Equitable obligation of confidence
58 Dais contends that Mr Petro's use of the source code in the table file and the editor file which he downloaded in about June 2004 amounted to a breach of an equitable obligation of confidence which arose in the circumstances, and which would be enforced by permanent injunction. It was that code which, according to Dais, was the confidential information the use of which would be restrained in accordance with the principles referred to by Gummow J in Corrs Pavey Whiting & Byrne v Collector of Customs (1987) 14 FCR 434, 443 and again in Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health (1990) 22 FCR 73, 87. In Smith Kline, Gummow J said (22 FCR at 87):
A general formulation apt for the present case of an equitable obligation of confidence has four elements: (i) the plaintiff must be able to identify with specificity, and not merely in global terms, that which is said to be the information in question, and must be able to show that (ii) the information has the necessary quality of confidentiality (and is not, for example, common or public knowledge), (iii) the information was received by the defendant in such circumstances as to import an obligation of confidence, and (iv) there is actual or threatened misuse of that information, without the consent of the plaintiff.
Gummow J left open the question whether there was an additional element, that the breach of confidence would inflict or be likely to inflict "detriment", as had been suggested by Megarry J in Coco v AN Clark (Engineers) Ltd [1969] RPC 41, 47-48. However, his Honour did opine, obiter, that the existence of detriment was not necessary (22 FCR at 111-112).
59 The first and fourth of his Honour's elements may be dealt with shortly. As to the first, it was not submitted on behalf of Mr Petro that the relevant source code was not information identified with the requisite specificity. Although I might otherwise have thought there was a question whether some parts or segments of the code had a greater claim to confidentiality than others, both sides conducted their cases upon the basis that the code as a whole either was, or was not, entitled to protection, and I shall likewise adopt that basis for the purposes of these reasons. As to the fourth element, counsel for Dais submitted that, in Smith Kline, "Gummow J discounted the detriment requirement". Counsel for Mr Petro did not submit the contrary, in which circumstances I think I should regard Dais's title to relief as complete upon demonstration of unauthorised use of the information found to be confidential.
60 Before turning to consider the second and third elements in Smith Kline, there are some additional facts, specific to the matter of confidentiality, which should be mentioned. In his affidavit sworn on 24 April 2007, Mr Perlinski devoted a group of 16 paragraphs to the subject "Commercial loss to Dais if WebStable product is used by others". One of those paragraphs contained the following passage:
Each application of WebStable has a written license [sic] agreement, entered into by each client, which enable [sic] the client to utilise the site with no restriction for the term of their own business purposes. The license [sic] has been put in place by DAIS to protect the code and restrict the client from disclosing the code and administrative access to the code to a third party or competitor.
Mr Perlinski exhibited a copy of "the template or pro forma written licence agreement Dais enters into with each of its clients by way of licensing arrangements." This agreement is drafted very favourably for Dais, and contains wide and tight requirements as to confidentiality. A client who executed this agreement could be in no doubt but that the source code for all the files that made up the CMS in WebStable was not to be disclosed to third parties.
61 There is a question whether licence agreements of this kind were used by Dais at the time that Mr Petro was employed, and if so whether he knew thereof. There was evidence that, during the time of his employment with Dais, Mr Petro was involved in a client liaison to a significant degree. In his affidavit sworn on 24 April 2007, Mr Perlinski referred to 8-10 projects where Mr Petro, and another staff member there mentioned, "had an intimate knowledge of the client's circumstances, the project details and the financial details of the project." Mr Petro himself gave evidence that, for a lot of the Dais projects, his was "a client liaison role". He said he was "quite good with clients". This line of evidence caused me to wonder whether Mr Petro knew of the terms of the agreements into which Dais entered with its clients, as mentioned in the previous paragraph. I say "wonder", since the subject was not broached by either side, either in the cross-examination of Mr Perlinski or Mr Petro, or in submissions. In these circumstances, I do not think I should find that Mr Petro had such knowledge. In the first place, Mr Perlinski's evidence as to terms of the agreements is expressed in the present tense - it speaks as at April 2007. Mr Petro left the employ of Dais in December 2003. There is no evidence of any similar agreement that was in place during the period of Mr Petro's employment. Next, there is the absence of any direct evidence as to Mr Petro's knowledge, or likely knowledge, of the agreements. Had it been part of his role to procure the execution of such agreements with clients, or otherwise to liaise on contractual aspects, it would, I infer, have been a fairly simple matter for Mr Perlinski to have said so in his evidence. And finally, there is the absence of any submission on behalf of Dais that I should find that Mr Petro in fact knew of the terms of these agreements. It is true that counsel for Mr Petro also left this area untouched, but it was a matter upon which Dais bore the onus of proof, and of persuasion, and I am bound to conclude that it made no attempt to satisfy either. I proceed, therefore, on the basis that, however tight and protective Dais's contractual arrangements with its clients may have been, they were unknown to Mr Petro.
