Consideration
30 It is convenient to commence with the aspect of the interlocutory application that concerns the reproduction of images in respect of which New Aim claims copyright. In my view, in respect of this part of the case, at least, there is a strong prima facie case of copyright infringement based on the evidence currently before the Court. The evidence relied on by New Aim on the present application strongly suggests that its images have been reproduced by Broers and Sun Yee International.
31 It is true that, when one compares the images in the left-hand and right-hand columns of annexure "FL-10", in some cases, the images look quite different. For example, in item 14, the image on the left is an empty chest with a bare background, while the image on the right is a chest filled with toys and with a garden background. However, according to the current evidence, a close examination of the images establishes that the image of the chest on the right is a reproduction of the image on the left.
32 On the present application, the respondents did not seek to refute the evidence that New Aim's images had been reproduced in Broers and Sun Yee International's marketing material.
33 In my view, the balance of convenience favours the grant of an interlocutory injunction to restrain the further reproduction, publication or communication to the public of the relevant images. I do not consider the undertaking offered by the respondents in this regard to go far enough. It is expressed in general and vague terms. In light of the conduct that has occurred, I consider it appropriate that an injunction be granted.
34 I turn now to consider the aspect of the interlocutory application that concerns the use of information that is said to be confidential. As indicated earlier, the information that is said to be confidential is not just the identity and details of the relevant suppliers; it is the identity and details of the relevant suppliers together with the fact that they have proven to be reliable suppliers of high quality products which are suitable for the Australian market.
35 Mr Lam states in his first affidavit that New Aim "treats the identity of its suppliers as highly valuable and proprietary and does not disclose the identity of its suppliers (including to customers)". Mr Lam explains the reasons for this at paragraphs 27, 36 and 37 of his first affidavit. I refer also to paragraphs 29 to 35 of that affidavit, in which Mr Lam describes the detailed and time-consuming process involved in identifying and vetting suppliers. There is evidence before the Court that New Aim has internal controls to limit access to supplier details within the company. There is also evidence, albeit contested, that New Aim ensures that those employees who do have access to the information are aware of the need to treat it as confidential: see Mr Lam's first affidavit, paragraph 38; but compare Mr Leung's first affidavit at paragraphs 9, 14 and 21 to 23.
36 On the basis of the evidence currently before the Court, I am satisfied that New Aim has a prima facie case that the first three respondents have breached their obligations under s 183 of the Corporations Act and their equitable obligations of confidence. It is unnecessary for present purposes to consider the breach of contract claim. I am also satisfied that New Aim has a prima facie case that Broers and Sun Yee International have breached equitable obligations of confidence. The identities and details of New Aim's suppliers, and their status as reliable suppliers of high quality goods suitable for the Australian market, have the hallmarks of confidential information: see, eg, Thomas Marshall (Exports) Ltd v Guinle [1979] 1 Ch 227 at 246, 248. It is difficult at this stage to assess the strength of the prima facie case, particularly because some of the factual matters are contested. However, I think it is fair to say that the prima facie case is not a weak one.
37 In relation to the balance of convenience, I proceed on the assumption that the grant of an interlocutory injunction is likely to have a significant financial effect on the respondents. It may be assumed that Broers and Sun Yee International have ordered significant quantities of the relevant goods with a view to selling those goods online and that they have employment obligations. However, I note that New Aim has offered to give the usual undertaking as to damages and that it is a very substantial company. There is no reason to think that it would not be able to satisfy any order that it pay compensation pursuant to the undertaking as to damages.
38 To my mind, an important factor that suggests that the balance of convenience favours the grant of an interlocutory injunction is that, if an injunction is not granted and the relevant information is disclosed, the confidential nature of the information (assuming New Aim's contentions are correct) will be lost. The evidence suggests that there has already been some disclosure of the information said to be confidential to (at least) Broers.
