Unlike other jurisdictions such as the UK, there is no relevant statutory or regulatory regime governing the protection of trade secrets in Australia. Rather, trade secrets are protected in Australia through various statutes which protect against the disclosure of confidential information by imposing an obligation of confidence, as well as in contracts and in equity.

Statutory Sources

The Corporations Act 2001 (Cth) (Corporations Act) provides that a person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to gain an advantage for themselves or someone else or cause detriment to the corporation. An individual’s obligations under the Corporations Act continue after that individual has stopped being an officer or employee.

The Privacy Act 1988 (Cth) (Privacy Act) is the principal Australian legislation governing the protection of personal information about individuals including the collection, use, storage and disclosure of personal information by entities in the public and private sectors. The Privacy Commissioner is required to have regard to the need to prevent the unreasonable disclosure of confidential commercial information in a report following an investigation of an act or practice.

The Freedom of Information Act 1982 (Cth) (FOI Act) allows access to documents and information held by the government. Such documents and information often include information about private companies provided, eg, in response to a tender or under a contract. The FOI Act includes an exemption for documents that disclose trade secrets or commercially valuable information.

Contracts

Trade secrets can also be protected expressly through contractual terms that specifically establish that the information being disclosed is to be treated as confidential between the parties as well as implied in a contract, such as an employment agreement.

Equitable Action

In addition to the protections afforded by contract and statute, obligations of confidentiality also arise in Australia in equity, where:

• information was received with the understanding that it would be treated confidentially; or
• the recipient ought to have realised in all the circumstances that the information was to be treated confidentially.

International Treaties

Australia is a party to major international intellectual property (IP) treaties, including the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS Agreement). The TRIPS Agreement sets out general principles and contains minimum standards on IP and enforcement procedures to which Australia adheres. Article 39(2) requires member states to accord protection against unauthorised use of “undisclosed information” in a way that is “contrary to honest commercial practices”, and defines “undisclosed information” for this purpose as:

• secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
• having commercial value because it is secret; and
• having been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

International treaties apply only to the extent that they are incorporated into domestic law.

Information will be a trade secret if it has the necessary quality of confidence and is not within the public domain. Such information can include technical information such as software algorithms, data, formulae, manufacturing processes and commercial information such as client and customer lists, information relating to pricing, sales forecasts and advertising strategies.

Information in Australia that has been found to have the necessary quality of confidence to be a trade secret has included, for example:

• client, customer and supplier lists;
• designs such as building plans;
• marketing materials;
• mathematical spreadsheets;
• information relating to pricing;
• sales forecasts; and
• business information.

An obligation of confidence will arise if it includes the following elements (Dart Industries Inc v David Bryar & Associates Pty Ltd [1997] FCA 481). Firstly, the information must have the necessary quality of confidence and not be a matter of common knowledge or in the public domain. Secondly, the information must have been imparted in circumstances identifying an obligation of confidence. Additionally, the information in which confidentiality is claimed must be capable of being identified with a degree of specificity.

In Australia, a trade secret owner is required to take reasonable measures to keep the information secret in order for the information to qualify as a trade secret.

A court will consider what measures the owner of the information took to guard the secrecy of the information, eg, by way of non-disclosure agreements, IT security measures, controlling access to facilities. Courts have held, for example, that disclosure of information without imposing an obligation of confidence will mean that the information does not have the necessary quality of confidence and is therefore not a trade secret. Similarly, if the information is disclosed in a document, eg, a manual, that is not restricted, then the information does not have the necessary quality of confidence.

In making an assessment as to whether a company took reasonable measures to protect its trade secrets, Australian courts will consider all the facts and circumstances of the case including, for example, the nature and scale of the company and type of information.

In Australia, it is implied into all employment contracts that the employee will act with good faith towards their employer and that the employee has duties of confidence to their employer.

Additionally, an employee will have obligations to their employer pursuant to Sections 182 and 183 of the Corporations Act.

Best practice in Australia is to have detailed IP policies and procedures and express terms in employment contracts.

Trade secret protection is not the optimum innovation strategy for technologies that can be reverse engineered or independently developed. In Australia, companies with technology which can be readily reverse engineered would ordinarily seek patent protection.

There are no specific protections for trade secrets in Australia based on the technology in issue.

In Australia, computer software, including source code and object code, is protected under copyright law as a “literary work”. If a trade secret owner believes that there has been a misappropriation of its computer software, in addition to claims available for breach of trade secrets, the owner will also have a claim under copyright law.