62 In his affidavit sworn on 24 April 2007, Mr Perlinski also referred to the steps which Dais took to ensure that its employees, including Mr Petro, maintained business confidentiality in a number of respects. Exhibited to the affidavit was a copy of each of Mr Petro's employment agreement and of a "confidentiality agreement" referred to therein. The employment agreement (in the form of a letter written on behalf of Dais in which the "you" was Mr Petro) contained the following provisions:
We have great pleasure in offering you the fulltime position of Web Developer at DAIS with DAIS Studio Pty Ltd.
We would like you to sign, before your proposed commencement date, the attached copy of this letter indicating your acceptance of the employment conditions, including DAIS policies, set out below. Please read the document carefully and seek advice with the Studio Manager if there is anything you need clarified.
….
CONFIDENTIALITY AGREEMENT
In your position, you will have access to a significant amount of confidential and sensitive business information about DAIS, its operations and business plans.
It is a condition of your employment that you agree to be bound by the provisions of DAIS Confidentiality Agreement which is attached to this letter of appointment. Your signing of this DAIS Confidentiality Agreement will indicate your acceptance of the terms and conditions contained within the agreement.
….
Inventions, patents, designs, copyright and trade marks
An invention, discovery, improvement, design or trademark you use or make while employed by DAIS and in connection with its business will remain the property of DAIS.
Ben, it gives us great pleasure to offer your employment with DAIS and we look forward to a rewarding association.
Would you please sign this letter and the Confidentiality Agreement, as acceptance of our offer and the terms and conditions of employment and return them to DAIS as soon as possible.
The confidentiality agreement contained the following provisions:
Whereas:
A. You are employed as a Web Developer by DAIS Studio Pty Ltd and in that capacity have access to and acquire knowledge of valuable trade secret [sic], confidential and proprietary information including, but not limited to DAIS and DAIS related parties (as hereafter defined) marketing and business methodology and their financial condition (hereafter "Confidential Information"). In this agreement "Related Party" and "Related Parties" shall mean and include any related corporation or business entity of DAIS (as such from is defined in the Corporations Law as amended) or any other company, organisation or institution in any way associated with or connected with or which enjoys a special course of dealings with DAIS or any client of DAIS.
B. You agree that all such Confidential Information is disclosed to you in confidence and you undertake to hold same as strictly confidential and secret under the term of this agreement.
Now this agreement witnesseth and it is hereby agreed and declared as follows:
1. To protect DAIS and it's Related Parties interests in maintaining the confidentiality of Confidential Information, you shall not without the written consent of DAIS at any time either during or after the termination of your employment for whatever reason directly or indirectly publish or reveal in any way whatsoever or use for your own or another's benefit, any of the Confidential Information which you may acquire whilst an employee of DAIS and you shall maintain such secrecy in respect of all Confidential Information and shall take all necessary and proper precautions to prevent any unauthorised disclosure or use thereof.
2. Without limiting the terms of Clause 1:-
(a) You shall make no use of any Confidential Information except as necessary in performing your obligations as an employee of DAIS;
(b) You shall not without obtaining the prior written consent of DAIS disclose to any Third Party or permit and Third Party access to any materials or information containing the Confidential Information except for those employees of DAIS with a specific operational need to have such access or knowledge;
(c) You shall at all times keep, use or maintain any materials containing the Confidential Information in secure locations;
(d) You shall make no unauthorised copies of any materials embodying the Confidential Information.
….
8. All improvements, discoveries, ideas and inventions made or conceived along or in conjunction with others arising out of or in the course of your employment, whether or not the proper subject of a trademark, patentable or copyrightable (hereinafter called "the inventions") will be the sole and exclusive property of DAIS and you will promptly disclose in writing to DAIS all the inventions. You will, upon request and at the employer's expense (notwithstanding that your employment has ceased for any reason), execute any agreements or documents and do all such further acts as DAIS may reasonably require in order to assign it to any right, title and interest in any or all of the inventions.
