New Aim successful in Federal Court over stoush with ex-employees and e-commerce competitors

New Aim successful in Federal Court over stoush with ex-employees and e-commerce competitors

New Aim founder Fung Lam.

E-commerce giant New Aim has been handed a win today by the Federal Court, with injunction orders made to stop former employees sharing and using confidential supplier information with two of the company’s competitors.

The orders, which also include an injunction over Sun Yee International and Broers Group to cease using and reproducing New Aim’s copyrighted material in sales promotions, are part of a recent legal battle between the e-commerce company and three former employees alongside the two competitors.

The injunctions today will prevent Sun Yee International and Broers Group from using confidential supplier names and details allegedly obtained by former employees in January and March this year.

Founded by two-time Australian Young Entrepreneur of the Year Fung Lam, New Aim is an e-commerce player that distributes goods all over the country. He also runs dropshipping platform Dropshipzone and in-house Shopify app Sofortig.

New Aim took action against three former employees and the two competitors in September of this year, alleging the first respondent, Mr Man Hung (Jack) Leung, shared confidential company information pertaining to the identity and contact details of the Melbourne-based company’s Chinese suppliers to competitors when he left New Aim in January.

It was also alleged that other ex-New Aim workers, Mr Lei (Ray) Xiao and Ms (Jenny) Li Yingxue, may have engaged in similar behaviour. Today's order of an injunction did not include any ruling over whether Mr Leung, Mr Xiao or Ms Yingxue did actually share confidential information with either of the two corporate respondents.

Further, New Aim submitted the companies that allegedly received information from the former employees, e-commerce retailer Sun Yee International and its supplier Broers Group, breached copyright laws by reproducing and remixing promotional material advertising certain products.

In a Federal Court judgment today, Justice Moshinsky sided with New Aim and issued an injunction, agreeing that the information allegedly given to the competitors by Mr Leung had the “hallmarks of confidential information”.

In making his decision, Justice Moshinsky agreed with New Aim’s submission that the work the company does to maintain supplier anonymity, as well as the efforts they go to in order to ensure the goods are of high quality and fit for the Australian market, makes the identities and details of the suppliers reach the threshold required to be “confidential information” under the law.

“I’m also satisfied that New Aim has a prima facie case that Broers and Sun Yee International have breached equitable obligations of confidence,” Justice Moshinsky said.

“The identities and details of New Aim suppliers and their status as reliable suppliers of high-quality goods suitable for the Australian market have the hallmarks of confidential information.”

As such, the injunction will prevent both Sun Yee International and Broers Group from using the information that is confidential - specifically, this means any information about suppliers that New Aim used in January 2021 and March 2021; the dates that two of the three former employees left the company.

As this will likely have a financial impact on both Sun Yee International and Broers, New Aim has agreed to cover damages for any losses arising from the injunction.

“As it is a very substantial company, there is no reason to think that it would not be able to satisfy any order that it pay compensation pursuant to the undertaking as to damages,” Justice Moshinsky said.

Justice Moshinsky also ordered an injunction against the respondents forcing them to stop using New Aim imagery allegedly reproduced and altered by the other parties, noting there was a “strong prima facie case of copyright infringement based on the evidence currently before the court”.

“The evidence relied upon by New Aim on the present application strongly suggests that its images have been reproduced by Broers and Sun Yee International," Justice Moshinsky said.

“In my view, the balance of convenience favours the grant of an interlocutory injunction to restrain the further reproduction, publication or communication to the public of the relevant images.”

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