Decor Corporation Pty Ltd (ACN 004 231 109) v Australian Housewares Pty Ltd & Ors [1998] FCA 1479 (26 October 1998)

Last Updated: 25 November 1998

FEDERAL COURT OF AUSTRALIA

DISCOVERY - Inspection - Confidentiality - Inspection sought by trade rival - Whether inspection to be restricted to legal advisers and independent experts.

Warner-Lambert Co v Glaxo Laboratories Ltd [1975] RPC 354 distinguished

Magellan Petroleum Australia Ltd v Sagasco Amadeus Pty Ltd (1993) 25 IPR 455 distinguished

Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34 considered

Mackay Sugar Co-operative Association Ltd v CSR Ltd (1996) 137 ALR 183 cited

Hadid v Lenfest Communications Inc (1996) 70 FCR 403 cited

THE DECOR CORPORATION PTY LTD (ACN 004 231 109) v AUSTRALIAN HOUSEWARES PTY LTD (ACN 072 364 277), RICHARD GRAHAM INCE and ANDREW EDWARD KINNEAR

VG 763 of 1996 [074]

SUNDBERG J

26 OCTOBER 1998

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 763 of 1996 [074]

BETWEEN:	THE DECOR CORPORATION PTY LTD (ACN 004 231 109) APPLICANT
AND:	AUSTRALIAN HOUSEWARES PTY LTD (ACN 072 364 277) FIRST RESPONDENT RICHARD GRAHAM INCE SECOND RESPONDENT ANDREW EDWARD KINNEAR THIRD RESPONDENT

JUDGE:	SUNDBERG J
DATE OF ORDER:	26 OCTOBER 1998
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. Inspection of the documents referred to in par 2 of the Schedule hereto be carried out in accordance with pars 3 to 13 thereof.

2. The respondents pay the applicants' taxed costs of the motion notice of which was filed on 15 July 1998.

3. There be liberty to apply in relation to the operation of the provisions of the Schedule.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

SCHEDULE

1. This Schedule is substituted for the Order of the Court made on 28 August 1998.

2. The exhibits referred to in affidavits filed or to be filed on behalf of the Applicant and each of the documents discovered or to be discovered by the Applicant and marked as "Confidential" ("the Applicant's Confidential Documents") or "Special Confidential" ("the Applicant's Special Confidential Documents") as the case may be and the exhibits referred to in affidavits filed or to be filed on behalf of the Respondents and each of the documents discovered or to be discovered by the Respondents and marked as "Confidential" ("the Respondent's Confidential Documents") or "Special Confidential" ("the Respondents' Special Confidential Documents"), be subject to the orders in paragraphs 3 to 13 hereof.

3. The Applicant's Confidential Documents, the contents thereof and information contained therein or information derived from or notes taken or reports or other documents generated therefrom including copies of such documents as may be made by any Respondent's counsel, solicitors and, subject to paragraph 9 below, any independent expert nominated by any Respondent ("the Applicant's Confidential Information") shall be confidential in this proceeding and they and all and any information contained in them:

(a) shall only be disclosed to -

(i) solicitors, counsel for the Respondents and the Respondents; and

(ii) subject to paragraph 9 below, any independent expert nominated by any Respondent,

each of whom shall be bound by this order, and shall not be open to public inspection whilst filed or used in this proceeding; and

(b) shall be used only for the limited purposes of this proceeding.

4. The Applicant's Special Confidential Documents, the contents thereof and information contained therein or information derived from or notes taken or reports or other documents generated therefrom including copies of such documents as may be made by any Respondent's counsel, solicitors and, subject to paragraph 9 below, any independent expert nominated by any Respondent ("the Applicant's Special Confidential Information"), shall be confidential to the Applicant in this proceeding and they and all and any information contained in them:

(a) shall only be disclosed to -

(i) solicitors and counsel for the Respondents; and

(ii) subject to paragraph 9 below, any independent expert nominated by any Respondent,

each of whom shall be bound by this order, and shall not be open to public inspection whilst filed or used in this proceeding; and

(b) shall be used only for the limited purposes of this proceeding.

