Sun-Wizard Holding Pty Ltd v Key Logic Pty Ltd

[2017] ADO 8

DESIGNS ACT 2003

DECISION OF A DELEGATE OF THE REGISTRAR OF DESIGNS WITH REASONS

ReRequest for examination by Sun-Wizard Holding Pty Ltd of design number 201012310 (registered design number 332890) in the name of Key Logic Pty Ltd

Delegate:                  Robert Wilson

Representation:       Owner: David Logan of Queens Counsel, instructed by Paul Davis of Fisher Adams Kelly Callinans Patent & Trade Mark Attorneys

Requestor: Susan Gatford of Counsel, instructed by Michelle Wilson of Wynnes Patent & Trade Mark Attorneys

Decision:  2017 ADO 8

Designs Act 2003 (Cth) – third party request for examination of a design under s 63 – whether email to a number of associates of owner confidential – design forms part of prior art base - registration to be revoked

Background

1.     On 7 June 2010 (‘the Priority Date’) Exlites Pty Ltd (‘the Previous Owner’) filed an application under the Designs Act 2003 (Cth) (‘the Act’). The design number allocated to the sole design in the application was 201012310 (‘the Design’).

2.     The Design was registered on 24 September 2010 and allocated registration number 332890. The product to which the Design relates is described as a ‘Solar bollard ’. It carries the following Statement of Newness and Distinctiveness (‘SOND’):

The entire design is new and distinctive.

3.     The following are the representations contained in the registration:

4.     On 14 October 2011 a request for examination of the Design was filed by the Previous Owner. An initial examination report issued on 29 November 2011 indicated that the examiner considered grounds for revocation of the Design existed on the basis that the design was not new and distinctive. Following a response from the Previous Owner a second examiner was satisfied that the Design was is fact new and distinctive and that no grounds for revocation existed. The Design was certified on 13 January 2012.

5.     On 14 July 2014 the registration was updated to reflect an assignment of ownership of the design from the Previous Owner to Key Logic Pty Ltd (‘the Owner’).

6.     On 16 February 2015 a third party, Sun-Wizard Holding Pty Ltd (‘the Requestor’), requested examination as permitted under s 63 of the Act. The request asserted that the Design was not new and distinctive and was accompanied by material to support this view. The Design was examined again and notice was issued to the parties indicating that no ground of revocation existed. The notice provided the Requestor an opportunity to be heard. On 7 July 2015 the Requestor availed itself of this opportunity.

Evidence

7.     On 18 April 2016 directions were made which provided the parties an opportunity to provide evidence. The Requestor filed the following evidence:

·Statutory Declaration made on 17 June 2016 by Ian Fry, a director of the Requestor, with Exhibits IF-1 to IF-8 (‘Fry 1’);

·Statutory Declaration made on 17 June 2016 by Earl Andrew Palfrey, owner and manager of All Round Supplies Pty Ltd, with Exhibits EAP-1 to EAP-4 (‘the Palfrey declaration’);

·Statutory Declaration made on 15 June 2016 by Michelle Wilson, a registered Trade Marks Attorney employed by Wynnes Patent and Trade Mark Attorneys, the legal representatives of the Opponent, with Exhibit MLW-1; and

·Statutory Declaration made on 11 May 2017 by Ian Fry, with Exhibit IF-1.

8.     The Owner filed the following evidence:

·Declaration made on 5 September 2016 by Michael John Arieni, the Managing Director of the Owner, with Exhibits MA1 to MA4 (‘the Arieni declaration’).

The hearing

9.     I heard the matter in Canberra on 1 August 2017 as a delegate of the Registrar of Designs. David Logan of Queens Counsel, instructed by Paul Davis of Fisher Adams Kelly Callinans Patent & Trade Mark Attorneys appeared for the Owner. Mr Logan’s oral submissions were supplemented by a written summary of submissions filed on 14 July 2017. Susan Gatford of Counsel, instructed by Michelle Wilson of Wynnes Patent & Trade Mark Attorneys, appeared for the Requestor. Ms Gatford’s oral submissions were supplemented by a written summary of submissions filed with IP Australia on 21 July 2017.