63 Mr Perlinski referred also to the practices and protocols of Dais, which were said to be calculated to maintain the confidentiality of information to which employees became privy from time to time. He said that "[o]nly certain DAIS development team members have access to the coding scripts, backup files and development servers at DAIS". He said that other staff were restricted from access by password security and by reason that the computer drives on which the confidential material was contained could not be accessed from their work stations. The "creative team" were additionally excluded from access to the WebStable login system on the development servers because they used Macintosh computers. Mr Perlinski continued:
The security of registers, passwords and confidentiality management protocols is documented in written procedure manuals, provided to all employees both in hard copy and electronic version.
He exhibited relevant extracts from the procedure manuals.
64 The first such extract was a pro-forma letter of offer of employment, seemingly in the same terms as the letter written to Mr Petro (which I have mentioned above). The second extract was a table headed "employment checklist" which apparently had the purpose of assisting the person responsible for engaging a new employee to cover all necessary documents and procedures in that process. It contained a sub-heading "Make sure all forms are in paper file", under which the entry included "letter of offer" and "confidentiality agreement", but there was nothing otherwise presently relevant. The third extract was a document headed "Employment Record Tracking Sheet", which dealt with matters of personnel administration and is not presently relevant. The fourth extract was a pro-forma leave application form. The fifth extract was a list of 11 items headed "Team Conduct". It made no reference to confidential information or to anything with which I am presently concerned. The sixth extract was a workplace bullying policy. The seventh extract was a document headed "Dais Internet Policy". It was concerned with Dais's staff standards with respect to staff usage of the Internet and email facilities. There is a passage which may be relevant to the present case, but which is not altogether clear. It reads:
Employees may not transmit DAIS or client information/documentation to third parties without the express permission of DAIS management or the client, as appropriate Spam is a menace and on no account should users click on links within spam messages. They should delete them.
The eighth extract consisted of passages on the subject of building security. None of this material was explained in submissions made on behalf of Dais. Neither is any of it so self-evidently relevant to the question whether there was an equitable obligation of confidence in relation to the source code for the table file and the editor file as to require its consideration in that context in the absence of such an explanation.
65 I turn then to consider the second of the four elements referred to by Gummow J in Smith Kline, namely, whether the information used by Mr Petro had "the necessary quality of confidentiality". Here the cases have referred to a number of indicators, or "lines of inquiry" (Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167, 193). Recognising that there is nothing prescriptive in these indicators, I note that reference has been made to the skill and effort that were expended to acquire the information; the extent to which the information was known both inside and outside the employer's business; the ease or difficulty with which the information could be properly acquired or duplicated by others; the steps taken by the employer jealously to guard the information; the commercial value of the information and the usages and practices of the industry concerned: see Ansell Rubber Co Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37; Mense & Ampere Electrical Manufacturing Co Pty Ltd v Milenkovic [1973] VR 784, 796-798; Secton Pty Ltd v Delawood Pty Ltd (1991) 21 IPR 136, 149; Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317, 334; Del Casale v Artedomus (Aust) Pty Ltd (2007) 165 IR 148, 160.
66 I accept Mr Perlinski's evidence that Dais has invested very considerably in the development of WebStable as a whole. However, Dais's evidentiary case did not deal directly with the skill, effort or expense associated with the development of the table file and the editor file as such. For all I could tell from the evidence of Mr Suthers, Mr Petro and Mr Lindgren, the development of the code for those files was an unremarkable part of an ordinary week's work. As I have said above in another context, the origin of the table file was a similar file which Mr Suthers downloaded from elsewhere. Mr Lindgren, who was called by Dais and who was the lead developer for the editor file, said nothing on which I could base any meaningful conclusions as to the skill and effort which was involved in the writing of the source code for that file.
67 The evidence which Dais did call on the point was by way of an inference stated by Mr Carpenter. In his second affidavit sworn on 4 July 2007, Mr Carpenter said that he had read the complete body of source code for the HR Advantage web site three times. He said that the code for the table file was "a critical part of the WebStable program due to it being used as part of the source code that retrieves and displays web site content from the WebStable database." He said that writing that code "took a high degree of skill and labour on the part of the author", a conclusion which he drew "by reviewing the type of functions available", which he said included "a means to re-order the table rows and searching for specific text in a table column". Mr Muys disagreed with Mr Carpenter in this respect. In his affidavit sworn on 18 July 2007, Mr Muys referred to these passages in Mr Carpenter's affidavit. He said that the table file in WebStable added only three features to the behaviour of the HTML TABLE visual element, namely, the ability to re-order rows, the ability to search for specific text in a table column and the ability to notify any associated scrollbar to ensure a search result was visible. He noted that Mr Carpenter had referred to the first two of those features.
