Plaintiff v Defendants

Supreme Court of Victoria|2009-07-14|Before: BYRNE J

INJUNCTION - interlocutory injunction - breach of confidence - idea to ensure that particular website is returned on first page of Google search - whether novel idea - whether the idea communicated to defendant - whether serious issue for trial - balance of convenience

1 The plaintiff, Websyte Corporation Pty Ltd is an online advertising company which owns a large number of websites including one which is a guide to local businesses.

2 In about October 2008 it developed a new marketing strategy to attract customers to its websites, this was to offer them a Google first page guarantee. The affect of the performance of such a guarantee was that customers' businesses would be listed on the first page of a search upon Google.

3 The development of this strategy, which is said to have occupied some eight months' work, was a novel idea which Websyte is using for its commercial profit.

4 This proceeding is predicated upon Websyte's allegation that the second named defendant, Linda Brown and the third named defendant, Violet Arvanitis, who were engaged by Websyte as sales representatives, had, since leaving Websyte, obtained similar positions with a competitor, the first named defendant, Virtual Map Australia Pty Ltd. It is alleged they disclosed to Virtual Map this idea and how it was achieved in circumstances which amounted to an actionable breach of confidence.

5 Last week in the Practice Court I granted an interim injunction restraining Virtual Map and the other defendants from exploiting the idea. This is the return of a summons for interlocutory injunction.

6 There was little if any dispute before me as to the ingredients of the cause of action asserted by Websyte. It had to establish, to the relevant degree, that the idea was sufficiently novel or developed to warrant protection, that it was confidential in the sense of being relatively secret, that it was communicated to the defendant sales people in circumstances importing an obligation of confidence, and that it was disclosed in breach of that obligation. Most of these components were put in issue before me.

7 This is, of course, an application for interlocutory relief. I am concerned at this level only to determine whether there is a serious issue to be tried as to these ingredients. If so satisfied I must consider whether the granting or refusal of the injunction sought, pending trial, would carry a lower risk of injustice.

8 The well-known Google site provides those who visit a powerful search engine for finding other websites, including those of small businesses throughout the world. For a business wishing to bring itself to the attention of searchers, there is a considerable advantage in being included in the first ten hits of a search response, that is on the first page. The challenge for those who are concerned to promote their customer's business is to discover how to put their customer's business on this first Google search engine results page.

9 This is an exercise which has for some time occupied the minds of companies such as the plaintiff, Websyte. The difficulty was to understand the features on a website upon which a Google search engine would fasten to select its first ten hits, and to design a website for its own customers which contained these features.

10 Paul Meyers, the director of Websyte, claims to have identified these features in or about February 2008 and his company offers this service to its customers for a fee. I will not describe the five features which he lists in paragraph 24 of his affidavit sworn on 3 July 2009. It is sufficient that it includes the prominent use of certain keywords on the customer's URL in the domain name or the subdomain name, and elsewhere on the customer's website - keywords setting out the customer's location and business type.

11 There was debate before me as to whether there was sufficient novelty in the idea to warrant protection from unauthorised use. It is true that the use of keywords in the URL has been proposed as a means of increasing the visibility of a website to search engines for some time. I was provided with an article published in April 2007 in which this practice was said to be in use in the United States. The idea promoted by Mr Meyers was to couple this practice with other uses of the keywords on the website and he claimed considerable success for this.

12 Against this, I was referred to a large number of examples where keywords were found on URLs before the suggested creation of the website novel idea. Geoffrey Jian Gang Zhou, the managing director of Virtual Map, said that between July 2006 and April 2009, his company had created 23 sites incorporating keywords in the subdomain within the URL. The significance of this number is considerably diminished, however, when it appears that many of the sites were related and, further, that in many of them, the inclusion was the product of a suggestion from the customer rather than from Virtual Map.

13 This, however, does not dispose of this issue. The content of the URL, although important for the Websyte strategy, was only one of the five features which comprise Mr Myer's idea. It is the juxtaposition of all of these features which is significant.

14 I am satisfied that there is a serious issue to be tried as to the novelty of Mr Myer's idea being significant, sufficient to warrant protection.

15 I pause to record that Ms Brown joined the Websyte organisation as a sales representative in February 2009. She left on or about 15 June 2009. There was evidence as to circumstances in which she left which it is not necessary that I resolve. Ms Arvanitis commenced work with Websyte in a similar capacity on 1 June 2009 and she finished on 18 June. Both women took a position as sales consultant with Virtual Map who, as I have mentioned, was a competitor of Websyte.

16 Websyte contends that one or other of both of these women took with them to Virtual Map the know-how to construct a website which would achieve Google first page results. They deny this. They say they had no knowledge of this and were not given information by Websyte as to this aspect of the business.

17 Websyte sought to raise an issue as to this by pointing to the coincidence of the changes in the Virtual Map optimised websites which occurred about the time the two women joined. An essential feature of the Websyte strategy was the inclusion of the keywords in the URL. Counsel for Websyte were able to point to very few new Virtual Map websites at this time which contained this feature.

18 If this hypothesis were corrected, a more dramatic and extensive change might have been expected to be shown. In fact, when the 18 June Virtual Map websites are examined and compared with those after that date, the inference becomes less and less persuasive.

19 As to the confidential nature of the communication of the Google page one idea to Ms Brown and Ms Arvanitis, this aspect of the case suffers from the same infirmity.

20 The next requirement is that the sales representative communicated the idea to the new company in breach of an obligation of confidentiality. They deny this. The evidence supporting the Websyte inference as to this is fragile.

21 I conclude from this that there is an issue to be tried but on the material before me could scarcely be categorised as a serious one.

22 In any event I accept the submission put upon behalf of Virtual Map that the balance of convenience is against the granting of the injunction.

23 Although any injunction would not run for long, the impact on the business of Virtual Map would be considerable. The injunction itself is difficult to formulate in a way which would protect the commercial activities of Virtual Map of which no complaint here is made.

24 In such a case as this, damages are the usual remedy and I can see no reason to depart from this.

25 If, in the weeks to judgment, Virtual Map creates websites which are found to have breached the rights of Websyte, the profits from this can be identified. Moreover, in a competitive market such as this it would be unfair to require it to compete at such a disadvantage if it should hereafter appear that it is not in breach.

26 Weighing these matters and in the context of a triable issue, I am of the opinion that the risk of injustice is less if the injunction is not granted.

28 I will order, therefore, that the application be dismissed with costs, including reserved costs, and that the injunction made on 6 July be discharged forthwith.

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