Trade secret and confidential information protection will last as long as the information remains outside of the public domain or unless otherwise specified in contractual provisions.

So long as disclosure of the information which constitutes the trade secret or confidential information is under an obligation of confidence, whether implied such as in an employee contract or express such as under a non-disclosure agreement, protection will remain. Generally, the older the information in issue, the more difficult it will be for the owner to establish that it has remained confidential and not entered the public domain.

As a trade secret is not a proprietary right, it cannot be assigned or licensed in and of itself. To achieve functional exclusivity, and effect a transfer of trade secrets, entities typically enter into an agreement that requires the original trade secret owner to: (i) disclose the trade secret, typically in an agreed form; and (ii) contractually agree to strict obligations of confidentiality not to use or allow others to use the trade secret going forward.

Subject to the terms of the contract, once assigned or licensed, the assignee or exclusive licensee may enforce its right in the trade secret against others.

Where a trade secret owner has granted an exclusive licence to use its trade secrets, both parties will be required to safeguard the secrecy of the information to ensure that trade secret status is not lost.

Where a document is both a copyrighted “work” and discloses trade secrets, it is common to take assignment of the copyright in the work.

Trade secret and confidential information protection differs from other forms of IP right protection in Australia, as there is no relevant statutory or regulatory regime governing the protection of trade secrets and confidential information in Australia like those which exist for other forms of IP, eg, patents, trade marks, designs, copyright and plant breeders rights.

The absence of any relevant statutory or regulatory regime means that there is no prescribed duration for trade secret protection (in contrast to other forms of IP) and there is no registration process (such as exists for, eg, patents, designs and trade marks).

It is not uncommon in Australia to assert trade secret rights in conjunction with a claim of copyright ownership. For example, internal documents relating to the design of an electronic gaming machine can attract both protection as a “work” under the Copyright Act 1968 (Cth) and as a trade secret. If the information is taken by an employee, claims for breach of contract, breach of fiduciary duty and (if the employer was a corporation) breach of the Corporations Act will also apply.

Claims in relation to trade secrets can be commenced in Australia where there is use or threatened use of the trade secret without consent.

A number of trade secret cases commenced each year in Australia relate to employee misappropriation of trade secrets whereby the employer commences proceedings to recover its trade secrets and stop any potential use by the former employee.

In addition to claims against a former employee, including for breach of employment contract, a third party may be liable in relation to a breach if they are deemed to have knowledge of it. Australian courts have held that the following will satisfy the knowledge limb:

• actual knowledge;
• wilful blindness;
• wilfully and recklessly failing to make such inquiries as an honest and reasonable person would make; and
• knowledge of circumstances which would indicate the facts to an honest and reasonable person.

Additionally, a third party may be liable for inducement for breach of contract. In Australia, this involves a defendant inducing another person to break a contract with the plaintiff. In order to make out a case for inducement for breach of contract, the plaintiff must show that the defendant procured or induced the breach of contract and that there is proof of the damage caused by the inducement (Daebo Shipping Company Ltd v The Ship Go Star (2012) 207 FCR 220).

Misappropriation of trade secrets are pursued as civil claims in either the Federal Court or the Supreme Court of the relevant state or territory.

An exception is where the misappropriation of the trade secrets is by a director or other officer or employee of a corporation who has used their position to obtain the information, and the use of the trade secrets has a dishonesty element, such that there has been a likely breach of Section 184 of the Corporations Act, or where the misappropriation of trade secrets involves a foreign government principal under the Criminal Code Act 1995 (the Code). If found guilty of either offence, the court can impose a maximum penalty of up to 15 years imprisonment.

Generally, any misappropriation must be within Australia in order for a trade secret owner to bring a claim under Australian law.

There are, however, discrete instances where a claim can be brought in Australia. This includes, for example, if a claim:

• is against a company that is carrying on business in Australia; or
• is against an individual whose employment contract has a choice of jurisdiction or against a company whose contractual arrangements include a choice of jurisdiction that includes Australia.

In order to make out a claim of trade secret misappropriation, the owner of the trade secret must show that there has been, or is threatened to be, an authorised use or disclosure of the information which causes detriment to it (Smith Kline and French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health [1989] FCA 556).

It is not necessary for the owner of the trade secret to show that the defendant gained access through unlawful means in order to commence proceedings.

The implied obligations in an employment contract are an important legal duty that protects employers from misconduct of employees. An employee will be in breach of their fiduciary duties if they engage in activities which are incompatible with the fulfilment of their duty or involve an opposition or conflict between their interest and their duty to their employer.