68 As to the first feature - the means to re-order the table rows - Mr Muys set out in his affidavit the 21 lines of code that gave effect to that feature. He continued:
The sort algorithm implemented by the above code is referred to as Bubble Sort. It is well known as the most trivial sort algorithm known to computer science, and routinely taught to first or second year undergraduates as an example of how not to implement a sort operation.
The amount of labour required to implement this sort feature is minimal. I would expect a Bubble Sort implementation to require no more than 30 minutes effort.
The amount of skill required to implement this feature is comparable to that of a second year undergraduate tutorial question in any IT degree.
Under cross-examination, Mr Carpenter agreed that these lines of code were "a well-known trivial algorithm to first or second year undergraduate IT students", which was "taught as an implementation not to use as a sort operation". He agreed that it would take a reasonably competent programmer about 30 minutes to write these lines of code, in addition to the time spent testing it and ensuring that it worked within the whole program.
69 As to the second feature - searching for specific text in a table column - Mr Muys set out in his affidavit the 13 lines of code that gave effect to that feature. He continued:
The search algorithm used in this function has been given the name "Sequential Search" by computer scientists; however it is the naďve 'one at a time from start to finish' search technique we are all familiar with. It is so trivial that it is only ever taught for the sake of completeness, and it would be considered an easy first year undergraduate tutorial question within any IT degree.
The amount of labour required to implement this is trivial, of the order of five to ten minutes effort.
As mentioned above, the amount of skill required to implement this feature is comparable to that of a first year undergraduate tutorial question in any IT degree.
Under cross-examination, Mr Carpenter agreed that these lines of code meant that the entries on the list in the table were looked at one a time from start to finish, and that the approach involved was something that, when he was an undergraduate, might form part of a first-year tutorial. For a reasonably competent programmer, writing this code might occupy 20-30 minutes.
70 As to the third feature - notifying any associated scrollbar to ensure a search result was visible - Mr Muys said that it involved a single line of code that re-used the standard behaviour of the HTML element defined in the W3C standards and implemented by the browser. He continued:
The amount of labour required to implement this feature is miniscule.
The skill required consists of the basic familiarity with the W3C Standards to be expected of any entry level web developer.
Under cross-examination, Mr Carpenter effectively agreed with Mr Muys, but added that the important point was to know that such a function existed. A junior programmer who did not know of the function - a "time-saving feature" - would write more code than was necessary.
71 On the strength of the evidence to which I have referred, and noting particularly that it was Dais which had it within its power to lead more satisfactory evidence of the actual development of the table file and the editor file, I could not find that any significant degree of skill and effort went into that process of development. I do not take into account the means by which the files were integrated into WebStable as a whole since, although that was undoubtedly a central aspect of the files' utility in WebStable, it was not taken or used by Mr Petro. He took only the files themselves. As to those files, clearly there was skill, and some effort, involved in the writing of the relevant code, but only in the sense that this was done by employees whose expertise lay in that area. For those employees, and others like them in the industry, I rather gathered that the writing of the relevant code was much towards the lower end of the spectrum of difficulty.
72 To what extent was the source code for the table file and the editor file known both inside and outside Dais's business? In the context of the type of business which Dais conducted, the "inside" part of this question should be applied to the source code in the form in which it existed on Dais's own computer system (ie the question is not, I take it, concerned with the knowledge which employees of Dais may have had of the code as located on a computer or computer system external to the business). The answer is that the code was known only to the developers. It was not known to designers and others. As to the "outside" part of the question, there was no evidence that the code as located on a computer - or server - external to Dais was in fact known to anyone other than a Dais-employed developer and the authorised administrator of the server of the commercial client concerned. However, there was much evidence as to the potential for such knowledge, such that I would be inclined to infer that, if no-one in these circumstances in fact knew the code, it was more because the subject was not generally of interest than because such knowledge could not have been acquired. I shall advert to that evidence below.
73 Coming next to the ease or difficulty with which the source code for the table file and the editor file could be properly acquired or duplicated by others, there are two aspects of the relevant technology which bear directly on the point. The first concerns the ability to locate and download the relevant files, as Mr Petro himself did in about June 2004. To provide more detail on that subject, I set out the following passage from the cross-examination of Mr Petro:
Is it your evidence, Mr Petro, that you recalled the DAIS file naming convention from your time with DAIS?‑‑‑Yes.
It was based on knowing that convention that after you left DAIS, you were able then to go straight to a DAIS client website and to obtain both the editor file and the list table file?‑‑‑Yes, that is what I assume that I did.