10.     At the hearing Mr Logan referred to two cases which were not referred to in his written summary of submissions. I allowed Ms Gatford seven days following the hearing to provide further short written submissions addressing those two cases. Ms Gatford filed those further submissions on 8 August 2017. The Owner filed short submissions in response to Ms Gatford’s further submissions on 11 August 2017.

The prior relationship between the parties

11.     According to Fry 1:

Since 2003 I have been the Managing Director of Joshmika Pty Ltd, which is involved in the, electrical and mechanical design of mobile and stand-alone solar powered devices. Since 2003 I have also been the owner and manager of Irradiance Energy, which undertakes technical and electrical design and development in stand‑alone and transportable solar powered extra low voltage lighting for billboards, parks, roadways, paths, jetties, road works and related events.

In 2008/2009 I was approached by Mike Arieni (Mike). At the time Mike was a director of [the Previous Owner] (Exlites). Mike asked me to become his business partner, and to assist him in both developing and funding a solar bollard for Exlites. I agreed.

Between 2008/2009 and 2013 I provided technical and design input as well as funding … working with Mike and others to develop and commercialise a solar bollard for Exlites. I was a director of Exlites from 25 January 2010 until 22 March 2013.

12.     According to the Arieni declaration:

In late 2008 I met [Ian Fry (Ian)] who was a reseller of Orca Solar Lighting. Orca Solar Lighting were the product distributors for Exlites form 2007.

Over the next few months I built a relationship with Ian who was building solar lighting towers and wanting to use a light produced by Exlites (not a solar bollard light).

Ian sold some of the earlier solar bollard lights that Exlites provided prior to him joining Exlites as a Director. Ian became a Director of Exlites in January 2010, one month after the tooling for the solar bollard was commenced ie the solar bollard shown in [the Design].

Ian was never involved in the design of the solar bollard …

The Legislative Framework

13.     The Registrar must examine a registered design if any person requests that the Registrar do so.[1] In examining a design the Registrar must consider whether a ground for revocation exists.[2] The grounds for revocation include that the design is not a registrable design.[3] A design is a registrable design if the design is new and distinctive when compared with the prior art base for the design as it existed before the priority date of the design.[4] The prior art base for a design consists of:

(a)   designs publicly used in Australia; and

(b)   designs published in a document within or outside Australia; and

(c)   designs in relation to which each of the following criteria is satisfied:

(i)the design is disclosed in a design application;

(ii)the design has an earlier priority date than the designated design;

(iii)the first time documents disclosing the design are made available for public inspection under section 60 is on or after the priority date of the designated design.[5]

[1] Designs Act 2003 (Cth) s 63(1).

[2] Designs Act 2003 (Cth) s 65(1).

[3] Designs Act 2003 (Cth) s 65(2)(a).

[4] Designs Act 2003 (Cth) s 15(1).

[5] Designs Act 2003 (Cth) s 15(2).

14.     A design is new unless it is identical to a design that forms part of the prior art base.[6] A design is distinctive unless it is substantially similar in overall impression to a design that forms part of the prior art base for the design.[7] Section 19 of the Act provides some factors to be considered in assessing substantial similarity, and states:

[6] Designs Act 2003 (Cth) s 16(1).

[7] Designs Act 2003 (Cth) s 16(2).

(1)   If a person is required by this Act to decide whether a design is substantially similar in overall impression to another design, the person making the decision is to give more weight to similarities between the designs than to differences between them.

(2)   The person must also:

(a)   have regard to the state of development of the prior art base for the design; and

(b)   if the design application in which the design was disclosed included a statement (a statement of newness and distinctiveness) identifying particular visual features of the design as new and distinctive:

(i)   have particular regard to those features; and

(ii)if those features relate to only part of the design—have particular regard to that part of the design, but in the context of the design as a whole; and

(c)   if only part of the design is substantially similar to another design, have regard to the amount, quality and importance of that part in the context of the design as a whole; and

(d)   have regard to the freedom of the creator of the design to innovate.

(3)   If the design application in which the design was disclosed did not include a statement of newness and distinctiveness in respect of particular visual features of the design, the person must have regard to the appearance of the design as a whole.