In addition to the implied obligations in an employment contract, including express terms for the ownership and treatment of IP in employment contracts provides further protection for employers.

Obligations between joint venturers in relation to trade secrets will usually be covered in the contractual arrangements between the parties. It is common in Australia for joint-venture agreements to:

• distinguish between background IP and project IP;
• include obligations not to disclose the other parties’ confidential information;
• identify who owns project-specific IP; and
• how project-specific IP can be used.

Claims of industrial espionage in Australia will proceed in the same manner as any other proceedings relating to trade secrets. The types of claims available will depend upon the specific facts of the case, including whether the trade secrets were taken by a former employee or business partner.

In considering the appropriate remedy to award a successful plaintiff, the court will have regard to the conduct of the defendant, including whether there was an intentional breach of confidential information, which can lead to exemplary damages (in the case of a breach of contract) and a broader form of injunction.

As protection of trade secrets in Australia relies principally on contractual and equitable obligations, the following contractual tools are recognised as important in safeguarding a business’ confidential information and trade secrets across all industries.

• Use of non-disclosure agreements prior to disclosing confidential information and trade secrets.
• Use of confidentiality clauses in both employment and business contracts.
• Non-compete clauses in employment contracts to limit former employees from engaging in competitive activities.
• Exclusivity clauses in business contracts to restrict the sharing of information.

In addition to contractual tools, other best practices commonly used in Australia to safeguard a business’ confidential information and trade secrets include the following.

• Locking down a business’ IP and confidential information and limiting access to a “need to know” basis.
• Restricting physical access to specific locations such as laboratories.
• Restricting access to online systems, such as files, to only those employees working on specific projects.
• Undertaking a review of an employee’s recent data history and IT access upon resignation.

Exit interviews will be dependent on the employer and will vary across Australia. Typically, an exit interview will include questions as to the nature of the employee’s new position and the company the employee is moving to so as to determine whether any non-compete restrictions in the employment contract apply.

It is not typically the case that an employer in Australia will require a departing employee to provide written assurance in relation to confidential information and trade secrets. However, employers typically provide an exit letter reminding the departing employee of their ongoing obligations regarding non-disclosure of confidential information and trade secrets.

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 former employees from using their general knowledge and skills for subsequent employers have been held to be unenforceable. Similarly, long non-compete provisions 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 circumstances 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).

In order to protect itself from claims of trade secret misappropriation, companies will often include contractual 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 policies 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.

When a party believes that its trade secrets and/or confidential information may have been misappropriated or taken, it must first determine with specificity the information in issue. The party must then identify whether there is an equitable, contractual and/or statutory breach of confidence and ensure that it 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 requesting 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.

There are no specific statutory limits in relation to trade secret rights in Australia.

In circumstances where there has been an unauthorised use or disclosure of information which is the subject 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).

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.

Australia has a tiered court system which includes a federal court system, state/territory courts and specialist 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 generally the appropriate Court for matters involving equitable claims whereas the Federal Court more typically hears contractual claims. If additional IP rights are being asserted, then the proceedings will need to be commenced in the Federal Court.

In Australia, in order to commence a claim in relation to trade secret theft or misappropriation, the trade secret owner must be able to satisfy the four elements of the claim prior to commencing proceedings. The four elements are:

• the trade secret owner must be able to identify with specificity, and not merely in global terms, that which is said to be the information in question;
• must be able to show that the information has the necessary quality of confidence (and is not, for example, common or public knowledge);
• the information was received by the defendant in such circumstances as to import an obligation of confidence; and
• there is actual or threatened misuse of that information, without the consent of the plaintiff.

The pleadings filed by the plaintiff are required to address each for the four elements. Given the nature of trade secrets, it is common that the information in issue is separately referred to in a confidential pleading.

Australian courts have broad powers to make orders, including search orders (Anton Piller orders), at various stages of a proceeding. Search orders can be made by the court ex parte (see, for example, Aristocrat Technologies Australia Pty Ltd v Tran, Federal Court No NSD10 of 2024).

A court can grant a search order if the following conditions are met.

• There is a strong prima facie case.
• The damage (potential or actual) to the plaintiff will be serious of the order is not made.
• There is sufficient evidence that the plaintiff has in their possession important evidentiary material.
• There is a real possibility that the plaintiff may destroy such material or cause it to be unavailable in a proceeding or prospective proceeding.

Search orders are carried out by an independent legal adviser. In cases where the search orders include the seizure of electronic devices, an independent forensic expert will also be included in the search party.