But you can't recall which particular site it was?‑‑‑I have no idea. It may well have been the DAIS site itself.
So it could be the DAIS site. Now, to get that from the DAIS site, you wouldn't need to access the back end, would you?‑‑‑No.
So you could just literally type in the URL for DAIS?‑‑‑That is right.
Execute some functions and voila, there it is?‑‑‑Voila. Type in www.dais.com.au/_script/admin_script/cdaitable.js and voila.
And that would give you literally the table file source code?‑‑‑The code would be shown on the browser, that is right.
You would have highlighted it?‑‑‑Most likely file, save as, and that is when I would have changed it to the file name that I desired, which I think was list table.
Likewise, in his first affidavit sworn on 24 April 2007, Mr Carpenter said:
The two Foundation Year source code files ("FY") are publicly available files. On 18 April, 2007 I accessed these files, after provision to me of these files by DAIS, via the two internet web addresses (URLs [Uniform Resource Locator]), http://www.foundationyear.com/admin/_script/CDAIEditor.js and http://www.foundationyear.com/admin/_script/CATable.js.
As I have mentioned above, the "Foundation Year" web site was one built by Mr Petro. The table and the editor file referred to in the extract set out above were one of Dais's points of reference in their copyright infringement case against him. In his affidavit sworn on 18 July 2007, Mr Muys referred to that extract and said:
Paragraph 35 the First Carpenter Affidavit notes that the two Foundation Year source-code files examined by Carpenter, being CATable.js ("FY Table File") and CDAIEditor.js ("FY Editor File") were publicly available files, that Carpenter was able to access on 18 April 2007.
Left unstated in that the respective DAIS WebStable files CDAITable.js ("DAIS Table File") and CDAIEditor.js ("DAIS Editor File") remain publicly available files accessible at the locations: http://hradvantage.com.au/_script/CDAITable.js and http://www.hradvantage.com.au/_script/CDAIEditor.js.
74 It will be noticed in that the URL address had at least two components - the file location (eg www.dais.com.au/_script/admin-script/) and the file name (eg cdaitable.js). There is a question whether the file location, the file name, or both would be obvious to a competent programmer of reasonable experience such that he or she could have done what Mr Petro did, without his prior knowledge of such things from his employment with Dais. A passage of the cross-examination of Mr Carpenter (Dais's expert) ran as follows:
And it wouldn't be very difficult to guess even if you didn't know the file name to guess the type of file names that a particular client would use for editing tables or list?‑‑‑Respectfully, Mr Crowe, I would have trouble guessing the file names themselves. Where I would have success with is guessing what directory the files live under. There are standard names such as scripts or underscore script. I would be able to find that but given the variety of editors available or the editor may have been written in house. I would pat myself on the back if I was able to guess the file name.
So utilising the method you just suggested you could then go down a list of the sub files and find the likely one?‑‑‑Not for most websites. For security if I am trawling around and trying to visit specific directories a website will say I am not going to show the individual files. If I could guess the file name correctly it would open it but if I was just to type in scripts it would say virtual directory not allowing content displayed. It will not show me what files are in there for obvious security reasons. All good websites will have that in place. So I can't peruse the files for most websites. It would prevent a listing of the individual source code files.
Clearly Mr Carpenter would have no difficulty making an intelligent guess as to the directory - ie the location - of the file in question, but finding the file itself would be another matter. Mr Muys said that he had, without prompting or assistance from anyone, accessed and downloaded the table file and the editor file from the HR Advantage site simply by directing his browser to the following addresses: www.hradvantage.com.au/_script/CDAITable.js and www.hradvantage.com.au/_script/CDAIEditor.js. Under cross-examination, however, Mr Muys accepted that he already knew the file names and that it did not present a difficulty for someone as qualified as he to work out the path, intuitively as it were.
75 Using the location and names of the subject files, therefore, I consider that there would be some difficulty involved in a developer or programmer, not otherwise privy to the names of the files, securing access to the source code. However, it could be done. For someone who happened upon the files by chance, or who, having a working appreciation of the kind of generic names apparently used in such matters, was prepared to persevere by trial and error, the files, and therefore the codes, would have to be regarded as publicly available. If so, I do not think there would be any impropriety in a third party acquiring the relevant information. A person who leaves information in a place which, while concealed to a point, is nonetheless accessible to members of the public without breach of the law, cannot, in my estimation, be heard to assert that there was some impropriety in a stranger viewing and absorbing that information and using it to his or her own lawful advantage.
