Footscience International Limited v Xu

[2015] NZHC 1739

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-1573 [2015] NZHC 1739

UNDER

The Copyright Act 1994

IN THE MATTER

of breach of Copyright Act 1994 and breach of confidence

BETWEEN

FOOTSCIENCE INTERNATIONAL LIMITED

Plaintiff

AND

J XU
First Defendant

AND

GAIT TECHNOLOGY INTERNATIONAL LIMITED Second Defendant

Hearing:	23 July 2015
Appearances:	P van Keulen for plaintiff
Judgment:	28 July 2015

JUDGMENT OF DAVIDSON J

[1]      These  proceedings  are  brought  by  the  plaintiff  against  Jin  Xu  and  Gait

Technology International Limited as first and second defendants.

[2]      The statements of defence by the first and second defendants were struck out on 15 December 2014.

[3]      Foot Science manufactures and sells orthotics, and has developed what is confidential information in that regard.

FOOTSCIENCE INTERNATIONAL LIMITED v XU [2015] NZHC 1739 [28 July 2015]

[4]      The proceedings essentially are based on an allegation that Mr Xu and the second defendant, “Gait Technology” set up in unlawful competition, using confidential information derived from Mr Xu’s employment with Foot Science.

[5]      The proceedings as filed allege unauthorised use of confidential information and breach of copyright, but the formal proof proceeded only on the basis of the confidential information. A contractual obligation derived from employment is pleaded against Mr Xu, and a duty of confidence pleaded against Mr Xu and Gait.

[6]      To secure judgment, even by formal proof, Foot Science must show there is confidential information owned by it, and the defendants have had access to such in circumstances   imposing   an   obligation   of   confidence,   and   there   has   been unauthorised or unlawful use of such confidential information by either of the defendants.

[7]      Mr van Keulen cited well established authority as to the requirements at law for the information to be regarded as confidential, and evidence from deponents Messrs Boyd, Morrison and Keats describe the development of the manufacturing process and the foam used.  The software for the machine which mills the foam was developed by the plaintiff.

[8]      The essential conclusions drawn by deponents Mr Morrison and Mr Keats are that the Orthogait orthotics, associated with the defendants, are replicas of the Formthotic orthotics, and could only have been manufactured using the same unique process used and developed by Foot Science.   To create a replica, a manufacturer would need the underlying data and information.

[9]      The obligation of confidence is clear in the circumstances described, and there is strong evidence that the defendants have breached their obligations in terms of the confidential information including assertions by Mr Xu that he had started his own orthotic business and manufacturing facility, and comparing that product with that of Formthotics. Further, the defendants approached  Foot Science’s overseas distributors using specific contact details which must have come from Foot Science’s contact list.

Disposition

[10]     The  plaintiff  has  on  the  evidence  and  submissions  made  out  a  case  for judgment, by formal proof.

[11]     Orders  are  made  in  terms  of  the  draft  put  before  the  Court  other  than correction  of the name  of the Presiding Judge.  For convenience,  that  Order  is attached to this Judgment.

……………………………….

Davidson J