(4)   In applying subsections (1), (2) and (3), the person must apply the standard of a person who is familiar with the product to which the design relates, or products similar to the product to which the design relates (the standard of the informed user).

(5)   In this section, a reference to a person is a reference to a court.

15.     The ‘informed user’ was considered by Kenny J in Review 2 v Redberry Enterprise wherein her Honour stated:

In summary, the standard of the informed user is an objective one. … The informed user is not an expert, but must be more than barely informed. The focus for consideration is on eye appeal and not on internal or less visible manufacturing features. …

Thus, whilst there will be some women who subscribe to fashion magazines (such as Vogue or Collezioni that illustrated the prior art in this case) and have particular knowledge of, and familiarity with, fashion trends, there will be many other women who lack such knowledge and familiarity. Precedent and the text of s 19(4) indicate that it is from the perspective of someone closer to the former group that the newness and distinctiveness of the Review Design and the similarity of the Redberry garments in terms of overall impression must be judged.[8]

[8] (2008) 79 IPR 214, 221 [26]-[27], approved by the Full Federal Court in LED Technologies Pty Ltd v Roadvision Pty Ltd [2012] FCAFC 3, [72].

16.     If a ground for revocation exists the Registrar must give the relevant parties a notice stating that the registration of the design is revoked and make an entry in the Register.[9]

[9] Designs Act 2003 (Cth) ss 68, 115.

Discussion

17.     The Requestor submitted that the prior art base in this matter includes the following:

(a)   the representations of the Exlites solar heads and solar bollards shown in Exhibits IF-1 to IF-5 inclusive of Fry 1; and

(b)   the representations of the Exlites solar bollards shown in Exhibits EAP-1 to EAP-3 inclusive of the Palfrey declaration.

18.     It is stated in the Palfrey declaration that Mr Palfrey was the founder of All Round Supplies Pty Ltd (‘ARS’). Mr Palfrey described ARS as ‘the leading distributor of electrical infrastructure products to utility contractors in Australia’. Mr Palfrey further declared:

[The Previous Owner] supplied a variety of solar lighting products to ARS over the years. From 2009 Mike Arieni … sought to have ARC promote and sell a solar bollard that [the Previous Owner] was developing. During that time he provided me with the following documentation concerning [the Previous Owner’s] solar bollard to use to market the product:

(a)…

(b)an email dated 21 April 2010 which attached a document titled ‘Exlites Bollard Comparisons v2’. Now shown to me and marked EAP-2 is a copy of the 21 April 2010 email and attachment; and

(c)an email dated 3 May 2010 which attached a document which refers to ‘New 2010 GENII Design Features’. Now shown to me and marked EAP-3 is a copy of the 3 May 2010 email and attachment.

19.     The email in Exhibit EAP-2 (‘the first GEN-II email’) has an attachment which is somewhat in the nature of a data sheet and is two pages long. The first page is headed ‘NEW BOLLARD COMPARISON V2’. The second page is headed NEW BOLLARD POLE TEST. At the bottom of each page are the words ‘© 2003-2010 EXlites Pty Ltd Australia – All rights reserved’. The attachment contains on the first page, amongst other material, the following images:

The first of the four images shows what is referred to in this matter as the GEN-I solar bollard. The remaining images show what is referred to as the GEN-II solar bollard.

20.     The email in Exhibit EAP-3 (‘the second GEN-II email’) has a single page attachment which, although described in the email as ‘a pre-release data sheet’ is, in my view, more in the nature of a flyer. It bears, at the bottom, a copyright notice with identical wording to that found in the attachment to the first GEN-II email. The attachment is headed, ‘SOLAR BOLLARD’, with a sub-heading ‘2010 “Australian Made” Global Design’. Underneath the headings appears the following text:

EXlites are proud to presents [sic] our latest generation of heavy duty and vandal resistant SOLAR BOLLARDS for use in all commercial infrastructure applications throughout the world

The flyer contains, amongst other material the following images:

21. During the oral hearing it was conceded by the Owner that the GEN-II images in the emails disclose the Design. However, the Owner contends that these images of the Design do not constitute part of the prior art base because the first GEN-II email and the second GEN-II email were confidential since they were sent to their recipients in circumstances which imported an obligation of confidence and as a consequence were not ‘published’ for the purposes of s 15(2)(b). The Requestor, on the other hand, submits the emails were not confidential and therefore constitute publication of the GEN-II images. As a result, submits the Requestor, the images in the attachments to the emails constitute part of the prior art base and disclose the Design.

