what happens when intellectual property is used by an employee?

Employees often sign confidentiality and intellectual property (“IP”) agreements with their employers, with the intention of protecting a company from the theft of intellectual property. In cases where the theft of IP has associated damages the employee may not be liable for said damages even if they concede that they were in breach through their actions.

 

In APT Technology Pty Ltd v Aladesaye [2016] FCA 203, Mr. Aladesaye had been conducting a separate business while employed by APT Technology. The employee was using his position at APT in order to acquire client information and other pieces of IP for personal gain. At trial the employee stated that he was in breach of his employment contract through the creation of a rival business and the use of confidential information.

 

The Court ordered an injunction, using the “spring-board” principle, restraining future business on the basis that a person cannot use information given in confidence as a “spring-board” for activities that would be detrimental to the other party. However, damages were not available as the Court could not see Mr. Aladesaye’s activities as the main reason clients ending business with APT. Clients stopped using a company’s services for a multitude of reasons, the case for the link between Mr. Aladesaye’s actions and the business loss being too weak to award damages.

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