76 The other aspect under this heading relates to the nature of the subject files as JavaScript code. Each time the web site in question was opened in a browser, the JavaScript code was sent to the browser and, if the user were technically knowledgeable in relevant respects, he or she might have secured access to the code, and read it. The cross examination of Mr Carpenter by counsel for Mr Petro contains the following sequence of questions and answers:
You know as a programmer that if you create some JavaScript code it's all but impossible to protect it once it has gone out to a client who uses it in a website. It's almost impossible in those circumstances to restrict its use in terms of other programmers being able to access it and use that source code?‑‑‑There are some libraries and utilities available that can encrypt the JavaScript code; not widely used though.
No, but if you didn't use them you know it's really out there?‑‑‑Yes, that's correct.
Once it's gone to your client and your client is using it on a website the JavaScript code in particular is vulnerable to being able to be accessed and used by other programmers?‑‑‑As well as the HTML and other images - any other multimedia.
In his affidavit, Mr Muys said:
Budding web developers are routinely encouraged to experiment and learn the various client-side technologies involved, by reading, utilising and modifying other peoples source-code.
A JavaScript tutorial located at
http://www.tripod.lycos.com/build/better_builders/newsletters/news_8.html includes the following quote:
This first piece of advice is something you'll hear a lot from Webmonkeys: Examine the code. You'll be surprised what you can learn by simply studying a few lines of someone else's JavaScript. Remember, if you see something really cool on a Web page, you can always see how they did it. Just view source.
At http://ph.answers.yahoo.com/question/index?qid=20070607123346AAPRjiK Yahoo Answers' top voted answer to the question "Can anyone give me any info on how to get my own web site going." included the following:
If you see something you like on another web page, right-click and View Source to see how they did it.
The technical accuracy of this evidence was not challenged by Dais, and I accept it. It follows that I must find that any knowledgeable user of a web browser would be able to view the code for the two subject files by "right-clicking" and then selecting "view source".
77 I consider next how easy, or difficult, it would have been for Dais to recreate the table file and the editor file, or for an outsider such as Mr Petro to do so, as an alternative to copying them from the code of a Dais-built site. Mr Muys drew attention to what he described as "the marginal functionality provided by … [the table and editor files] over the default functionality provided by the web browser" and to "the ease with which alternative independent implementation could be obtained or developed". With respect to the table file, Mr Muys said that the file provided "aesthetic improvements, but not any fundamental or necessary functionality". Under cross-examination, he accepted that aesthetics were very important for an enterprise like Dais which was helping people "leverage" or develop their brands, and were an important part of the Dais business model. As to the matter of alternative implementation, Mr Muys said that there were numerous open-source program components that were available providing the same aesthetic improvements as achieved by the WebStable table file. He exhibited to his affidavit a similar file which found on the Internet in 15 minutes, using Google.
78 In his second affidavit, Mr Carpenter said that a web browser based text editor was "a common part of the source code for most CMS products". Mr Muys said that he was unaware of any "modern CMS product", proprietary or open-source, that did not provide a web browser based text editor. Under cross-examination, Mr Carpenter agreed that open-source text editors were readily available, but added a qualification as to the necessity for the developer to make sure that the file in question had a licence or was "released under public domain such that it could be used" He said:
… nobody owns any sort of rights to producing an editor file and that is the reason why there is a strong market with open source, commercial and other editors.
Mr Muys was cross-examined about the ease with which an open-source table file or editor file might be adapted for use in an existing CMS such as WebStable and built into the system. Commencing with the editor file, he said:
I would expect that to be a very straightforward operation. I would expect - because the editing function is quite separate it's a stage in the workflow process that the user is going through and therefore most editors tend to be very stand-alone as far as their interactions with the rest of the program so they are instantiated by the program, provided with information. When they can finish they're then provided information back. So having done that I would expect that would be a matter of probably only a couple of hours work to actually connect - to actually, you know, use the interface that that editor provided me to load the file and use that interface to extract the final content. With the table file, the table file because it is - because the table functionality is more close aligned with the actual display of information rather than just the direct editing and information that would probably require a little bit more work but I would be very surprised if it took me any more than half a day worth of modification in order to actually integrate a replacement table file and if I was fortunate to find a good table file online - on the Internet it could also likely only be a couple of hours.
If for some reason he had to write the code for a table file from scratch, Mr Muys said that the task would take "of the order of between two days and a week depending on the skill and level of the programmer who was providing it".