The meaning of ‘published’

22.     There is general agreement between the parties in this matter that for there to be relevant publication, the document containing the design must be made available to a member of the public without any restriction as to secrecy or confidentiality. The Owner referred to the discussion surrounding ‘prior art information … made publicly available’ in Stanway Oyster Cylinders Pty Ltd v Marks.[10] That form of wording appears in s 7(1) of the Patents Act 1990 (Cth). In that case, Drummond J stated that:

‘[P]ublicly available’ involves, in addition to it being accessible to the public, that a person to whom the information is disclosed in that person’s capacity as a member of the public is free, in law and equity, to make use of the information.[11]

[10] (1996) 35 IPR 71.

[11] Ibid 75.

23.     This statement of the law is reflected in Part 2, section DO7.3.2 of the Design Examiner’s Manual which states:

A design is published in a document if … a person not bound by express or implied confidentiality has knowledge of the content of the document.

Were the contents of the emails confidential?

24.     The Owner submitted that the contents of the emails and the attachments in Exhibit EAP-2 and Exhibit EAP-3 ‘were confidential and received in circumstances importing an equitable obligation of confidence in the recipient, Palfrey and ARS’. There is general agreement between the parties with respect to the principles and law surrounding the equitable obligation of confidence; however the Requestor refutes the assertion that the emails are confidential when those principles are properly applied.

25.     The principal authority concerning confidential information in equity is Coco v AN Clark (Engineers) Ltd.[12] It can be taken from the judgement of Megarry J that—apart from where confidentiality is imposed by contract—there are two requirements which must be satisfied before information is considered to have been provided with an obligation of confidence. Firstly, the information must have the necessary quality of confidence about it. Secondly, that the information must have been imparted in circumstances importing an obligation of confidence.[13] With respect to the first requirement Megarry J stated:

However confidential the circumstances of communication, there can be no breach of confidence in revealing to others something which is already common knowledge. But this must not be taken too far. Something that has been constructed solely from materials in the public domain may possess the necessary quality of confidentiality: for something new and confidential may have been brought into being by the application of the skill and ingenuity of the human brain. Novelty depends on the thing itself, and not upon the quality of its constituent parts. Indeed, often the more striking the novelty, the more commonplace its components.[14]

[12] (1968) 1A IPR 587 (‘Coco’). Coco was cited with approval by Gleeson CJ in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199, [30] (‘Lenah Game Meats’).

[13] Ibid 590.

[14] Ibid.

26.     With respect to the second requirement Megarry J stated:

However secret and confidential the information, there can be no binding obligation of confidence if that information is blurted out in public or is communicated in other circumstances which negative any duty of holding it confidential. From the authorities cited to me, I have not been able to derive any very precise idea of what test is to be applied in determining whether the circumstances import an obligation of confidence. … It may be that that hard-worked creature, the reasonable man, may be pressed into service once more: for I do not see why he should not labour in equity as well as at law. It seems to me that if the circumstances are such that any reasonable man standing in the shoes of the recipient of the information would have realised that upon reasonable grounds the information was being given to him in confidence, then this should suffice to impose upon him the equitable obligation of confidence. In particular, where information of commercial or industrial value is given on a business-like basis and with some avowed common object in mind, such as a joint venture or the manufacture of articles by one party for the other, I would regard the recipient as carrying a heavy burden if he seeks to repel a contention that he was bound by an obligation of confidence. … I merely add that I doubt whether equity would intervene unless the circumstances are of sufficient gravity; equity ought not to be invoked merely to protect trivial tittle-tattle, however confidential.[15]

[15] Ibid 591.

27.     It is useful to reproduce the body text of the GEN-II emails at this point. The first GEN‑II email contains the following:

To All,

As promised here it is. I will let the document speak for itself.