Pre-Trial Discovery

In both the Federal Court and state/territory Supreme Courts, pre-trial discovery is permitted by order of the Court and is known as “preliminary discovery”. Preliminary discovery is an order requiring a prospective defendant to give discovery of documents that are directly relevant to whether the prospective plaintiff has a claim against the prospective defendant. To obtain preliminary discovery, the prospective plaintiff must show that after making reasonable enquiries, they do not have sufficient information to decide whether to commence a proceeding and they reasonably believe that they may have a right to relief (Aristocrat Technologies Australia Pty Ltd v Ainsworth Game Technology Ltd [2018] FCA 1511).

Preliminary discovery can be a very useful mechanism, particularly for employers who believe that a former employee has misappropriated its trade secrets but may not have sufficient evidence (such as forensic evidence) to bring proceedings (see, for example, Aristocrat Technologies Australia Pty Ltd v Light & Wonder Inc [2024] FCA 439).

The party giving discovery must serve on other parties a list of documents that describes the:

• categories of documents in its control;
• documents previously but no longer in its control; and
• privileged documents.

The list of documents must be verified by affidavit. The party giving discovery then produces the non-privileged documents. If this party does not produce the documents, the other parties can apply for an order for production of these documents.

Other Mechanisms

Other mechanisms to obtain evidence include the following.

• Identity discovery – this is an order requiring a party to give evidence or produce documents relating to the identity of a prospective defendant.
• Search orders (Anton Piller orders) – a search order requires the defendant to permit persons to enter its premises for the purpose of securing the preservation of evidence that may be relevant to an issue in the proceeding (or prospective proceeding).
• Inspection orders – these are orders to inspect, sample, observe or conduct an experiment on any document or item.
• Interrogatories – these are orders requiring another party to provide written answers to questions, verified on affidavit.
• Notices to admit facts or documents – a party can require another party to admit the truth of any fact or the authenticity of any document.
• Notice to produce – a notice to produce is a request for the inspection of any document or item.
• Subpoenas – subpoenas require attendance in court to give evidence and/or produce any document or item.

In order to maintain the secrecy of the trade secret or confidential information at issue in a proceeding, Australian courts will often make orders requiring that certain materials (including evidence, documents produced, and parts of judgments) be kept confidential and only available to certain persons or classes of persons (eg, the parties’ legal advisers, experts retained in the proceedings, and the principal instructing in-house counsel).

Defences or potential arguments available to a defendant in trade secret proceedings include:

• that the information is in the public domain;
• that the information does not have the necessary quality of confidence;
• that the plaintiff has failed to identify with precision what information the defendant is said to have used – identification in global terms by the plaintiff is insufficient;
• that the alleged duty of confidence is not owed by the defendant to any particular person – an equitable duty of confidence is not owed at large – rather, it is owed to certain persons having imparted information in circumstances importing an obligation of confidence;
• that there has been independent creation; and
• that the plaintiff cannot establish a causal connection between the defendant’s actions and the alleged breach.

Prior to trial, a party can seek “summary judgment” (in relation to the whole or any part of the proceeding) where the other party has no “reasonable prospect” of successfully defending or prosecuting the claim. The court can also give judgment (generally or in relation to any claim for relief) where it is satisfied that the proceeding or claim is frivolous, vexatious, an abuse of process or no reasonable cause of action is disclosed.

When requesting summary judgement, the moving party will need to provide supporting evidence in the form of an affidavit/s establishing why summary judgment is warranted.

A party making an application for summary judgment should only do so where there is a strong case that summary judgment is warranted.

It is difficult to accurately estimate the cost of trade secret proceedings. The cost will depend on factors such as:

• the nature and number of asserted grounds in issue;
• the number of documents which are said to comprise the misappropriated trade secret or confidential information;
• the nature of the evidence required to establish that the trade secret or confidential information has the necessary quality of confidence; and
• the extent to which expert technical evidence is required to support or defend the claim.

As a rough estimate, the costs a party can expect to incur in a trade secret proceeding where multiple grounds have been asserted (such as breach of confidence, breach of contract and contravention of the Corporations Act) are as follows.

• For a fully contested first instance decision, costs are likely to exceed AUD500,000.
• For preliminary injunction proceedings, costs are likely to exceed AUD200,000.
• For an appeal to the Full Federal Court, costs are likely to exceed AUD200,000.

Proceedings in the Federal Court and state/territory Supreme Courts are usually decided by a single judge, without a jury.

While a party to civil proceedings can request a trial by jury in both the Federal Court and the Supreme Courts of Australia, this is rarely done. In recent decades, the only civil proceedings which have been determined by jury in Australia were in relation to defamation cases.

