Trade Secrets 2025

AUSTRALIA Trends and Developments Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

dential information and goodwill through reason - able post-employment restraints. The govern - ment has indicated that it will consult on policy details, including exemptions, penalties, and transition arrangements. However, with a federal election to be held on 3 May 2025, it remains to be seen whether this proposed ban will ulti - mately be enacted into law or not. If it is, this will enhance the need for employers to ensure they adequately identify, secure and protect valuable trade secrets in an employment context. Without the ability to enforce even short term restraint of trade, ensuring ex-employees do not take proprietary information with them will become even more important. The application of settled principle in the context of new technology The recent Australian case of New Aim Pty Ltd v Leung [2022] FCA 722, and the appeal deci - sion in New Aim Pty Ltd v Leung [2023] FCAFC 67, demonstrate the issues that can arise when applying settled legal or equitable principles in the context of new technologies. New Aim Pty Ltd (New Aim) commenced pro - ceedings against a former employee, Mr Leung, alleging breach of confidence, breach of con - tract, and contravention of Section 183 of the Corporations Act. The information alleged by New Aim to be confidential was the identity and contact details of certain suppliers to New Aim. Specifically, New Aim alleged that Mr Leung dis - closed the identity and contact details of rep - resentatives of the relevant suppliers to com - petitors of New Aim, and used that information for the benefit of those competitors. The details alleged to have been misused by Mr Leung were recorded in the WeChat application on his (per - sonal) mobile phone.

The primary judge was not satisfied that the infor - mation stored in the WeChat application on Mr Leung’s mobile phone had the “necessary qual- ity of confidence” , and accordingly, dismissed New Aim’s claim for breach of confidence, as well as for breach of contract and contraven - tion of Section 183. New Aim appealed, and given some of the issues raised in its grounds of appeal, an expanded bench was convened (consisting of five judges instead of the usual three) to hear the appeal. The Full Court found the primary judge had erred in his approach to determining whether the information alleged to have been misused by Mr Leung was “confidential information” or not, as his Honour focused on the location of the infor - mation and the way it was stored, rather than on the nature and content of the information. The Full Court ultimately concluded that, “… by focusing on the location of the information and the way it was stored, as distinct from the nature and content of the information alleged to be confidential (the identity and contact details of suppliers to New Aim), the primary judge unduly confined his analysis and failed to address New Aim’s case. This error applies generally to his Honour’s consideration of the confidentiality or otherwise of the alleged confidential informa - tion” (at [51]). The ins and outs of artificial intelligence, and implications for trade secrets In an ever changing technological landscape, trade secrets and confidential information are an ever more important pillar of a company’s IP portfolio (the others including copyright, patents and trade marks). The rapid development and uptake of artifi - cial intelligence (AI) by businesses in Australia,

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