I put the blue LED into the mix as well as so you get an idea of what the static LED colours (blue, red, green, yellow/orange) will be like as well.

I am considering reducing the milliamp draw from the PCB by 20%-25% in each model as we are far more brighter than we have ever been before with these new versions (with reflector enhancement still to come) and would like your opinions as most of you that this has been emailed to re-sell these for us into your markets globally.

Benefits will be:

·Lower battery cycle increased life

·Longer autonomy

·Quicker recharge due to less daily draw down

·Better operating ability in lower peak sunlight locations

Sincerely,

Mike Arieni

28.     The second GEN-II email contains the following:

To All EXlites Associates,

Attached for you is a pre release data sheet on the new 2010 solar bollard.

This will show you exactly the size difference between the current version and the old model.

This is also to give you all new system design facts prior to the new product information brochure that will be completed shortly once all certifications have been completed.

We will receive the new PCB’s this week to do the lux trials and make the final decision on PCB’s (LED’s) that will be available. These ones coming have the power draw reduced and we have other variants coming to trial just to see how low we can take the new 3 LED version but still keep it better than the previous 6 LED version and what we can do with the new 6 LED version.

As you can see the % increases in battery capacity and solar panel input are much higher than any previous version which will offer us I believe the best stand alone solar lighting product in Australia and globally.

We again apologise for all the delays and frustrations caused to some of you but as I have explained it has been out of our direct control as we are using another local Australian company to arrange the tooling for us and the delays are with them and their tool maker.

All going to plan this will be finished very soon so we can start production.

Sincerely,

Mike Arieni

29.     Both emails contain text below the signature block which is in a smaller font size and is typical of text included by default at the bottom of corporate type emails, being, in this case:

Please consider the environment before printing this email

Confidentiality: This E-Mail is from EXlites. The contents are confidential and are intended only for the named recipient. The recipient is hereby notified that any use, copying, disclosure or distribution of the information contained in the E-Mail is strictly prohibited. If you have received this E-Mail in error, please reply to us immediately at [email protected]. Please delete the document from your E-Mail system.

Viruses: Any loss or damage caused by using this material is not the sender’s responsibility. EXlites will be limited to re-supplying the material. No warranty is made that this material is free from computer virus or other defect.

30.     The Owner submitted that the two requirements discussed in Coco are satisfied in respect of both GEN-II emails because:

First, the information provided in the email attachments was confidential in nature:

(a)It is clear from the covering emails that the attachments clearly related to products still being developed. That implies that the information is not in the public domain or for further dissemination at that stage. …

(b)None of these data sheets was in the form of a product brochure to be provided to the public, quite unlike that provided at the trade fair in World Technologies v Tempo.[16]

Secondly, the information was imparted in circumstances importing an obligation of confidence:

(a)The person who communicated the information, Mr Arieni, says [in the Arieni declaration] the information to update resellers on product development, was provided with ‘an expectation that any of the material I provided … was kept confidential until the product was available for distribution’. It was information ‘for the resellers knowledge only and … clearly not marketing material for wider distribution’.

(b)The confidentiality restriction in the email footer restricting the use of confidential content catches these attachments, being confidential in nature.

(c)The fact that a similar email footer may have been used by Mr Arieni, in 2012 (after the priority date), to communicate non-confidential information to another person ([Fry 1]) is irrelevant. It does not affect the operation of that confidentiality restriction, before the priority date, so as to require Mr Palfrey (and his company) as recipient of confidential information contained in an email attachment to ensure such information remained confidential.

[16] (2007) 71 IPR 307 (‘Tempo Case’).