5. The Respondent's Confidential Documents, the contents thereof and information contained therein or information derived from or notes taken or reports or other documents generated therefrom including copies of such documents as may be made by the Applicant's counsel, solicitors and, subject to paragraph 9 below, any independent expert nominated by the Applicant ("the Respondents' Confidential Information") shall be confidential in this proceeding and they and all and any information contained in them:

(a) shall only be disclosed to -

(i) solicitors and counsel for the Applicant and the Applicant; and

(ii) any independent expert nominated on behalf of the Applicant,

each of whom shall be bound by this order, and shall not be open to public inspection whilst filed or used in this proceeding; and

(b) shall be used only for the limited purposes of this proceeding.

6. The Respondents' Special Confidential Documents, the contents thereof and information contained therein or information derived from or notes taken or reports or other documents generated therefrom including copies of such documents as may be made by the Applicant's counsel, solicitors and, subject to paragraph 9 below, any independent expert nominated by the Applicant ("the Respondents' Special Confidential Information") shall be confidential to the Respondents in this proceeding and they and all and any information contained in them:

(a) shall only be disclosed to -

(i) solicitors and counsel for the Applicant; and

(ii) any independent expert nominated by the Applicant,

each of whom shall be bound by this order, and shall not be open to public inspection whilst filed or used in this proceeding; and

(b) shall be used only for the limited purposes of this proceeding.

7. The Applicant's Confidential Documents and the Respondents' Confidential Documents (together hereafter referred to as "the Confidential Documents") and the Applicant's Confidential Information and the Respondents' Confidential Information (together hereafter referred to as "the Confidential Information") shall be used, handled, kept and stored by counsel and solicitors of the opposite party or parties, any independent expert nominated by the opposite party or parties under this order, and the opposite party or parties subject to the following directions:

(a) one copy of each such document shall be provided to the opposite party;

(b) no more than six copies shall be made of each document so provided;

(c) the Confidential Documents and the Confidential Information shall be used, handled, kept and stored in such a manner as will at all times preserve their confidentiality;

(d) none of the Confidential Documents and none of the Confidential Information shall, without prior written consent of the Applicant or Respondents as the case may be, be disclosed to or inspected by any persons other than:

(i) counsel for the parties in this proceeding;

(ii) solicitors for the parties in this proceeding;

(iii) subject to paragraph 9 below, such nominated independent expert or experts as may be retained by and may act on behalf of the parties for the purposes of this proceeding;

(iv) in relation to the Applicant's Confidential Documents and the Applicant's Confidential Information, the Respondents; and

(v) in relation to the Respondents' Confidential Documents and the Respondents' Confidential Information, the Applicant.

8. The Applicant's Special Confidential Documents and the Respondents' Special Confidential Documents (together hereafter referred to as "the Special Confidential Documents") and the Applicant's Special Confidential Information and the Respondents' Special Confidential Information (together hereafter referred to as "the Special Confidential Information") shall be used, handled, kept and stored by counsel and solicitors of the opposite party or parties, any independent expert nominated on behalf of the opposite party or parties under this order, subject to the following directions:

(a) three copies of each such document shall be provided to the solicitors for the opposite party;

(b) no copies shall be made of any document so provided;

(c) the Special Confidential Documents and the Special Confidential Information shall be used, handled, kept and stored in such a manner as will at all times preserve their confidentiality;

(d) none of the Special Confidential Documents and none of the Special Confidential Information shall without prior written consent of the Applicant or Respondents as the case may be, be disclosed to or inspected by any persons other than:

(i) counsel for the parties in this proceeding;

(ii) solicitors for the parties in this proceeding;

(iii) subject to paragraph 9 below, such nominated independent expert or experts as may be retained by and may act on behalf of the parties for the purposes of this proceeding.

9. The Confidential Documents and the Special Confidential Documents and the Confidential Information and the Special Confidential Information shall not be disclosed to or inspected by any independent expert or experts nominated by any party unless the solicitors for each other party shall have been supplied in writing (at least three days before such Confidential Documents and Special Confidential Documents and the Confidential Information and the Special Confidential Information are to be disclosed to that independent expert) with -

(a) the name;

(b) the qualifications and affiliations of each independent expert; and

(c) a copy of an undertaking duly executed by each independent expert in the form of the Undertaking set out in the Annexure hereto,

and the original of each such undertaking shall have been filed in the Court.

