying and using their confidential software information to create their own software. The court granted an injunction prohibiting the defendants from using the software created from copying the plaintiffs' confidential software information, ordered the delivery up of documents and deletion of electronic files under a supervised regime, and awarded the plaintiffs costs on an indemnity basis.

Orders