Intellectual property theft | Employee theft of information

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The loss of confidential information and intellectual property following the resignation or dismissal of an employee can be a serious concern.  The removal of any confidential information or intellectual property by a former employee may constitute a breach of contract, an infringement of copyright or a breach of an equitable obligation of confidence.

Before a course of action can be pursued, evidence is required before any legal remedy can be sought. Often the evidence required is in a form that can be easily disposed of or destroyed, for example files taken from a company computer. In these difficult circumstances you may be able to rely on an Anton Piller order to secure evidence.

What is an Anton Piller order?

An Anton Piller order, also known as a search order, is an order of a Court requiring one party (Respondent) to allow the other party (Applicant) to enter the Respondent’s premises to inspect, remove or make copies of documents or other items which might form evidence in an action or proposed action against the Respondent.

The real value of an Anton Piller order is that it can be obtained without notifying the person against whom it is sought. This can assist in securing evidence that is at risk of being destroyed, for example, source code taken from a company server using an external drive.  See our article on Anton Piller orders here.

Anton Piller orders and employee theft

In Leica Geosystems Pty Ltd v Koudstaal (No 3) [2014] FCA 1129 (Leica Geosystems) the plaintiff company (Leica) was a supplier of software and services to the mining industry and the defendant was a software engineer formally employed by the plaintiff who had commenced employment with a competitor.

Leica suspected the defendant had copied large amounts of source code and other files to a personal external hard drive prior to leaving the company. Another employee of Leica, who was a personal friend of the defendant, noticed a folder on the defendant’s personal laptop titled “Leica”.

In light of its suspicions, Leica successfully applied to the Federal Court for Anton Piller style orders.  The order empowered the legal representatives of Leica to enter the residence of their former employee to search for and seize:

• any source code belonging to Leica or its associated companies; and
• any data storage device potentially containing any source code belonging to Leica or its associated companies.

Armed with the evidence obtained under the Anton Pillar order Leica was successful in their action against their former employee. Leica was awarded damages for the infringement of their copyright by the employee as well as the delivery of all property of Leica in the possession of the former employee.

Lessons from Leica Geosystems

Leica was very fortunate in their circumstances. The defendant had taken the source code for software that was the core of their business and commenced employment with a direct competitor. There was no evidence that the stolen source code had been made available to Leica’s competitors and by obtaining an Anton Piller order Lecia was able to prevent extensive damage.

Links and further references

Legislation

Leica Geosystems Pty Ltd v Koudstaal (No 3) [2014] FCA 1129

Further information about Anton Piller Orders

If you would like us to advise you obtaining a search order in cases of employee theft, contact us for a confidential and obligation-free discussion:

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

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