10. No affidavit filed by or on behalf of the parties in this proceeding shall contain any of the Confidential Documents, Special Confidential Documents or Confidential Information or Special Confidential Information of the opposite party or parties (as the case may be) save in exhibits to such an affidavit marked "Confidential" or "Special Confidential" as the case may be, and each such exhibit shall be confidential to the Applicant or Respondents as the case may be, and shall not be used, inspected or disclosed except as provided in this Schedule.

11. Within 28 days of the final determination of this proceeding or any appeal therefrom and on the expiration of any applicable appeal period, the Applicant's solicitors shall take all necessary steps to retrieve from the Applicant, the Applicant's counsel and independent experts, all of the Respondents' Confidential Documents, Special Confidential Documents, the Respondents' Confidential Information and Special Confidential Information in their possession and shall deliver up to the Respondents' solicitors or the Respondents' agents appointed for that purpose, all of the Respondents' Confidential Documents, Special Confidential Documents, the Respondents' Confidential Information and Special Confidential Information other than such of those documents as constitute instructions to or opinions, reports, notes or memoranda of counsel, solicitors or nominated experts.

12. Within 28 days of the final determination of this proceeding or any appeal therefrom and on the expiration of any applicable appeal period, the Respondents' solicitors shall take all necessary steps to retrieve from the Respondents, the Respondents' counsel and the Respondent's independent experts, all of the Applicant's Confidential Documents, Special Confidential Documents, the Applicant's Confidential Information and Special Confidential Information and shall deliver up to the Applicant's solicitors or the Applicant's agents appointed for that purpose, all of the Applicant's Confidential Documents, Special Confidential Documents and the Applicant's Confidential Information and Special Confidential Information other than such of those documents as constitute instructions to or opinions, reports, notes or memoranda of counsel, solicitors or nominated experts.

13. Such part or parts of exhibit KKNM-2 to the affidavit of Kris Kimberley Neykoff Migios sworn 17 April 1998 filed on behalf of the Applicant as consist of drawings of product parts or of aspects of product parts shall be treated as a Special Confidential exhibit thereto and shall forthwith be marked as a Special Confidential Exhibit and served on the Respondents' solicitors accordingly.

Annexure

Undertaking

I, [name] of [address], [qualifications] do hereby acknowledge that I have read the Order dated [insert date of the Order to which this undertaking is scheduled] 1998, made in respect of the Confidential Documents and Confidential Information and the Special Confidential Documents and Special Confidential Information in the action VG 763 of 1996 [074] before the Federal Court of Australia ("these proceedings") and I HEREBY UNDERTAKE to the Court with respect to the Applicant's/Respondents' [delete inapplicable party] Confidential Documents and Special Confidential Documents and the Applicant's/Respondents' [delete inapplicable party] Confidential Information and Special Confidential Information that -

(i) I have provided the solicitors acting for the Applicant/Respondents [delete inapplicable party] with a true and complete statement in writing of my qualifications as an expert and my affiliations both past and present, and I have no affiliation and no other communication with:

(a) any party to this proceeding;

(b) any person or company involved in the manufacture or sale of plastic injection moulded products;

(c) the solicitors for the Applicant/Respondents [delete inapplicable party];

other than is stated in my statement.

(ii) I have received none of the Applicant's/Respondents' [delete inapplicable party] Confidential Documents or Special Confidential Documents or Confidential Information or Special Confidential Information prior to execution of this undertaking.

(iii) As to each of the Applicant's/Respondents' [delete inapplicable party] Confidential Documents and Special Confidential Documents and such of the Confidential Information and Special Confidential Information, as comes into my possession, the same shall be used only for the purposes of these proceedings, shall be kept confidential by me at all times, and will not be used by me or disclosed by me to the Applicant/Respondents [delete inapplicable party] or representatives of the Applicant/Respondents [delete inapplicable party] except as provided under the following paragraph.