39 Another potentially relevant matter is the difficulty of quantifying the loss or damage. The parties made submissions about the difficulties of quantification: (a) in the event that an injunction is granted and New Aim is ultimately unsuccessful; and (b) in the event that an injunction is not granted and New Aim is ultimately successful. While I accept that there would be difficulties in each of these scenarios, to my mind the most telling factor is the difficulty of quantification of damages in the event that there is further disclosure of the confidential information (assuming New Aim's contentions are correct). If the confidential quality of the information were lost, it would be very difficult, if not impossible, to quantify the damage suffered by New Aim.
40 In my view, having regard to the matters discussed above and the circumstances of the case generally, the balance of convenience favours the grant of an interlocutory injunction to restrain the use of the information that is said to be confidential. However, I consider that some adjustments should be made to the form of orders proposed by New Aim.
41 I have set out above the form of orders proposed by New Aim in its revised draft order provided on 12 October 2021. In the course of the hearing, I raised with counsel some possible changes to the wording of the proposed injunction. On further reflection, I do not consider the changes I proposed to be desirable, as I consider that they may introduce a lack of clarity as to the scope of the injunction.
42 Having given the matter further reflection, and subject to any further submissions the parties may wish to make as to the form of the order, I consider that it would be desirable to make the following changes to the draft order proposed by New Aim.
43 First, I propose to change the label for the defined expression to "New Aim Supplier Information". This is a neutral expression which reflects the fact that whether or not the information is confidential is contested. Further, I consider it appropriate to define the suppliers of New Aim by reference to a particular point in time (or times). For example, if New Aim has commenced using a new supplier since the first three respondents left employment with New Aim, that supplier should not be covered. The first three respondents left at different points in time, namely January 2021, March 2021 and July 2021. Accordingly, I consider that the definition should refer to suppliers who were suppliers to New Aim at any of those three times. The definition would therefore read as follows:
1. In this order, New Aim Supplier Information means the identity and/or contact details of persons who were suppliers of products to the applicant (New Aim) (save for the supplier of the outdoor heating products sold by New Aim under the Devanti brand) as at January 2021, March 2021 or July 2021.
44 Secondly, I consider that, for the sake of clarity, there should be a separation between the part of the injunction that refers to reproducing and disclosing (on the one hand) and using (on the other). Also, I consider that the injunction should be limited to New Aim's product range as it stood at the points in time when each of the first three respondents left employment at New Aim. Accordingly, I propose that the relevant part of the injunction read as follows:
2. Subject to further order, until the hearing and determination of the proceeding, the respondents, whether by themselves, their officers (in the case of the fourth and fifth respondents), their employees or agents or otherwise howsoever, be restrained from, without the licence or authority of New Aim:
(a) reproducing or disclosing to any third party the New Aim Supplier Information;
(b) using in any manner whatsoever the New Aim Supplier Information, including by:
(i) procuring from suppliers to New Aim products that are the same (or substantially the same) as products in the New Aim product range as it stood at January 2021, March 2021 or July 2021; or
(ii) promoting or selling such products; …
45 In the course of the hearing, counsel for the respondents submitted that the injunction should be limited to the 18 suppliers that had been identified in New Aim's evidence. I do not consider it appropriate for the injunction to be so limited. The evidence suggests a pattern of conduct by the respondents. The logic of granting the injunction extends to other suppliers beyond the 18 suppliers. If Mr Leung is unsure whether a particular supplier (whose details are stored in his mobile telephone) is a supplier to New Aim, this could be clarified by his solicitors asking the solicitors for New Aim.
46 Another matter that was the subject of discussion at the hearing was the use of the words "substantially the same". Counsel for the respondents submitted that those words were unclear. The reason I have used these words is to cover the situation where essentially the same product is procured from a supplier to New Aim, save that the product is branded differently. With this explanation, I consider that the words are sufficiently clear. If there is doubt about the matter, it can be raised with the Court. I will include an order that there be liberty to apply.
47 I will discuss the form of orders that I propose with counsel after concluding these reasons. I will also check whether New Aim is prepared to give the usual undertaking as to damages with respect to an injunction in this form.