A recent Australian Federal Court Decision on Design Registrations which reversed an initial decision by the Registrar of Designs has shed light on the issue of confidential disclosures by email.
On 16 February 2015, Sun-Wizard filed a request under s63 for the Registrar to examine the registered design. In an initial decision dated 17 October 2017, the Registrar’s delegate found that the communication of a pre-release data sheet in an email sent on 3 May 2010 to a third party had the effect of publishing the design prior to its 7 June 2010 filing date resulting in it not being new and distinctive.
In the Appeal, Key Logic contended that the Registered Design was not “published” by the transmission of the emails. Key Logic agreed that the designs sent in the 3 May 2010 email and an earlier 21 April 2010 email included representations of the registered design (a solar bollard). These emails had been sent by Mr Arieni, who was the designer and director of Exlites (the previous owner of the registered design). However, Key Logic argued that Mr Palfrey and some of the other Exlites associates (part of the Certified Installers Network) who received the emails did not receive the emails in their capacity as members of the public. Instead, it was deemed that Mr Palfrey and the other email recipients received the email in their capacity as members of a group with a special commercial relationship or prospective commercial relationship with Exlites which gave rise to an obligation of confidence and that the confidentiality of the disclosure of the Registered Design to Mr Palfrey and other Exlite Associates was subject to that obligation.
During the proceedings, Key Logic carried the onus of demonstrating the obligation of confidence. In his evidence, Mr Arieni stated that it was his idea to create a network of “resellers with whom Exlites would work closely to promote the Exlites brand”. One of the other issues in the proceeding was whether any member of the CI Network had entered into a confidentiality agreement with Mr Arieni or Exlites before, after or around the time of the emails being sent. In this regard, Mr Arieni’s gave evidence that the members of the CI Network had each signed such an agreement but was unable to locate any of those agreements.
Contrary to the initial decision by the Registrar, Greenwood J accepted that the information in these emails was inherently confidential and the emails were sent to a cohort of individuals who had joined the Certified Installers Network entitling them to financial advantages and in circumstances where there was an obligation to maintain that confidence until the product could be promoted to the public at large.
On the question of confidentiality of information as between members of the CI Network, a matter that loomed large in the proceeding was the significance of the text of a footer at the end of each email sent by Mr Arieni (which was at the end of the emails of 21 April 2010 and 3 May 2010).
The text is in these terms:
Confidentiality: This E-Mail is from Exlites. The contents are confidential and are intended only for the named recipient. The recipient is hereby notified that any use, copying, disclosure or distribution of the information contained in the E-Mail is strictly prohibited. If you have received this email in error, please reply to us immediately at [an email address is set out]. Please delete the document from your E-Mail system.
In relation to the footer, Greenwood J was satisfied that it operated as a cognitive cue of some importance to members of the cohort but by itself it was not determinative of the character of the information communicated by the emails.
In the end, Greenwood J concluded that there was no prior publication of the registered design which had resulted from the emails being sent to Mr Palfrey and the members of the Certified Installers network and the earlier decision of the Registrar was set aside. We believe that this decision sheds more light on what constitutes a “confidential” disclosure before the filing date of an IP right registration such as a design or a patent under Australian law.