(iv) As to each of the Confidential Documents and such of the Confidential Information and as comes into my possession, the same shall be used, handled, kept and stored by me in such manner as will keep the same at all times safe from disclosure except as may be required for me to advise the Applicant/Respondents [delete inapplicable party] and counsel, solicitors and other independent experts acting for the Applicant/Respondents [delete inapplicable party] herein or as may be required (but subject to any order for protection of the confidentiality of the same) in my giving evidence in the action.

(v) As to each of the Special Confidential Documents and such of the Special Confidential Information as comes into my possession, the same shall be used, handled, kept and stored by me in such manner as will keep the same at all times safe from disclosure except as may be required for me to advise counsel, solicitors and other independent experts acting for the Applicants/Respondents [delete inapplicable party] herein or as may be required (but subject to any order for protection of the confidentiality of the same) in my giving evidence in the action.

(vi) I will make no copy of the Applicant's/Respondents' [delete inapplicable party] Confidential Documents or Special Confidential Documents provided to me, save for the purpose of preparing an overlay drawing to an exhibit to an affidavit.

(vii) Within 7 days of receiving notice of the final determination of these proceedings, I shall deliver up to the Applicant/Respondents [delete inapplicable party] all Confidential Documents and Special Confidential Information in my possession.

Dated the day of 199[ ].

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Signature of Witness Signature

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Printed name of Witness Printed address of Witness

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 763 of 1996 [074]

BETWEEN:	the decor corporation pty ltd (acn 004 231 109) Applicant
AND:	australian housewares pty ltd (acn 072 364 277) First Respondent richard graham ince Second Respondent andrew edward kinnear Third Respondent

JUDGE:	SUNDBERG J
DATE:	26 october 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

SUNDBERG J

In its statement of claim the applicant ("Decor") alleges that it carries on the business of manufacturing, marketing and wholesale selling of plastic containers, and is the owner of the copyright in certain product drawings relating to containers comprising part of the Decor "Tellfresh" Storer System and certain tool drawings relating to those containers. It alleges that the respondents have infringed its copyright in those drawings by reproducing them or a substantial part of them. In the alternative it is alleged that the second and third respondents ("Mr Ince" and "Mr Kinnear"), the directors of the first respondent ("Housewares"), have authorised, aided, abetted, counselled, procured and induced Housewares to infringe the copyright. Decor seeks injunctions, and damages or an account of profits.

Decor's evidence on the question of liability includes affidavits sworn by Messrs Migios, Varley, Boyd and Carlson. Mr Migios is a design architect whose company has been engaged by Decor to prepare data in relation to the dimensions of various Decor tool drawings and create overlay drawings of Decor's and Houseware's product drawings. Exhibited to his affidavit are a number of documents marked "Special Confidential". They include Decor tool drawings, tool drawing printouts, a chart containing Mr Migios' measurements, and his overlay drawings. Mr Varley is a mechanical engineer whose company has been engaged by Decor to measure particular dimensions of the Tellfresh products. Exhibited to his affidavit and marked "Special Confidential" are product drawings received from Decor's solicitors, charts recording the dimensions of Decor's products, and two photographs. Mr Carlson is a product designer whose company has frequently been engaged by Decor to design products. Exhibited to his affidavit and marked "Special Confidential" are product drawings for certain of Decor's products and Tellfresh concept drawings. Mr Boyd is Decor's technical manager. Exhibited to his affidavits and marked "Special Confidential" are charts recording the dimensions of Decor's and Houseware's products, documents recording his comparison of the dimensions of Decor's and Houseware's products, and Decor tool drawings.

