Sophisticated investors: precisely what are they?

Section 708 of the Corporations Act 2001 (Cth) (Act) contains what’s known as the small scale offerings exception to the obligation to issue a disclosure document.  This is more commonly known as the “20/12 rule”.  Subsection 708(8) provides an exception to ‘sophisticated investors’ where a qualified accountant provides a certificate dated not more than 6 months before the date that the offer (of securities) is made attesting that the person is ‘sophisticated’. [Read more…]

New Fair Work information statement

In December 2019, the Fair Work Ombudsman updated the Fair Work Information Statement (FWIS).  The new FWIS sets out information for businesses about the conditions of employment for new employees.  Businesses must issue a copy of the FWIS to all new employees before, or as soon as possible after, they commence employment.  This article discusses the FWIS key changes for 2020. [Read more…]

Insolvent trading – prison for former Kleenmaid director

Founded in 1980, whitegoods importer and distributor Kleenmaid (Company) fell into administration in 2009 with debts amounting to approximately $96 million, including $26 million in customer deposits that had been paid for appliances yet to be delivered.  After an extensive investigation and 59-day trial by the Australian Securities and Investment Commission (ASIC), founder and former director Mr. Andrew Young (Mr. Young) was sentenced to nine years in jail for offences arising from the Company’s collapse. [Read more…]

Compilations from the public domain – confidential or not?

In the case of Ezystay Systems Pty Ltd v Link 2 Pty Ltd [2014] NSWSC 180 (Ezystay) it was held that the plaintiff’s business manuals were confidential despite having been compiled from the documents in “public domain”.  On Appeal, the Court had to re-visit the test for confidential information to determine whether or not the respondents’ software, business manuals and other documents collated from the public domain were in fact capable of being protected as confidential information.

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Shareholder oppression – valuation issues

Shareholder oppression or minority shareholder oppression can occur when the majority (shareholder(s)) in an entity misuse their majority to oppress or control the minority shareholders.  There are is not a limited number or combination of activities which the majority may engage in to oppress the minority, sometimes referred to as “sharp practice” or “board room tactics”, the possibilities are almost infinite. [Read more…]

Tort of conspiracy & confidential information

The tort of conspiracy has been well established in Australia by the High Court, however it is a fairly uncommon cause of action.  The High Court has endorsed some early UK decisions with respect to damage, including the cases of Mogul Steamship Co v McGregor Gow & Co [1892] and Sorrel v Smith [1925] AC 700.  [Read more…]

Risks of making financial forecasts

When a business is seeking to raise capital or advertise as being for sale financial forecasts are often made in a way so as to appeal to the target audience – investors or potential buyers.  In some cases however, the forecasts made do not translate into reality giving rise to potential legal consequences.  As forecasts are indicators often relied used by investors to make decisions on whether or not to invest, statements that are incorrect may amount to misleading and deceptive conduct under the Australian Consumer Law (ACL) (being Schedule 2 to the Competition and Consumer Act 2010 (Cth)) and have potentially serious legal consequences. [Read more…]

Phasing out the innovation patent

Article updated 14/02/2020

The Innovation Patent system was originally introduced in 2001 to provide a cheaper, more efficient way for small to medium-sized businesses to protect their intellectual property through the ‘innovative step’ test.  Innovation Patents protect those inventions that do not meet the inventive step threshold required for standard patents.  However, the recent Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 (the Bill) will see the eventual phasing out of the Innovation Patent system in Australia. [Read more…]

IP contracts now subject to restrictive trade practice provisions

Agreements providing for the conditional licensing or assignment of intellectual property (IP) rights are now subject to the restrictive trade practice provisions of the Competition and Consumer Act 2010 (Cth) (CCA).  On 13 September 2019 section 51(3) of the CCA was been repealed removing the exception which applied to the licensing and assignment of IP.   This means commercial transactions involving the assignment of IP rights will be subject to the anti-competitive prohibitions, as are other transactions involving property. [Read more…]

Has my software been copied? – the legal test

There is an urban myth that something can be copied and changed by 20% or so and then there is no copyright infringement.   Rightly or wrongly this is simply untrue.  In the case of IPC Global Pty Ltd v Pavetest Pty Ltd (No 3) [2017] FCA 82 (IPC Global), a former employee of the applicant copied source code and passed it to a developer.  It was subsequently alleged that in doing so, the respondent had breached a contractual obligation of confidence and had also breached the applicant’s copyright. [Read more…]

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