Proceedings involving misappropriation of trade secrets are litigated in either the Federal Court of Australia or state/territory Supreme Courts and follow the rules of procedure in whichever of those jurisdictions the matter is heard.

Typical procedural steps include:

• filing written pleadings setting out the claims and defences;
• applying for and giving discovery, or using other interlocutory processes such as interrogatories;
• preparing and filing written affidavit evidence, which may include expert evidence; and
• preparing and filing written submissions outlining arguments in support of the respective cases.

The court will typically hear oral testimony from witnesses, both lay and expert (if used), together with oral submissions made by counsel for the parties. Where appropriate, the court may direct that such evidence be given via video-link. It is unusual for cases involving misappropriation of trade secrets to be determined on the papers.

Trial duration can vary widely, depending on the complexity of the matter. By their nature, trade secrets disputes are rarely simple, which means that it may take anywhere from one to several weeks to ventilate all the relevant factual and legal issues at trial.

Expert witness evidence is used in the Federal Court of Australia and in the state/territory Supreme Courts, for the purpose of assisting the court in understanding complex subject matter by the giving of independent and objective opinions.

Each jurisdiction has its own rules and guides for the preparation of expert evidence available to the public, eg, the Federal Court of Australia’s “Expert Evidence Practice Note (GPN-EXPT)” and in the New South Wales Supreme Court, “PRACTICE NOTE SC Eq 5 Supreme Court Equity Division – Expert Evidence in the Equity Division”. The court will give more or less weight to expert evidence depending on its credibility and relevance.

In summary, the process for expert witness evidence is:

• a party decides that, given the nature of the subject matter, the court would be assisted by the opinion of an expert witness;
• the expert prepares a written report, which is filed with the court;
• where the court requires, the experts for each party will meet and confer on an agreed set of topics and produce a Joint Expert Report, which sets out areas of agreement and/or disagreement between them; and
• during trial, each party’s expert will provide oral evidence, which may be by way of cross-examination or concurrently (what is known in Australia as a “hot-tub”).

Costs for expert evidence vary by the rate per hour an expert might charge. Typically costs for an expert witness from initial briefing to conclusion of the proceedings is around AUD50,000–AUD100,000.

A party can apply to the court for a preliminary (interlocutory) injunction restraining a defendant from doing certain acts, until the court determines all the issues in the proceeding.

Preliminary injunctions will generally only be granted after notice has been given to the defendant. In urgent cases, an application for a preliminary injunction can be made without notice and potentially granted in the absence of the defendant. Injunctions are limited to Australia.

Requirements

To obtain an order for an interlocutory injunction, a plaintiff must demonstrate that it has a prima facie case and that the “balance of convenience” favours the granting of an injunction (Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618).

To establish that there is a prima facie case, the plaintiff must show that it has a real, credible case and that it would be entitled to relief at trial.

In considering the “balance of convenience”, the court weighs the harm that may be suffered by the plaintiff if the preliminary injunction is not granted against the harm that may be suffered by the defendant if the preliminary injunction is granted. An important factor is whether financial compensation will be an adequate remedy to the plaintiff if infringement is established.

Duration of Permanent Injunctions

In Australia, permanent injunctions are subject to review. While a permanent injunction is ordered to remain in effect indefinitely, the courts retain the authority to modify or vacate the orders giving effect to the injunction based on changes in circumstances or other relevant factors. Therefore, the duration of a permanent injunction is not fixed and can be subject to judicial review and adjustment.

Undertaking as to Damages

To obtain a preliminary injunction, the plaintiff must give to the court what is known as the “usual undertaking as to damages”, namely, an undertaking that the plaintiff will pay compensation to be assessed by the court to any person (including the defendant and third parties) that is adversely affected by the injunction if the plaintiff is unsuccessful at the final hearing. There is no requirement to provide any security, bond or guarantee with the undertaking.

Other Processes

Australian courts also have the power to make freezing orders (Mareva orders). The purpose of a freezing order is to prevent the frustration or abuse of a court’s process by seeking to meet a danger that a judgment (or prospective judgment) of the court will be wholly or partly unsatisfied. The freezing order can be limited to Australia or can extend to anywhere in the world. A freezing order can only be obtained if the plaintiff has a cause of action that is justiciable within the jurisdiction; it cannot stand on its own.

Damages in trade secret proceedings based on an equitable breach of confidence broadly fall into the category of equitable compensation.

