AUSTRALIA Law and Practice Contributed by: John Lee, Siabon Seet, Vanessa Farago-Diener and Irini Lantis, Gilbert + Tobin
4. Safeguarding Against Allegations of Trade Secret Misappropriation 4.1 Pre-Existing Skills and Expertise It is accepted by Australian courts that employees will have a bank of general knowledge and skills relevant to their field of expertise. Employment contracts which attempt to prohibit for - mer employees from using their general knowledge and skills for subsequent employers have been held to be unenforceable. Similarly, long non-compete pro - visions in employment contracts are also commonly held to be unenforceable in Australia. While Australia does not recognise the US doctrine of “inevitable disclosure”, Australian courts can consider as part of their equitable jurisdiction whether to impose a non-compete term for a former employee in circum - stances where there is no express non-compete in the employment contract and the new employer’s work substantially overlaps with the former employer’s work ( Liberty Financial Pty Ltd v Jugovic (2021), FCA 607). 4.2 New Employees In order to protect itself from claims of trade secret misappropriation, companies will often include con - tractual obligations in employment contracts requiring that no third-party trade secrets or information not in the public domain is used by the employee. Larger companies will also often have robust IT poli - cies and procedures in place to limit any potential misuse by employees of both the company’s and any third parties’ IP. This will often include restricting use of data transfer devices such as USBs and monitoring of employees’ document activity.
can positively make out its case prior to commencing proceedings. Prior to commencing proceedings, a trade secret owner may send a cease-and-desist letter to the potential defendant outlining its case and request - ing the return of its trade secrets together with an undertaking that the potential defendant will not use the trade secrets. Whether a cease-and-desist letter is sent will turn on the facts of the case and extent of any potential damage. 5.2 Limitations Period There are no specific statutory limits in relation to trade secret rights in Australia. In circumstances where there has been an unauthor - ised use or disclosure of information which is the sub - ject of a confidentiality arrangement, then a limitation period will apply (six years for Queensland, New South Wales, Victoria, Tasmania, South Australia, Western Australia and the Australian Capital Territory, and three years for the Northern Territory). 5.3 Initiating a Lawsuit Once a trade secret owner becomes aware that its trade secrets have been taken or misappropriated, it can commence proceedings in either the Federal Court or a state/territory Supreme Court. Trade secret proceedings, like other civil proceedings, are commenced by way of pleadings which require the plaintiff to set out its case and the remedies it seeks. 5.4 Jurisdiction of the Courts Australia has a tiered court system which includes a federal court system, state/territory courts and spe - cialist courts. Proceedings for misappropriation and breach of trade secrets and confidential information can be brought in either the Federal Court of Australia, which is a national court, or the Supreme Court of the relevant state/territory. The choice of jurisdiction will depend on whether the party initiating the proceedings has an equitable, contractual or statutory claim and whether there are any additional IP rights, such as copyright infringement, being asserted. The Supreme Court is
5. Trade Secret Litigation 5.1 Prerequisites for Filing a Lawsuit
When a party believes that its trade secrets and/or confidential information may have been misappropri - ated or taken, it must first determine with specificity the information in issue. The party must then iden - tify whether there is an equitable, contractual and/ or statutory breach of confidence and ensure that it
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