31.     The TempoCase referred to by the Owner, above, concerned an importer and wholesaler of household goods and electrical appliances (‘WT’), another importer and wholesaler of household consumer items, including vacuum cleaners (‘Tempo’) and a manufacturer of vacuum cleaners, Suzhou Fak Electric Co Ltd (‘SF’). Following discussions in late 2004, SF agreed that WT would be granted exclusive rights to distribute, in Australia, a vacuum cleaner which SF manufactured (‘the MC‑801’). On 16 June 2005, WT applied for registration of the design of the MC‑801 in Australia. The Chinese Export Commodities Fair was held in Guangzhou over the period 16‑20 April 2005. The MC-801 was on display at the fair. At the fair SF provided Tempo with a brochure for the MC-801. It was unclear from the evidence in the case whether SF indicated to Tempo that the exclusive right to distribute the MC‑801 in Australia had already been granted to WT. Justice Jessup considered that the provision of the brochure to Tempo at the fair amounted to publication of a disclosed design which was substantially similar in overall impression to the MC‑801 design.[17]

[17] Ibid 324 [61].

32.     The Owner referred to two other cases to support their submissions. The first was Del Casale v Artedomus (Aust) Pty Ltd (‘Del Casale’).[18] This case concerned use of information acquired by employees during their employment and whether the employees were entitled to use that information after leaving that employment. Campbell JA referring to the judgment in Coco stated:

On Megarry J’s account, the information is ‘of a confidential nature’ if it is not ‘public property and public knowledge’ or if it is ‘constructed solely from materials in the public domain’, to which ‘the skill and ingenuity of the human brain’ has been applied. … This is a fairly undemanding test.[19]

[18] (2007) 73 IPR 326.

[19] Ibid 346 [103] (emphasis added by Owner).

33.     Campbell JA further explored the requirements in Coco and stated:

When one is deciding whether a piece of information is the subject of an enforceable equitable obligation of confidence, the first step of the inquiry … is directed to whether the information has the fairly low level of intrinsic confidentiality that his Honour identified. The ‘second step’ identified by Megarry J in Coco, really has two quite distinct elements. The first element amounts to whether the information was imparted in circumstances where a reasonable person must have realised, on reasonable grounds, that he or she was not free to deal with the information as his or her own, or must have realised that he or she could deal with the information only within certain limitations. The second element has nothing to do with the circumstances of imparting the information but involves a return to the intrinsic nature of the information itself. It involves whether the information has the degree of intrinsic importance to warrant equitable intervention.[20]

[20] Ibid 353 [133].

34.     The Owner referred also to Streetscape Projects (Australia) Pty Ltd v City of Sydney.[21] This case concerned the use of information acquired during the performance of a comprehensive written contract. The Owner noted that Barrett JA cited with approval the words of Campbell JA at para 103 in Del Casale, and stated:

The confidential quality of information does not depend on its being in the nature of a trade secret.[22]

Barrett JA also stated:

Implicit in the statement of principle are two propositions of particular relevance to this appeal: first, that particular information is specifically identified; and, second, that the confidential nature of the identified information is established.

The need for specificity in the identification of the information said to be confidential … comes from the fact that the court must make an assessment of the quality of that information, that is, whether it is in truth of a confidential nature. An aspect of that inquiry may turn on whether the whole or some part has become the subject general disclosure or notoriety. Precise delineation of the subject matter is accordingly essential. …

In O’Brien v Komesaroff Mason J said that ‘the accepted conception of confidentiality’ in substance ‘involves the person seeking  to protect the information largely keeping it to himself’.[23] [24]

[21] [2013] NSWCA 2.

[22] Ibid 788 [160].

[23] O’Brien v Komesaroff (1982) 150 CLR 310, 326.

[24] Streetscape Projects (Australia) Pty Ltd v City of Sydney [2013] NSWCA 2, 788, [158]-[161].

35.     Justice Finn in Australian Medic-Care Co Ltd v Hamilton Pharmaceutical Pty Ltd noted that the essential attribute of confidential information is ‘relative secrecy’[25] and went on to say:

[25] [2009] FCA 1220, [633] (‘Medic-Care’).

Whether this attribute exists in a given case will often be a question of degree and a variety of criteria have been invoked in various contexts to sharpen the inquiry to be made:

(i)is the information in question widely known, or publicly available in the relevant industry, trade, etc;

(ii)has the confider made the information public by using it in its manufactured products and placing it on the market …

(iii)did the confider produce or obtain the information only after the expenditure of time and/or money by way of research or in the application of skill and ingenuity;

(iv)what steps has the confider taken to preserve the secrecy of the information and to prevent it becoming public knowledge;

(v)is the information intrinsically valuable or is it valuable to the confider or to a competitor or other interested party; and

(vi)would a reasonable person in all the circumstances recognise the information to be the ‘property’ of the confider.[26]

[26] Ibid (citations omitted).