The principle of equitable compensation is to restore the injured party to the position it would have been in had the theft or disclosure of its trade secrets not occurred. The courts have shown reluctance to follow a rigid formula, preferring to assess the amount required to restore the injured party depending on the circumstances of the case, such as:

• the commercial value of the trade secrets at issue;
• potential profits lost because of disclosure of the trade secrets; and
• the gain the wrongdoer has enjoyed by its misuse of the trade secrets.

To claim equitable compensation successfully, a plaintiff must show:

• the relevant trade secrets have commercial value;
• it suffered loss and damage (eg, lost profits or market share) as a result of the theft or disclosure of its trade secrets; and
• the wrongdoer benefited by misuse of the trade secrets, such as by developing a new product it would not otherwise have been able to produce.

Exemplary damages are available in Australia including for copyright infringement and breach of contract. This means that, in circumstances where trade secrets are protected by clauses in a contract preventing disclosure, which are then breached, a plaintiff may seek exemplary damages for the breach of contract alone.

In Australia, permanent injunctions are an available mechanism of relief for trade secret plaintiffs. There are broadly two types of injunctions available.

Types of Permanent Injunctions

• Prohibitory injunctions – these can prevent the person injuncted from taking a specified action, such as releasing a product to the market that has been developed using improperly obtained trade secrets or disclosing those trade secrets (such as ex-employees who might seek to take trade secrets from former employers and provide them to a new employer).
• Mandatory injunctions – these can compel the subject to take a specified action for the purpose of enforcing a legal right, such as withdrawing a product developed using improperly obtained trade secrets from the market.

Obtaining a Permanent Injunction

To successfully obtain a permanent injunction, a plaintiff must demonstrate that:

• the balance of convenience is in its favour, which requires showing that the defendant’s compliance with an injunction would be possible, not unreasonably burdensome, and that there would be minimal adverse effect on any third parties;
• damages alone would not be a sufficient remedy; and
• an injunction is necessary to prevent irreparable harm to its business or reputation.

Australian courts generally operate under a “loser pays” system, meaning that legal costs, including attorney/solicitor fees, are recoverable from the losing party. The extent of recovery is usually about 60% to 70% of the successful party’s actual legal costs. The award of costs is a discretionary exercise. When making a costs order, the court can consider the degree of success that each side has attained and any other relevant factors, such as the conduct of the parties during the proceedings, in determining whether to apportion costs.

In making a costs order, the court can consider what is referred to in Australia as a “Calderbank” offer (that is, an offer to settle) and formal offers of compromise made during the proceedings. If the Calderbank offer or offer of compromise was reasonable in light of the final outcome of the proceedings and was made at an appropriate time in the proceedings, the court could potentially find that rejection was unreasonable and order the successful party to the proceedings to pay the unsuccessful party’s legal costs from the date of the offer.

Additionally, a successful party to a proceeding may seek an indemnity costs order. These are awarded in exceptional circumstances, such as when the losing party has conducted the litigation in a particularly unreasonable or vexatious manner, eg, by making frivolous or baseless claims, misleading the court, or refusing reasonable offers to settle without justification. Indemnity costs cover a higher proportion of the winning party’s legal expenses, potentially up to the full amount.

A successful plaintiff can seek to recover its legal fees (including attorney/solicitor and barrister fees), expert witness fees, court filing and hearing costs, as well as miscellaneous costs such as court transcripts.

At the conclusion of proceedings, the court will either make an order outright in relation to costs or invite the parties to make submissions (written and/or oral) prior to making a final costs order. Typically, the court will make an order that the unsuccessful party pay, eg, 60% of the successful party’s costs as assessed or taxed.

Following the making of a costs order by the court, the successful party will either file a Bill of Costs or an Application for Lump Sum Costs detailing the costs it seeks recovery of and the relevant amount. These documents are typically prepared by either the acting solicitors or an experienced cost assessor. The unsuccessful party will have an opportunity to respond to the costs application after which the court, usually a registrar and not the hearing judge, will make a final assessment.

There are two tiers of appeal above a single judge of the Federal Court and state/territory Supreme Court.

• The first tier is the appellate jurisdiction of the relevant court sitting as a Full Court (Federal Court) or Court of Appeal (state/territory Supreme Court). First instance decisions from a single judge of the court can be appealed to the Full Court (Federal Court) or Court of Appeal (state/territory Supreme Court), which is made up of three or five judges. If the decision is interlocutory, leave of the court is required.
• The second tier is the High Court of Australia, which is Australia’s highest appellate court. Appeal to the High Court is not a right; special leave to appeal is required.