In a later affidavit Mr Boyd refers to the abovementioned affidavits and deals in turn with the "Special Confidential" documents under the headings Product Drawings and Concept Drawings, Tool Drawings, and Charts and documents recording dimensions. He says that the product drawings in particular contain technical information concerning the design of particular products, and often include a great number of specific dimensions. Information contained in a product drawing is essential for the preparation of tool drawings which are then used to manufacture tools which are necessary to make the product depicted in the product drawing. The detail contained in product drawings makes them extremely valuable, particularly to persons who wish to copy the product in the drawing or construct a tool to produce it. Mr Boyd says nothing specific about concept drawings. He states that tool drawings depict the tool or components of the tool used to manufacture a product shown in the relevant product drawings. Tool drawings represent a valuable resource for anyone wanting to make that product. In addition to the information tool drawings contain about the products to which they relate, the drawings contain valuable technical information about the tool itself. Where product and tool drawings are drawn to scale, it is possible to obtain dimensions for specific features depicted in them by measuring from the drawings themselves, even though the drawings do not contain precise dimensions. Features of product and tool drawings must be dimensioned in order to produce those drawings. The fact that dimensions are not recorded on the face of a drawing does not mean that those features have not been dimensioned. Thus even product and concept drawings which do not record detailed dimensions contain confidential information since important precise dimensions can be derived from them. Mr Boyd says that charts and documents recording dimensions obtained from drawings and other materials are confidential for the same reason as the dimensions themselves. On behalf of Decor, Mr Boyd seeks an order that the Special Confidential documents not be disclosed to any person other than counsel, solicitors and independent experts retained by the respondents. Mr Boyd fears that if those documents were to be supplied to the respondents themselves, they would have access to the very confidential information they have sought to obtain through the process of reverse engineering described in the affidavit of another of Decor's experts, Mr Petschel, a consulting engineer. Mr Boyd is concerned that further disclosure of the information carries the risk that the confidential information will be used or disclosed in a manner which will cause damage to Decor's business.

In an affidavit in response to the above material, Mr Ince complains that Decor's affidavits do not make much sense to him because he does not have access to the confidential exhibits. He says that he requires access to product, design, tool, section and part drawings the copyright in which the respondents are alleged to have infringed; overlay drawings which compare the parties' respective products; charts of measurements comparing Houseware's products with Decor's products or drawings; and photographs of various aspects of the parties' products. He then sets out in respect of each Special Confidential document the reason access to it is required. (I note in passing that Mr Ince wrongly describes two exhibits as "Special Confidential" when they are in fact "Confidential" and thus not sought to be excluded from inspection by the respondents.) Mr Ince states that he has been employed in the plastics industry for twelve years and Mr Kinnear for thirteen years. He says that he and Mr Kinnear intend to defend the proceeding in reliance on their own skill and knowledge. They do not propose at present to engage an expert to assist them. They believe they are capable of investigating Decor's drawings themselves. Mr Ince believes the respondents' solicitors will not be able to understand and interpret the exhibits without assistance. In addition, the respondents need to conserve their resources "by limiting and possibly excluding the involvement of an expert". Mr Ince expresses the opinion that unless the respondents are given access to the documents they will not be able to defend themselves "as they wish and need to do".

On the basis of the above material, on 28 August 1998 Registrar Efthim made an order in substantially the form sought by Decor. It was apparently intended as a "holding" order until the matter could be considered by a judge. The order was expressed to be "subject to further order", and liberty to apply was reserved. When the matter came before me it proceeded on the basis that Decor had to justify the Registrar's order. Further material was filed by the parties which can be summarised as follows. Mr Petschel expresses the view that in order to determine whether differences between one drawing and another amount to substantial differences made as a result of design input, one would have to be competent to create the drawings. He agrees with the secrecy concerns expressed by Mr Boyd. He adds that information disclosed by the drawings, once in the mind of a person such as Mr Ince or Mr Kinnear, cannot be erased, and that that is especially so if the information solves a problem which that person has. There is an inevitable risk that the recipient will use the information, even if only by accident or unintentionally. Mr Jordan, the respondents' solicitor, refers to a number of the documents and says that unless the respondents can examine them they will be unable adequately to instruct him. Mr Ince has sworn a further affidavit dealing with his and Mr Kinnear's expertise in the plastics area. Mr Ince has acted as a buyer of plastic products for Safeway and Target. In 1987 he joined Ross Plastics Pty Ltd, a company involved in the production of plastic housewares. While there he learnt a considerable amount about the technical aspects of the plastics industry. He was involved in the production of products by both blow and injection moulding, and in product design and development and the commissioning of all toolings. He reviewed all toolings and product drawings, attended toolmakers' premises to review toolings in production, and authorised amendments to them. Mr Ince said that Mr Kinnear had been the operations manager and later production manager of Ross Plastics. He repeated that he and Mr Kinnear are capable of understanding the documents in question and properly instructing their solicitors, and said that Housewares does not have the resources to employ experts to the extent that would be necessary to instruct solicitors to prepare an adequate defence.