36.     The Owner submitted that all of the inquiries from Medic-Care, above, are answered in favour of the GEN-II emails being confidential, asserting in oral submissions:

·     The information was not widely known or publicly available;

·     The GEN-II emails are talking about a new product that is still being developed;

·     The evidence is that the GEN-II solar bollard was not available for sale until 2012;

·     The product would not be capable of being reversed engineered as the GEN-II solar bollard was not ‘out there’;

·     The evidence supports a view that the Owner expended a significant sum of money on tooling for the GEN-II solar bollard;

·     The steps taken to preserve the secrecy of the information were: the confidentiality notice at the bottom of the GEN-II email; the copyright notice at the bottom of the pages in the attachment to the GEN-II email;

·     The information is valuable to the confider because we are talking about a product which the evidence indicates is new, was not on the market and was something that was evidently valuable to the provider of the information; and

·     It is certainly the case here that a reasonable person would recognise the information as the property of the Owner.

37.     With respect to the confidentiality notice at the bottom of the GEN-II emails the Owner submitted:

Whether or not it may have been a standard form of disclaimer … it will attach if you have something that is truly confidential. It won’t make something confidential that’s not, but if there is confidential information included in an email … it will attach and will prevent someone who receives that information from using or disclosing inappropriately that information.

38.     The Owner further submitted in respect of the confidential nature of the disclosure that there may be other information that is confidential, but the images of the GEN-II solar bollard, at least, are confidential. The Owner referred to the text of the first GEN-II email: in particular, the reference to ‘reducing the milliamp draw from the PCB’, the reference to the ‘reflector enhancement still to come’, and that Mr Arieni was seeking the opinions of the recipients of the email ‘as most of you that this has been emailed to re‑sell these for us’. The Owner submitted that Mr Arieni was keeping the Owner’s resellers updated, he was asking their opinion and was talking about a product that was still being developed,

39.     As to whether a duty of confidentiality attaches to the second GEN-II email, the Owner has submitted that it ‘is even stronger’. The Owner has submitted that the attachment is a pre-release data sheet, ‘it’s information for resellers’, ‘it’s pre-production’, all of which are indicated by the text of the email. The Owner stressed the ‘newness’ aspect of the design and that ‘something is going to come and be disseminated, but that’s not this’. The Owner also submitted in respect of the second requirement that:

Mr Palfrey and his company would have understood that this is not information that they were free to use as they wished—disseminate it, publish it, disclose it—but it was for their information at this point in time.

40.     The Owner referred also to the Arieni declaration wherein it was declared:

As is normal in any commercial relationship I kept all my resellers up to date with progress in relation to new products. There was an expectation that any of the material that I provided to my resellers was kept confidential until the product was available for distribution. To further reinforce this fact I placed a confidentiality statement on the bottom of my emails …

41.     The Owner also noted in oral submissions, that despite being put on notice by the Arieni declaration about the asserted confidential nature of the GEN-II emails Mr Palfrey did not indicate that he made any use of the attachments to the GEN-II emails.

42.     In response the Requestor noted that the burden is on the Owner to establish confidentiality and submitted the following:

While my learned friend made much of the fact that it’s not public information so it’s confidential, I seriously cavil with that: that is not the test. … The test is, ‘Is it confidential?’.

43.     At the hearing the Requestor also addressed some of the authorities put forward by the Owner and submitted that the criteria that will apply in the assessment of confidentiality will depend on the context. It was noted that many of cases concerned manufacture of secret formulas or secret ways of making something; none deal with the present situation where a manufacturer is providing information to an existing customer. It was submitted, ‘The only reason to give it to them is that they are going to sell.’

