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HomeminewsLuxottica v Specsavers: Luxottica Win or Storm in a Tea Cup?

Luxottica v Specsavers: Luxottica Win or Storm in a Tea Cup?

The legal stoush between sunglass and prescription eyewear retail rivals, Luxottica and Specsavers, came to a head when the parties recently appeared before Justice White (White J) in the NSW Supreme Court.

The First Round

Luxottica sought injunctive relief for the return of sensitive documents forwarded by Janet Grant (at the time, a Luxottica employee) she emailed to her home and one document she sent to her husband, an employee of Specsavers.

At the first hearing of this matter in September 2008, the Supreme Court issued an order restraining Grant from making any improper use of the information in the documents. At the final hearing in February, Grant confirmed her consent, without admissions, to orders that all of the emailed documents, together with certain other documents she had in the course of her employment, and all copies of the documents, would be delivered to Luxottica, and that all electronic copies of the documents would be deleted.1

The substantive issue remaining in the case, apart from costs, was Luxottica’s claim for breach of contract and copyright infringement.

In his decision handed down on 9 March, White J was careful to point out that Grant had breached her employment contract, by forwarding emails containing Luxottica proprietary information to her home email address.2

What Happened? What Documents?

Janet Grant resigned from Luxottica after accepting a position with market rival, Specsavers. Before departing, she forwarded 23 Luxottica emails to her home email address “for her own personal use”3. She later forwarded one email to her husband’s email address, an employee of Specsavers.

As part of her employment arrangement, Grant worked on Luxottica business from home.4 Accordingly, Grant also had other documents belonging to Luxottica at her home.

Upon giving her resignation, Luxottica inspected Grant’s emails and, upon finding the offending emails, requested her to leave the same day5. Injunctive relief was sought against the Grants and Specsavers four days later for breach of contract and copyright infringement. Luxottica claimed “that in sending the emails to [Grant’s] home, and then later forwarding one of them to her husband at his work, [Grant] infringed its copyright and breached her contract of employment”.6

Four of the documents the subject of Luxottica’s claim became the centre of the dispute. These four documents included a guidebook or procedures manual for new graduate optometrists7, a document called ‘Optometrist Referrals’8, a Powerpoint presentation providing training to optometrists on how Medicare might be billed in different circumstances9 and a fourth document called ‘Coaching for Conversion Tool Kit’10.

On the first day of the final hearing in February, Grant, without admissions, consented to Court orders requiring the return of Luxottica’s documents.11 After consenting to the orders for the return of 172 documents, all that remained for the Court to decide was whether or not Luxottica had copyright in the four documents sent by Grant to her home email address and a claim for nominal damages, and Luxottica’s claim for additional damages under the Copyright Act.

On the afternoon of the first day of the hearing, the Grants and Specsavers conceded that Luxottica had copyright in the documents and the remaining substantive issue was whether or not Luxottica was entitled to nominal damages for breach of contract and copyright infringement and additional damages under the Copyright Act.

Luxottica claimed additional damages for copyright infringement, believing its prompt action in seeking injunctive relief had prevented the opportunity for such damage to occur.12 However, the Court dismissed this claim.

White J’s Findings

At all times, White J accepted that Grant did not turn her mind to the propriety of her conduct13; that she appeared a frank and truthful witness and readily made concessions against her interests14; and, that she had forwarded the emails to her home address for her own personal use. He also accepted that Grant did not use or disclose any confidential information because “there was nothing in her forwarding those documents to her home email that amounted to an attempt to use or disclose the documents.”15

Notwithstanding this, White J found that the four documents did contain proprietary information, sent without consent, and did breach Grant’s employment contract with Luxottica. In this regard, White J stated, “There was ultimately no dispute that the four documents in question were of a kind which could validly be the subject of a contractual restraint against disclosure”16 and ordered Grant to pay Luxottica nominal damages of just AUD$10.

On the issue of copyright infringement, there was no dispute by Grant or Luxottica that the four emails were emailed by Grant without Luxottica’s consent.17 Being literary works, White J held that the documents were reproduced in a material form when they were emailed to Grant’s home and her husband’s work email, irrespective of whether she, or her husband, read the emails, thereby infringing Luxottica’s copyright.18

While the documents were proprietary, no additional damages were awarded, particularly as the court acknowledged Grant was not conscious of any wrongdoing, had not derived any benefit from the infringement of Luxottica’s copyright and, because the interests of deterrence did not warrant such an award.19 The Court took into account that the documents had already been delivered up to Grant’s lawyers and did not contain trade secrets or important financial information.20

White J was particularly critical that the sensible accommodation, namely the consent to an order for the return of the confidential documents, was only reached on the first day of the hearing in February. He went on to indicate that it is likely to be a matter relevant to the question of which party pays legal costs and noted that he would receive submissions in relation to ‘without prejudice’ correspondence which had passed between the parties on this point.21

White J concluded that “no award of additional damages should be made. I am concerned about the considerable resources that both sides have evidently deployed in this case where the sole remaining substantial issue is a claim for damages of AUD$10,000 or less. The procedures and costs appear to be out of proportion to the amount at stake.”22

In his final orders, White J dismissed all other claims against the Grants and Specsavers. The parties have made written submissions in relation to costs and are awaiting orders of the Court.

The Parties’ Response

Upon the finding being handed down, Luxottica stated that “[we] are pleased the court has supported our claim and ordered the return of Luxottica’s … documents and the protection of our intellectual property.”23

Specsavers founder, Doug Perkins, who from the beginning, thought this case was an overexaggeration, said: “It has all been a very expensive storm in a tea-cup …”24

Mr. Grant, husband of Janet Grant, commented: “I never asked to receive this OPSM document and the court acknowledged that I never opened it and never passed it on from my email account. I don’t know why this ever came to the courts.”25

Janet Grant commented: “What’s so annoying is that I offered to delete the four documents they fought the case about immediately upon Luxottica commencing the court case. I also told them that I would have given them back all of the documents I had been working on at home if I had been given the opportunity to do so. The Court acknowledged this point. If only OPSM had told me what their concern was, all of this could have been resolved without any need for going to court.”26

This case is an important reminder to be aware that employment contracts generally contain standard terms that prevent employees from using company documents in any manner it has not authorised. This includes emailing documents outside the company, without consent.

Leigh Cushway (n. Anscombe) B.IT (Bus. Systems) (Hons.), B.LLB, is a qualified lawyer, registered with the Law Society of New South Wales and mivision’s legal advisor.

Footnotes
Luxottica Retail Australia v Grant & Ors [2009] NSWSC 126 at par18 | 2. par 52 | 3. par 8, 11 | 4. par 17, in letter to Norton White, solicitors for Grant from Minter Ellison, solicitors for Luxottica. | 5. par 14 | 6. par 5 | 7. par6 | 8. par 7 | 9. par 8 | 10. par 9 | 11. par 15 | 12. par 45 | 13. par 33 | 14. ibid. | 15. par 23 | 16. par 26 | 17. par 29 | 18. par 49 | 19. par 45 | 20. ibid. | 21. par 50 | 22. ibid. | 23. Luxottica Press Release, 9 March 2009 | 24. Specsavers Press Release, 9 March 2009 | 25. ibid. | 26. ibid.

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