Business Law Assignment: KKL vs. Thor & Odin, Frigg's Patent

This assignment presents a business law problem involving equitable breach of trust and patent law. Part A examines whether KKL can claim an equitable breach of confidence against Thor and Odin, considering the elements of confidentiality, duty of confidence, and unauthorized use of information, with reference to relevant case laws like Coco v A N Clark (Engineers) Ltd and Sent v John Fairfax Publications. Part B assesses whether Frigg can patent a fabric she invented, evaluating the criteria for patentability, including manufacturing manner, novelty, inventive step, usefulness, and secret usage, referencing the Patents Act 1990. The assignment applies the IRAC method to analyze the legal issues, rules, application, and conclusions for each part, providing a comprehensive analysis of the legal principles involved and applying them to the given scenario.

Running head: BUSINESS LAW ASSIGNMENT
BUSINESS LAW ASSIGNMENT
Name of the Student:
Name of the University:
Author Note:

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Part A:
Issue:
The issue to be explained in the present assignment is whether an action for equitable
breach of trust can be claimed by KKL against Thor and Odin.
Rules:
Information is said to be confidential if such information can be used in business
operation and it is valuable as well as secret which can afford economic benefit on other
businesses [1]. Elements required constituting a breach of confidence or trust are as follows;
 Whether such information is secret or confidential in nature,
 Whether the recipient of such information possesses the duty of not disclosing or using
such information,
 Whether the recipient of such information has used such information or revealed it
without seeking permission.
These elements are elaborated in the case of Coco v A N Clark (Engineers) Ltd (1968) by
Megarry J. Justice Megarry held that the above mentioned three e;emenst must be satisfied in
order to claim a remedy for breach of confidence.
The secrecy standard states that the information must not be absolutely confidential.
Instead the information must be identifiable as provided in the case of Sent v John Fairfax
Publications (2002) VSR 429. Further secrecy refers to the fact that the information must not be
of be a public property or anything of public knowledge. This was entrenched in the case of
Ansell Rubber Co v Allied Rubber Industries [1967] VR 37. It was held that in circumstances

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where any reasonable person in the position of the recipient of the information had realized that
the information given to him is confidential. Such information further must have some
commercial importance as held in the case of Leica GeoSystems Pty Ltd v Koudstaal (No 3)
[2014] FCA 1129. The information must be treated by the plaintiff seeking relief as confidential.
Information cannot be said to be confidential if such information is related to a particular
profession or trade as in that case it amounts to public knowledge as held in Maggbury Pty Ltd v
Hafele Australia Pty Ltd [2001] HCA 70.
The second element to be considered is whether there lies a duty of confidence such that
the recipient has the duty of not disclosing the information. In many cases, the employees of a
company are restrained to disclose information by means of restraint of trade as held in
BlueScope Steel Limited v Somanchi [2016] FCA 4 case. In this regard the reasonable person test
as held in Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167 at 190.
The third element to be discussed is to determine whether there has been any
unauthorized usage of the information. In this regard, it has to be identified whether the recipient
has disclosed such information without any authority and whether such disclosure falls outside
the ambit of his authority. Further if a third party having knowledge that the concerned
information is confidential reveals it, it also amounts to breach of confidential information as laid
down in the case of Dart Industries v David Bryar & Associates Pty Ltd [1997] FCA 481.
Application:
In the present case, it is seen that Odin works for Thor Pty Ltd as the managing and the
sole company director. Thor made a contract with Keiko Kelda Limited hereinafter referred to as
KKL for writing a computer program that will spin a bullet proof yarn to a fabric. KKL further

