Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd

FEDERAL COURT OF AUSTRALIA

Futuretronics.com.au Pty Limited v Graphix Labels Pty Ltd [2007] FCA 1621

CONTRACTS – IDENTIFICATION OF TERMS – IMPLIED TERMS – where applicant company marketed for sale “skins” – where applicant arranged for first respondent company to manufacture skins – where no agreement as to price – where no agreement as to minimum term or quantity – where first respondent subsequently manufactured and marketed skins for itself in competition with applicant – whether informal contract between applicant and first respondent – whether implied term of any contract that first respondent would not manufacture skins except to supply applicant – where alleged implied term unlimited as to time and circumstances of operation

Held: No binding contract except upon the placing of an actual order by the applicant and acceptance of the order by the first respondent – not necessary for the reasonable or effective operation of contract to imply term

INTELLECTUAL PROPERTY – COPYRIGHT – where skins product bore artwork – where copyright in artwork owned by applicant – where first respondent licensed to reproduce artwork pursuant to arrangement to manufacture skins for applicant – where first respondent reproduced artwork in brochure for its own use – where first respondent gave spares of skins product bearing artwork to third party – whether reproduction of artwork a breach of Copyright Act 1968 (Cth) – whether giving of spare product a breach of Copyright Act 1968 (Cth) – whether breach of implied term of license that first respondent not to use artwork or spare product except for the purposes authorised by applicant

Held:  Reproduction of artwork in brochure breach of Copyright Act 1968 (Cth) – giving spare product to third party did not breach Copyright Act 1968 (Cth) – giving spare product to third party breach of implied term of license

EMPLOYMENT LAW – DUTIES OF EMPLOYEE – where second respondent employee of first respondent – where second respondent former employee of applicant – where confidentiality agreement between second respondent and applicant – where second respondent arranged future employment with first respondent while employed by applicant – where second respondent, while still employed by applicant, emailed first respondent regarding future plans for forthcoming employment – where second respondent, after cessation of employment with applicant, pursued business opportunity to sell skins product to customer of applicant – where second respondent, after cessation of employment with first respondent, disclosed to third party name of applicant’s supplier – whether second respondent breached contract of employment with applicant – whether second respondent breached confidentiality agreement with applicant – whether second respondent breached fiduciary duties owed to applicant – whether second respondent breached employee’s duties under s 182 or s 183 Corporations Act 2001 (Cth)

Held:  Email communications from second respondent to first respondent while still employed by applicant did not reveal confidential information nor contain any business opportunity diverted from applicant – no evidence that applicant company time misused by second respondent – email communications did not constitute breach of contract – email communications…