Appeals to the Full Court or Court of Appeal and the High Court are usually heard within four to nine months, although the time taken for issuing a decision varies.

For an appeal to succeed, a party must convince the court that the judge who heard the original case (or the Full Court or Court of Appeal, if appealing to the High Court) made an error of law and that the error was of such significance that the decision should be overturned.

Interlocutory Decisions or Orders

Appeals from an interlocutory order or decision of the court requires leave of the court to appeal.

An interlocutory order or decision is one made during a proceeding before a final decision is given.

In the Federal Court, this can be done by:

• applying for leave orally – this is made to the judge who delivered the relevant decision or made the relevant order at the time these are pronounced; or
• applying for leave by filing a written application – within 14 days of the decision being made, to be either via a hearing or on the papers.

In a state/territory Supreme Court, this can be done by filing a written application within 28 days of the material date of the decision or orders.

Final Decisions or Orders

If the decision appealed from is final and leave has not been considered, the party wishing to appeal must file a notice of appeal within 28 days of the decision being delivered, setting out brief grounds relied on in support of the appeal and the decision or orders it seeks. A copy of this must be served on the defendant.

Appeals may be filed by either the plaintiff or the defendant to the decision appealed from. It is also possible for each of the parties to appeal the decision. In this situation, the defendant may file a notice of cross-appeal setting out the parts of the decision or the orders on which it seeks a different result. A party may choose this course even though it is successful in the overall result.

Federal Court

Appeals in the Federal Court of Australia may be against findings of fact or law. To succeed on appeal, an appellant must successfully demonstrate that the primary judge fell into error, such that the correctness of the decision reached is in doubt.

Error may be found in discretionary matters, such as where an appellant believes the primary judge gave more or less weight to particular evidence than should have been given.

In the Federal Court, appeals may be:

• in the strict sense – meaning that the Full Court may substitute its own judgment for the primary judge’s decision on a matter of law or clear error in a factual finding; or
• on a question of law only – in this circumstance, questions of law will be decided by the Full Court, whereas facts that are shown to have been determined in error will be remitted (sent down) to the court below for redetermination.

A party may apply to the Court for further evidence to be admitted on appeal, no later than 21 days before the hearing of the appeal, supported by an affidavit stating the facts on which the party relies.

Supreme Court

Appeals to the Court of Appeal may be against any judgment or order of the court in any of its divisions. These appeals may concern errors of law, errors in factual findings, or a mixture of both.

Where a party establishes error in the decision of the court below, the Court of Appeal may vary the orders made to correct the error, substitute its own decision for that given by the court below, or order a new trial be held.

The Supreme Court may allow further evidence to be admitted on appeal. To do this, a party must apply by filing a motion with the Court, supported by an affidavit setting out the facts on which the party relies. The Court will make a decision to allow or dismiss the motion.

Further Comments

The confines of an appeal are set by the boundaries of the issues run at trial. This means that, for an issue to be available to a party in an appeal, it must have been ventilated at trial.

While applications for leave to appeal can be determined on the papers alone, appeals themselves are usually conducted via a court hearing.

Trade secret claims are pursued as civil claims in either the Federal Court or the Supreme Court of the relevant state or territory.

The exception is where the misappropriation of trade secrets is by a director or other officer or employee of a corporation who has used their position to obtain the information, and the use of the trade secrets has a dishonesty element, such that there has been a likely breach of Section 184 of the Corporations Act, or where the misappropriation of trade secrets involves a foreign government principal under the Code.

Criminal Prosecution Under Section 92A.1 of the Code

Pursuant to Section 92A.1 of the Code, a person commits an offence if:

• the person dishonestly receives, obtains, takes, copies or duplicates, sells, buys or discloses information;
• the information is not generally known in trade or business, is commercially valuable, and the owner of the information has made reasonable efforts to protect it;
• the conduct (theft) is engaged in on behalf of, or in collaboration with, a foreign government principal or someone acting on their behalf; or
• the conduct is directed, funded, or supervised by a foreign government principal or person acting on their behalf.

To initiate a criminal prosecution in the event of trade secret theft involving a foreign government principal, the victim of the offence would contact the Australian Federal Police (AFP).

An accused person cannot be tried for committing this offence without the written consent of the Commonwealth Attorney-General. The maximum penalty for committing the offence is 15 years’ imprisonment.

Defences

There are no specified defences available for this kind of offence. Defences generally available for offences in the Code (see 2.3 Joint Ventures) include:

• duress, such as where the accused has been threatened into committing the offence;
• emergency; and
• where the offence is justified or excused by another law of the Commonwealth.