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employed Frigg, Odin’s wife as their main designer. Odin paid regular visits to the KKL during
the initial stages. On completion KKL was provided with the manual for operating the system
together with other associated things. Due to this, KKL become successful and further turns into
a leader in the market of bulletproof garments.
After one year, KKL came to know from Frigg that Odin is presently working for KKL’s
Competitor Loki Enterprises Pty Ltd for developing a computer program that will spin Kevlar to
a lighter weighted fabric. It is being widely advertised by Loki that their Kevlar fabric will be
competing with the spider silk fabric of KKL.
In order to determine whether Odin and Thor had caused equitable breach of confidence,
three elements that are to be satisfied are as follows;
 Whether such information is secret or confidential in nature,
 Whether the recipient of such information possesses the duty of not disclosing or using
such information,
 Whether the recipient of such information has used such information or revealed it
without seeking permission.
Firstly it is to be seen that the computer program involved to spin bulletproof yarn was
secret or confidential in nature. Here it is seen that the computer used is identifiable in nature.
From the facts of the case, the computer program if of identifiable nature as seen in the case of
Sent v John Fairfax Publications (2002) VSR 429. Secondly it is to be known whether it is of
public knowledge. Though such computer program is known to the relevant profession of a
computer engineer as seen in Maggbury Pty Ltd v Hafele Australia Pty Ltd. Thus the computer
program used is not of confidential nature. Hence the first condition as not fulfilled, it can be

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said that neither Thor nor Odin has beached the equitable duty of confidence and thus no action
for equitable breach of trust can be claimed by KKL against Thor and Odin.
Conclusion:
It can be concluded that no action for equitable breach of trust can be claimed by KKL
against Thor and Odin.
Part B:
Issue:
The issue involved in the part B of the assignment is whether the fabric can be patented
by Frigg.
Rules:
Patent can be referred to as a temporary and limited monopoly in a country provided for
disclosing its invention to the pubic given in the patent specification. In order to claim a patent in
respect of an invention, the patent seeker must satisfy the conditions enumerated in the section
18 of the Patents Act 1990 [2]. These are discussed below;
 Whether the invention is a manufacturing manner,
 Whether the invention is novel and inventive,
 Whether the invention is useful,
 Whether there is secret usage of the invention.

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The manner of manufacture though not defined in the Act, it refers to an economically
useful impact given by the human activity. This is given in the judgment of National Research
Development Corp V Commissioner of Patents (1959) 102 CLR 252.
Second condition to be satisfied is novelty as elaborated under section 7(1) of the said
Act. Novelty refers to an invention which is not anticipated. It means that the invention is not
subjected to disclosure in Prior Art as given in Fomento Industrial SA Biro Swan Ltd. v.
Mentmore Manufacturing Co., [1956] RPC 87. As per section 18(1)(b)(i) of the Act, Prior Art
refers to all the information as well documentation available to the public before a given date of
31st July 2014 which is relevant to the claim of originality of the patent. It is to be analyzed that
whether the item or information found in the prior art makes a disclosure of all the essential
matters of the invention in the new invention. Then it is to be decided whether the invention
involves an inventive step. Section 7(2) of the Act states an inventive step is said to be involved
if the new invention when compared with the prior art, the new one is not found to be obvious as
to a person who is skilled in the similar form of art as compared to common general knowledge
as existed prior to the priority date. The test for it is obviousness where the question to be asked
whether a non-skilled person will regard the invention as obvious. Non inventive occurs when
mechanical improvement is done to the previous invention, or providing single solution to the
problem or expected combination of the features of the existing invention.
The other elements to be considered whether the invention is useful as given in section
18(1)(c ) of the said Act and whether it is in secret commercial use by the inventor prior to filling
of patent usage as laid down in section 18(1)(d) of the said Act.
Application:

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From the facts it is seen that in order to claim a patent for the fabric invented by Frigg the
above mentioned criteria are to be satisfied.
 Whether the invention is a manufacturing manner,
 Whether the invention is novel and inventive,
 Whether the invention is useful,
 Whether there is secret usage of the invention.
As per the facts of the given scenario, the invention of Frigg amounts to a result which is
economically useful and produced by human activity. However the invention made by Frigg is
similar to one available in the prior art which although lapsed in 1991 but it existed before the
priority date and is related to the similar type of invention of bullet proof fabric, only difference
is wrap and weft yarns were used and Frigg’s invention involved usage of spider silk yarn. This
showed that the novelty condition is not fulfilled and hence she cannot apply for patent for her
invention.
Conclusion:
Thus the fabric cannot be patented by Frigg.

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References:
[1] R. Pattenden and D. Sheehan, “The law of professional-client confidentiality,”Oxford
University Press, 2016, pp. 134-145.
[2]2019. [Online]. Available: http://classic.austlii.edu.au/au/legis/cth/consol_act/pa1990109/.
[Accessed: 01- Sep- 2019].