Mr Gordon, Decor's manufacturing director, has sworn an affidavit in which he affirms Mr Boyd's fears about disclosure of the documents to the respondents. If the product and concept drawings are disclosed, the respondents will be armed with the very information Decor believes they have tried to copy. If the tool drawings are disclosed they will be armed with valuable technical information about the Tellfresh products and the tools to make them. The charts and documents recording dimensions are confidential to Decor because they record dimensions in or derived from other confidential sources. The comparative dimension documents are confidential as they would give the respondents access to the optimal dimensions they have sought to obtain though the process of reverse engineering. The photographs will enable the respondents to determine dimensions for the Tellfresh products.

The above material discloses that Decor and Housewares are competitors in the plastics homewares market. Although Decor's deponents use the word "confidential" in relation to the documents and information in them, it is clear that what Decor seeks to protect are its trade secrets. This attracts the Court's jurisdiction to restrict access to discovered documents, for example, to a party's legal advisers, nominated officers and independent experts. See Warner-Lambert Co v Glaxo Laboratories Ltd [1975] RPC 354, Magellan Petroleum Australia Ltd v Sagasco Amadeus Pty Ltd (1993) 25 IPR 455, Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, Mackay Sugar Co-operative Association Ltd v CSR Ltd (1996) 137 ALR 183 and Hadid v Lenfest Communications Inc (1996) 70 FCR 403. In Warner-Lambert at 360 Buckley LJ, with whom Russell and Orr LJJ agreed, accepted that facts disclosed to a litigant's advisers should normally be available to the litigant himself, and that strong grounds are required before the principal will be denied knowledge which his agents have properly acquired on his behalf. But this principle must be subject to some modification if trade secrets are to be protected from disclosure to possible competitors. His Lordship continued:

Where a matter in question in an action, being that matter upon which inspection or disclosure will throw light, is of a technical nature, the party seeking discovery may well require inspection by, or disclosure to, technical and professional advisers. If the matter be of a kind on which the party will be likely to be able with the aid of those advisers to form some kind of view of his own, it seems to me that he should normally be allowed to know as much about the facts as his advisers. If, however, the case were one of so esoterically technical a character that even with the help of his expert advisers the party himself could really form no view of his own upon the matter in question but would be bound to act merely upon advice on the technical aspects, disclosure to him of the facts underlying the advice might serve little or no useful purpose. In such a case a court might well be justified in directing disclosure of allegedly secret material only to expert or professional agents of the party seeking discovery on terms that they should not, without further order, pass on any information so obtained to the party himself or anyone else, but should merely advise him in the light of the information so obtained. ... Even where the information is of a kind the significance of which the party would himself be able to understand, it may nevertheless be just to exclude him, at any rate during the interlocutory stages of the action, from knowing it if he is a trade competitor of his opponent.

In Mobil Oil at 38 Hayne JA, with whom Winneke P and Phillips JA agreed, said:

Once the documents are inspected by the principals of the trade rival the information which is revealed is known to the trade rival and cannot be forgotten. Confidentiality is destroyed once and for all (at least so far as the particular trade rival is concerned). To say that the trade rival is bound not to use the documents except for the purposes of the action concerned is, in a case such as this, to impose upon that trade rival an obligation that is impossible of performance by him and impossible of enforcement by the party whose secrets have been revealed.

His Honour observed that while a party is usually entitled to inspect the documents of an opposite party whether himself or by his servants or agents, in trade secret cases it is common for material to be made available only to the legal advisers of the parties and nominated experts in order that a legitimate claim to confidentiality not be destroyed. His Honour continued (at 40):

Of course such arrangements bring with them their own difficulties and are arrangements that should be adopted only where there is a need to do so; of course they are arrangements that may need to be reviewed as the matter progresses towards trial or as the trial itself proceeds. But they are arrangements that are made and should be made when doing so would strike a fair balance between the competing interests of the party seeking inspection and the party claiming confidentiality. No more specific rules can be laid down - each case will fall for determination according to its own facts. In particular the nature and the content of the disputed documents is a matter that will usually, if not invariably, be of great importance in forming a conclusion ....