Criminal Prosecution Under Section 184 of the Corporations Act

Pursuant to section 184(3) of the Corporations Act, a person commits an offence if:

• the person used the information dishonestly with the intention of directly or indirectly gaining an advantage for themselves, or someone else, or causing detriment to the corporation; or
• the person used the information recklessly as to whether the use may result in themselves or someone else directly or indirectly gaining an advantage or causing detriment to the corporation.

Defences

Defences or arguments available under the Corporations Act include, but are not limited to that the defendant:

• was not intentionally or recklessly dishonest;
• acted in the best interests of the company;
• acted for a proper purpose;
• did not gain anything for itself or someone else; and
• did not cause detriment to the company.

Mechanisms Available to Trade Secret Owners to Co-Ordinate With Law Enforcement Authorities

In Australia, trade secret owners have several mechanisms available to co-ordinate with law enforcement authorities when investigating trade secret misappropriation or economic espionage offences. These mechanisms ensure that the trade secret owner can effectively protect their intellectual property while aiding law enforcement in their investigation. These include:

• reporting the incident;
• providing evidence including documentation and, if warranted, expert evidence;
• maintaining regular communications with law enforcement;
• seeking protective orders from the court; and
• if the misappropriation involves digital theft, co-ordinate with the AFP’s cybercrime units that can trace electronic evidence and identify cybercriminals.

Mediation

Mediation is by far the most common and accessible ADR process used by the courts. It involves an independent third-party mediator (often a registrar or private practitioner) who facilitates discussions between disputing parties. The goal is not to decide who is right or wrong but to help parties reach a mutually acceptable resolution.

Mediations may be court-ordered or voluntarily initiated by the parties. In many cases, the judge will refer the matter to mediation early in the proceedings if there is a reasonable chance of settlement. This referral can be made with or without the parties’ consent.

A registrar usually conducts these mediations at no cost to the parties, making it an economical option. The process is confidential, informal, and tailored to the nature of the dispute. Mediators do not impose decisions; instead, they guide communication, clarify issues, and encourage compromise. Settlement agreements reached during mediation can be made legally binding and enforceable by the Court.

Arbitration

While less common in court proceedings compared to mediation, arbitration remains a recognised ADR mechanism. Arbitration involves the appointment of a neutral third-party arbitrator (or a panel) who hears both sides and delivers a binding decision.

Timing of ADR mechanisms in proceedings

When ADR is introduced into proceedings is just as crucial as the type of mechanism used. In the court, ADR can occur at various stages – before trial, during proceedings, and even in rare cases post-trial – depending on the complexity and nature of the case.

Costs

Court-funded ADR services

The court provides court-based mediation services free of charge, particularly when conducted by one of its registrars. This model is both accessible and cost-effective, removing one of the primary barriers that often deter parties from engaging in formal dispute resolution.

In most matters, a judge may refer the case to a registrar for mediation as part of procedural case management. These sessions are conducted at the court premises or online, depending on location and party preferences. No administrative or booking fees are charged, and mediation documents are usually submitted in a streamlined, informal format.

Private ADR providers

Not all mediations occur through the court. In some circumstances – particularly in complex, high-value commercial disputes such as trade secrets matters – parties opt to use private mediators who bring specialised industry or legal expertise. A private ADR process will include additional costs outside legal fees. For example, a private mediator in Australia will usually charge AUD10,000 to AUD25,000 to attend a mediation, usually shared between the parties.

Despite these expenses, private ADR is often still cheaper than a trial, which can involve weeks of court time, extensive discovery, expert witness testimony, and long preparation.

Another cost consideration is that ADR may shorten litigation, even if it does not fully resolve the case. Narrowing the issues, clarifying facts, or resolving some claims can reduce overall trial time and the associated legal costs.

Interim Measures in ADR Proceedings

Under the Commercial Arbitration Act 2010 (NSW) and its counterparts in other jurisdictions, arbitral tribunals have the power to grant interim measures to preserve the status quo, protect evidence, or prevent imminent harm to the arbitral process. Examples include injunctions preventing one party from selling disputed assets and orders for the preservation of confidential documents.

These measures can be granted before a final award is made and are binding on the parties. However, enforcement still relies on the supervisory power of courts if one party refuses to comply.

Interim Relief From the Federal Court of Australia

In parallel, the Federal Court may grant interlocutory relief in aid of arbitration or ADR processes. A party may apply to the court for an injunction, asset freeze, or other urgent orders if there is a risk of serious damage during the ADR process.