79 Mr Wood also gave evidence about these subjects. He said:
I have examined the JavaScript source code of both the Table and Editor Files in the DAIS Code. By a normal programmer's standard, these two files represent only a small amount of code. There really is not that much to them. They appear to already be at a very basic level. I think it would be hard to make these files simpler than what they already are. As they are so basic I do not see anything particularly clever in them. Anything that these source code files do can also be done by third-party products available on the Internet.
He said that it would be easy to replace the source code for the editor file with "a freely available component" that had the same or similar functionality. He gave an example of such a component, and where it might be found on the Internet. He described it as "a comprehensive and feature-rich product". After inspecting the table file, Mr Wood said it was not "a highly innovative or significant piece of source code". He expected that an IT graduate with three years of experience in JavaScript would be able "to generate this source code from scratch in under 24 man-hours including testing." Under cross-examination, Mr Wood said that such an estimate involved a degree of generosity towards the graduate: "Basically, if the graduate couldn't do it in that amount of time, I think he'd be out on the street again if he was on my project."
80 The question with which I am presently concerned relates to the table file and the editor file as such, not to their integration into WebStable. On the strength of the evidence referred to above, I am bound to find that these two files, or files substantially performing the same functions, could have been re-created from scratch by a developer of reasonable experience in about a week of normal work. Indeed, similar files might, and I would find probably could, be downloaded readily, freely and legally from open-source sites on the Internet. I do not, therefore, think that the files had any element of confidentiality about them by reason of the difficulty or expense associated with re-creating them or something similar.
81 Turning to the question whether the source code for the subject files was jealously guarded by Dais, there are, I consider, three relevant considerations. The first relates to the steps taken by Dais to make it clear to the developers employed by it that these files were confidential. That is relevant under the third element to which Gummow J referred in Smith Kline, and I shall turn to it presently.
82 The second consideration relates to the steps which Dais took, as between itself and its clients, to ensure that the files remained confidential. This aspect must be considered against an understanding that, when completed, a new web site will be loaded onto the client's server, located (in the case of highly sophisticated or well-resourced companies) at the premises of the client itself or (more usually) at the premises of the Internet service provider utilised by the client. The administrator in either case will have a user name and password by reference to which he or she will be able to access all the source code in the relevant CMS, including that in the table file and the editor file. In this context, the licence agreement which Dais extracts from its clients (see par 60 above) makes a deal of sense. I find that Dais goes to considerable lengths to ensure that strangers do not have access to the CMS in WebStable including, quite obviously, the source code. However, as mentioned above, I could not find that Dais's practices in relevant respects were the same when Mr Petro was employed as they were in April 2007 or that, if they were, that Mr Petro knew of them.
83 The third consideration relates to the specific steps which Dais might have taken, but did not take, to keep the relevant information confidential. Mr Muys noted that the code for the WebStable product which he viewed contained no copyright or other proprietary notice. By way of contrast, he referred to a project of which he was the lead maintainer, and which used 75 separate and distinct third-party components. In relation to that project, he gave the following evidence under cross examination:
Every source file in the project has a 30 to 50 line header that contains a synopsis of the licence, the copyright notice, the authorship, the list of modifications and who modified it. Where copyrights to different parts of the file are owned by different developers because they've developed them independently, it lists - it identifies which parts of the file are copyright to which individuals or which organisations and it contains a link to an external file in the top level of the project directory that contains the full text of the licences involved for the entire project.
With respect to the absence of any copyright or proprietary notice on the WebStable code, Mr Muys said in his affidavit, without objection:
This would suggest to me a lackadaisical attitude to the protection of copyright and proprietary information by DAIS and their employees.
84 Save with respect to the licence agreement which it executed with its clients (and subject to its dealings and communications with its own developers, a matter to which I shall turn presently), I could not find that Dais took any relevant steps to keep confidential the source code of the table file and the editor file. Of its nature, that code was intrinsically susceptible to inspection and appropriation by strangers. It seems that encryption may have been a technique by which Dais could have protected the security of these files, but, according to Mr Carpenter, that practice was uncommon. However, the absence of any copyright or proprietary endorsement on or in relation to the subject files shows that there was a step which might have been taken, and which, apparently, was commonly taken, but which Dais did not take. In these circumstances, and with reference particularly to the technology of client-side JavaScript code, I am disposed to give little weight to the protection which Dais secured for itself by the terms of the licence agreements into which it may have entered with its clients. In the nature of things, it is not a particular client, who had paid for the construction of a web site, that would be likely to appropriate source code on that web site for other purposes. If there were to be an unwanted appropriation, it would, I infer, most likely be done by a web developer, computer professional or well-informed amateur who had the purpose of building his or her own web site. In this setting, I could not find that Dais took any serious steps to protect the confidentiality of the files on which it sues in this proceeding.