I have examined the documents in question. I am satisfied that the drawings (including the concept drawings), charts and comparison documents contain trade secrets. I have been unable from looking at the two photographs to form my own view about them, but I accept Mr Gordon's evidence that they would enable Homewares to determine the dimensions of the Tellfresh products. I accept that the fears expressed by Messrs Boyd, Petschel and Gordon are well-founded. Those deponents were not cross-examined.

Two related matters were relied on by the respondents in opposition to an order that the documents be disclosed only to their legal advisers and independent experts: the respondents' intention to rely on the expertise of Messrs Ince and Kinnear and not to retain an independent expert, and their inability to afford to retain an independent expert. I accept that this is not a case of the type mentioned in Warner-Lambert where Messrs Ince and Kinnear would not be able to understand the confidential material. But I am not persuaded that the respondents will be able to conduct their case without the assistance of an expert. On the material filed thus far neither Mr Ince nor Mr Kinnear is qualified to give expert evidence about the Decor drawings. I accept Mr Petschel's evidence that in order to determine whether differences between one drawing and another amount to substantial differences made as a result of design input, one needs to be competent to create such drawings. On the evidence filed neither director has that competence. Neither has any technical training or qualifications as a draftsman. In this connection it is relevant to note that the product drawings for Housewares' products that are alleged to have been copied from Decor products were not created by Mr Ince or Mr Kinnear, but by a draftsman retained by Housewares. Quite apart from the lack of relevant expertise of Messrs Ince and Kinnear , I would be surprised if the respondents' solicitors were to advise them that it was prudent to put forward as experts on the issue of substantial similarity only the persons who are alleged to have been involved in the infringement of the copyright in question. Further, Mr Ince does not rule out the engagement of an expert. The respondents do not intend to employ one "at present".

The material as to the resources of the respondents to employ an expert is thin. All that is said is that Housewares does not have the resources to employ experts to the extent that would be necessary to instruct solicitors to prepare an adequate defence. The company's financial position is not disclosed, and nothing is said about the resources of or available to Messrs Ince and Kinnear. In any event, if the respondents are successful in their defence, they will recover from Decor the cost of retaining their independent expert.

The respondents drew attention to trade secret cases in which inspection has been made available to a nominated representative of a party as well as to the party's legal advisers and independent experts. See, for example, Warner-Lambert and Magellan Petroleum. But in those cases the party whose representative was permitted to inspect the documents was a large corporation with many employees. In such a case it is realistic to expect that disclosure of documents to a chief executive or the director responsible for the litigation on terms which prevent him communicating it to those at the relevant research or operating level will not destroy the confidentiality of the documents. But in the present case disclosure to Messrs Ince and Kinnear is disclosure to the whole of Homewares. They are its only two operatives. The observations of Hayne JA about the destruction of confidentiality and the impossibility of putting trade secrets out of one's mind are particularly apposite in such a situation.

As was said in Warner-Lambert and Mobil Oil, each case must depend on its own facts. For the reasons I have given, I am not satisfied that the matters relied on by the respondents outweigh the well-founded fear Decor has about disclosing its trade secrets to a competitor who, it believes, has already attempted by reverse engineering to copy its drawings. Mr Petschel has sworn an affidavit which supports this belief. Of course I express no opinion on the reverse engineering issue. I simply note that Decor's case on reverse engineering goes beyond belief or suspicion. Having considered all the factors relied on each way, I am satisfied that the balance falls in favour of making the order sought by Decor. If so advised the respondents can apply later to extend the range of persons to whom access to the documents should be granted. Cf Warner-Lambert at 358 and Mobil Oil at 40.

I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg

Associate:

Dated: 26 October 1998

Counsel for the Applicant:	P Collinson
Solicitors for the Applicant:	Arthur Robinson & Hedderwicks
Counsel for the Respondents:	C Golvan
Solicitors for the Respondents:	Davies Collison Cave
Date of Hearing:	9 October 1998