44.     In respect of the Owner’s reliance (to some extent) on the footers of the GEN-II emails and the copyright notices in the attachments, it was submitted by the Requestor that these are:

Really last gasp grabs for things. What it is, is trying to pin some sort of communication of the obligation of [confidentiality] … If something is really confidential—and it has to be really confidential to be protected under breach of confidence—you don’t just rely on your email footer … and you don’t just rely on your copyright notice, because that relates to copyright.

45.     The Requestor submitted that the case closest to the matter at hand is ‘the brochure at the trade fair case’: the Tempo Case. In the Requestor’s words, ‘there was a prototype’, ‘it was a pre-release brochure’ being handed out with the implication that ‘this is what we will make for you if you place an order’.

46.     For the following reasons, I am not satisfied that the attachment to the second GEN‑II email, at least, was imparted in circumstances importing an obligation of confidence. I am not persuaded that the confidentiality notice at the bottom of the email has the effect submitted by the Owner. Case law on the effectiveness of such notices is scant to say the least. Nevertheless, it is apparent that notices of that type are added almost universally by businesses as a matter of course beneath the signature blocks of their emails regardless of the content of the email to which they are appended. It is unlikely that any recipient of an email in a business setting reads beyond the signature block every time they receive an email. It is far more likely that they never read beyond the signature block. While a recipient is likely aware that there is probably such a notice lurking there—should they happen to turn their mind to the question—the ubiquitous presence of such notices means that they are unlikely to have the effect asserted by the Owner, regardless of the nature of the material either in the email or attached to it. It seems to me that in cases where what is contained in emails is truly confidential, and a sender wishes to make that known, a confidentiality notice at the beginning of an email is far more likely to be effective in importing an obligation of confidence to the recipient.[27]

[27] See for example: Mattel, Inc. v. MGA Entertainment, Inc., 2010 U.S. Dist. LEXIS 102461, 23 (C.D. Cal. Sept. 22, 2010).

47.     Neither does the copyright notice on the attachment to the second GEN-II email assist the Owner. Similar copyright notices appear frequently on a myriad of documents which are not confidential, for example, published works of fiction. Confidentiality and copyright are two quite different things.

48.     The second GEN-II email was not, for example, sent to a single manufacturer who was to produce the solar bollard on behalf on of the Owner. Rather it was sent to ‘All EXlites Associates’. How many recipients this constitutes is unclear, but it is apparent that most of the recipients are sellers of the Owner’s products. I am not satisfied that the wording of the email is suggestive of confidentiality at all: it looks instead like an attempt to create a marketing ‘buzz’ regarding what is described in the email as ‘the best stand-alone solar lighting product in Australia and globally’. The reasonable person standing in the shoes of the recipient would be justified in considering the email in that light and to pass on the information contained in the email to their own customers: perhaps by showing them the attachment and indicating that this is what is shortly to be available.

49.     It is not sufficient that Mr Arieni had an expectation that the material he provided in the email was kept confidential. That expectation was not clearly communicated nor was it apparent from the circumstances in which the email was sent. To paraphrase Mason J, quoted above,[28] if the Owner sought to protect the Design by keeping it confidential, he ought to have kept it to himself.

[28] Streetscape Projects (Australia) Pty Ltd v City of Sydney [2013] NSWCA 2, 788, [158]-[161].

Conclusion

50.     I have found that the second GEN-II email was not imparted in circumstances importing an obligation of confidence, thus, the second requirement in Coco has not been met. Consequently, there was no equitable obligation of confidence surrounding the email. The images of the GEN-II solar bollard in the second GEN-II email were therefore published. As the publication occurred before the priority date it follows that the Design is not new and distinctive when compared to the prior art base, and consequently is not a registrable design. A ground for revocation of the Design therefore exists.

Decision

51.     I am satisfied that a ground of revocation has been made out. I direct that Registration Number 332890 be revoked one month from the date of this decision. If the Registrar is served with a notice of appeal from this decision before that time, I direct that revocation shall not occur until either the appeal is withdrawn or a court so orders.

Costs

52. The Requestor has sought an award of costs in its favour. I see no reason to depart from the general rule that costs follow the event. As the Requestor has established the existence of a ground of revocation, I award costs against the Owner under s 127 of the Act.

Robert Wilson

Hearing Officer
Hearings and Oppositions
17 October 2017