85 As for the commercial value of the table file and the editor file, I accept, of course, that they are an integral part of WebStable, and that a Dais-built CMS - at least one that required the relevant functions - would not operate as intended without them. I am, however, concerned with the value of the two files as such. If Dais were minded to "sell" these files, how much might it expect to receive in return? There was no evidence of a market for such things, in which circumstances I must assume that a willing buyer would pay no more than it would cost him or her to build an equivalent product from scratch. Mr Muys' evidence was that "the ready availability of zero-cost alternatives" for the files would justify the conclusion that "the licence sale value" of them is "only marginally above $0". Mr Wood's evidence as to the value of the editor file is as I have set it out in par 79 above. In effect, his evidence was that the commercial value of that file was nothing. As to the table file, he said that he did not find it to be "a highly innovative or significant piece of source code". Based on the wages that would be required to be paid to a developer to re-create that file, his estimate of the value thereof was of the order of $1,680.
86 To an extent, the usages and practices of the industry in relevant respects are also illuminated by what I have written above. They do not support Dais's assertions of confidentiality. When he needed a table file in 2002, Mr Suthers commenced by downloading one from a site upon which he had worked in his previous employment. Dais was the beneficiary of that. Whether or not Mr Perlinski knew what was happening at that time, the fact is that Mr Suthers' actions demonstrated what appeared to be accepted by developers as a quite uncontroversial practice. Absent issues of copyright, and without begging the question now being considered, I cannot appreciate why it should be regarded otherwise.
87 I accept that the ability to view (and to copy) source code is a commonplace in the relevant technology, and the evidence of Mr Wood that trainee programmers are encouraged to exhibit curiosity about such matters. I accept the evidence led by Mr Petro that the endorsement of a copyright notice upon source code is a practice which is commonly resorted to, and that this practice removes such element of ambiguity as might otherwise surround the question of the entitlement of a stranger to copy or use the code. I also take into account the nature and function of the two subject files. They operate in the way of utilities: important and ever-available, but without involving anything particularly special or unique in their own right. In these respects the files are rather like the electrical wiring in a new house. There was nothing in the evidence to suggest that if these files became unavailable, other similar files would not do equally as well. The impression I gathered from the evidence as a whole is that programmers and developers in the industry regarded files of this kind much in the way of a generic resource required for a new web site, but one that could normally, and without impropriety, be downloaded from any available source.
88 For the above reasons, I cannot conclude that the source code for the table file or the editor file had the necessary quality of confidentiality about it within the terms of Gummow J's second element in Smith Kline.
89 Turning next to the third element - receipt of the information by the defendant in such circumstances as to import an obligation of confidence - Dais led no evidence that Mr Petro was told, orally or in writing, that the table file and the editor file were confidential, or the like. It is true that Dais procured him to execute a confidentiality agreement (to which I have referred in par 62 above) but that imposed no more specific an obligation than that Mr Petro should not use, disclose, etc confidential information as generically defined. In that sense the agreement begged the present question. Mr Suthers, to whom Mr Petro reported during the time that the table file and the editor file were under early development at Dais, was never told to keep the code for the two files confidential. To Mr Petro's observation, Mr Suthers obtained the initial version of the table file from a web site which he had built in a previous employment. These circumstances do not bespeak a working environment in which a requirement to keep the two files confidential was implicit. As I have said, no such requirement was ever made explicit.
90 I recognise, of course, that the very fact that Mr Petro first obtained an awareness of the table file and the editor file during the course of his employment is relevant to the third element of Gummow J. Nothing I have said in these reasons should be taken to deny the proposition that it might well have been a breach of Mr Petro's duty of good faith for him to have revealed to a competitor of Dais the code in these files while he remained in that employment: see Faccenda Chicken Limited v Fowler [1987] Ch 117, at 136-137. But the question with which I am concerned is whether information obtained by a person during his or her employment may, consistently with the equitable obligation of confidence, be used by the person after the employment has ended. The mere fact that the information was obtained during the employment is relevant in such a context, but is not determinative.
91 I do not consider that the circumstances in which Mr Petro received the details of the source code for the table file and the editor file were such as to import an obligation of confidence.
92 For the above reasons, I do not consider that Mr Petro was under an equitable obligation of confidence with respect to his knowledge of the existence, content and location of the source code for the table file and the editor file, or with respect to his use of that code for his own purposes.