The intellectual property of a business can be one of its most valuable assets, which is why it is imperative that a former employee is not allowed to misappropriate confidential information in copyrighted works to set up a competing business.

The case of Verix Pty Ltd (formerly known as PGA Laminating) (Verix) v Williams [2021] FCA 748 considered whether an employee would be liable for misusing the confidential information and intellectual property of his employer. Verix is a company that provides film packaging products to manufacturers in the food industry, and Williams, one of its employees, had extensive access to Verix’s confidential information about its customers. During his employment, Williams developed and designed a new business to compete with Verix by exploiting commercially sensitive material during the course of his employment.

The court found that Williams employment contract terms were partly written, partly oral, and partly implied which made it difficult to determine the extent of his obligations as an employee. However, the court did find that he had breached a number of his contractual and fiduciary duties. Williams was found to have breached the statutory duties in sections 182-183 of the Corporations Act not to improperly use his position and not to improperly use information obtained by reason of his position. He also breached his equitable duty of confidentiality, and he infringed Verix’s copyright.

Overall, this case demonstrates the trouble that can be caused when confidential business information is not adequately protected. Some of the best ways to protect intellectual property and confidential information include ensuring that written contracts contain comprehensive clauses surrounding the use of that information and ensuring that access to confidential information is appropriately restricted and that adequate security systems are in place.

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