Industrial Rollformers Pty Ltd v Ingersoll-Rand (Australia) Ltd

Industrial Rollformers Pty Ltd (the first appellant) and its associated company (the second appellant) appealed from a decision of Bergin J in the Supreme Court of New South Wales. The dispute concerned a non-exclusive supply agreement between the first appellant and Ingersoll-Rand (Australia) Ltd (the respondent), which involved the manufacturer using the respondent's patent rights and other information to produce certain products. The respondent sought relief, including for breach of confidence and restraint of trade clauses within the agreement.

The primary legal issues before the court were whether the specifications and tolerances for the products manufactured by the first appellant were confidential information belonging to the respondent, and if so, whether this confidential status was lost due to the product's capacity for reverse engineering. The court also had to determine the enforceability of clauses within the agreement that restrained the manufacturer from using confidential information for five years after termination, and from making similar products for the same period. Furthermore, the court considered whether these restraints could be read down under the *Restraints of Trade Act 1976* (NSW) and whether the associated company was bound by the agreement's terms.

Bergin J had found that, with the exception of the steel grade and type, the specifications and tolerances for the "Split Set" units were confidential information of the respondent. Her Honour held that the first appellant had breached clause 12 of the agreement by using this confidential information without consent to create drawings, manufacture the "Strata-Bolt," and prepare a tender. She also found the second appellant bound by the agreement and similarly liable for breaches. The restraint of trade clause, preventing the use of confidential information for five years post-termination, was deemed reasonable and enforceable.

The appellate court allowed the appeal in part, setting aside certain declarations and orders made by Bergin J. Specifically, it deleted a part of the declarations concerning the use of confidential information and removed references to the second appellant from orders relating to breaches of the agreement. The appellants were ordered to pay the respondent's costs of the appeal.