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The appeal of the judgment against me and Duncan Ross in the restraint of trade case brought by IceTV  (IceTV vs Ross) was heard on the 22-23 July 2010 before Justices Sackville, MacFarlan and McColl.

We submitted that Rein J erred when he found that “I think it is clear that Mr Ross and Mr Vogel’s work in preparing the Clever Networks grant application was work that they were doing because of their technical and industry knowledge, which IceTV could have replicated had it been given the opportunity.” We said that the law is clear that it is illegal to restrain application of “technical and industry knowledge”. It was up to the Plaintiff (IceTV), we said, to prove special circumstances that would make such a restraint enforceable, an onus which we say they failed to discharge.

Several other key questions about restraints of trade were debated, including our position that you can’t restrain against soliciting merely prospective customers.

Another proposition I put to the Court of Appeal was that the restraints were void for uncertainty because the contracts said the restraints were to operate for 12 months “or such other lesser period as may be judged by a court of competent jurisdiction on being reasonable in the circumstances”.  The authorities make it clear, I said, that if the restraints leave it to the Court to decide what is reasonable, there has been a “mainfest failure to to attempt to make the restraint a reasonable restraint” (quoting from the Restraints of Trade Act)  and that the Court should find the restraints void.  IceTV’s Queen’s Counsel, John Ireland, argued the second part of the definition of the restrain period was severable, removing any indeterminacy.

Coincidentally, a week after the appeal hearing, Prof. Joellen Riley University of Sydney – Faculty of Law, published a paper “Commodifying Sheer Talent: Perverse Developments in the Law’s Enforcement of Restrictive Covenants” which said in relation to IceTV v Ross “The sheer injustice of enforcing a restraint when the employer had no use for the labour itself is breathtaking.”  Dr Riley’s full article is available here.

The appeal judgment is likely to take some time, but we hope it will go some way to advancing Prof Riley’s call that “the law on restrictive covenants in employment contracts in Australia should be reviewed, to re-enliven the ancient common law doctrine making illegal restraints of trade that are contrary to the public interest in free movement of workers, and free development of innovative ideas and practices.”

Watch this space.

Peter Vogel

IceTV has won the first round of its restraint of trade action against us (Duncan Ross, Peter Vogel and Vogel Ross Pty Ltd) and we are now preparing for a lengthy appeal.

After nearly three years of court proceedings, the Supreme Court of NSW found that we breached our employment agreements with IceTV, the company we worked for from 2005-2006.

In the process, a lot of information that IceTV’s Directors might have wished to keep to themselves became public and has started popping up in the trade press.

The background to these proceedings are summarised below in this blog, and also this article by an Australian professor of law.

The court accepted our submission that the restraint provisions of the employment contracts under which we were sued were too broad to be enforceable. Although the Court “read them down” to make them narrower it still found that we had breached them by working for Mobilesoft.

We were certainly surprised by this judgment. We presented what we thought was an irrefutable case that the restraints in our employment contracts were outrageously broad and if interpreted as IceTV proposed would prevent us from earning a living in our field of expertise. We also gave evidence that we were not trying to compete with IceTV and that by no stretch of the imagination could Mobilesoft be considered a competitor. In fact, the evidence shows that we hoped that IceTV would be the EPG supplier in any deal we managed to pull off.

Sadly, this matter is unfortunately still far from finalised. We have filed a Notice of Intention to Appeal and are will ask the Court of Appeal to reverse the decision of the court below.

Until the matter is finalised we naturally cannot go into details, however the full judgment, which can be found on the Supreme Court of NSW website, makes very interesting reading, particularly for anyone interested in the development of the restraint of trade doctrine in Australian law.

We have also filed a cross-claim against IceTV and the three individuals who were directors at the time IceTV started the action. The cause of action is basically “oppression” under the Corporations Act as we were, and continue to be, shareholders in IceTV.

We believe the hearing of the appeal, and the outstanding cross-claim, will answer many of the disturbing questions raised by proceedings to date.

An article in the July 2008 issue of Lawyers Weekly makes some interesting observations about principles involved in the case IceTV has brought against me and Duncan Ross. The article, “Innovation put on ice?” by Professor of Law at UNSW Joellen Riley, draws links between two disputes over intellectual property – Nine alleging IceTV infringed their copyright, and IceTV’s subsequent claim that Duncan Ross and I, former IceTV executives, breached “non-compete” agreements.

Professor Riley says: “The upshot of the litigation was that Nine’s insistence on its ownership of copyright in something so mundane and transient as a TV program schedule led – indirectly – to the sterilisation of the talents of two innovators in entertainment media technology for a not-insignificant period of time”.

As this case is still grinding its way through the NSW Supreme Court after more than a year, I will not comment on the details of the case but I found the article exceptionally thought provoking.

You can read the whole article here : Innovation put on ice?

Some of our clients will have been surprised to receive communication from us in July apologising that we could not carry out projects for them due to”legal questions” awaiting resolution. This was not related to the Channel Nine lawsuit, but a different matter which found us in court again. This blog gives some background to this situation.

Followers of this blog will know that Duncan Ross and I were laid off by IceTV in October 2006 and have no association with IceTV any more, other than being minor shareholders.

Duncan and I decided to form the consultancy company Vogel Ross Pty Ltd, in particular to take advantage of our expertise in the “new media” field.

Our client base has included IceTV themselves, to whom we consulted through the Nine Network Hearing. One of our main clients was Mobilesoft Australia Pty Ltd. Mobilesoft had developed a movie rental system using a digital set-top-box.

Mobilesoft had completed this system to trial stage before we left IceTV and they contracted me and Duncan to evaluate the system prior to launch, scheduled for later this year.

As the STB has PVR capabilities (ability to receive and record TV) we urged Mobilesoft to use IceTV’s EPG with it.

In February Duncan, on behalf of Mobilesoft, contacted IceTV to discuss the opportunity.

A few days later, Duncan and I received a letter from IceTV’s lawyers reminding us of our employment contracts, which they say prevented us from competing with IceTV for 12 months. The letter noted that we had “provided services to Mobilesoft Limited with respect to a set-top-box for [brand deleted] which would utilise IceTV secret know how and processes and would be in direct competition to the products and services provided by IceTV”. The letter also included other allegations.

We advised IceTV that their fears were misplaced and that far from competing, we were in fact bringing potential business to IceTV.

Subsequent letters and meetings failed to resolve the matter and on 3rd July 2007, the Supreme Court of NSW granted IceTV’s request for a temporary injunction preventing me or Duncan from “until 4 October 2007, carrying on or otherwise being engaged or involved in any business similar to or competitive with the business of the plaintiff carried on during the twelve month period prior to 4 October 2006, including the development and/or pursuit of the commercial opportunity of media content provision to set-top-boxes, Personal Video Recorders or similar devices” as well several other provisions.

That is why we had to abruptly terminate our work in the media or set-top-box field. On 28th September we took the matter back to Court and in light of further evidence we presented, IceTV was ordered to provide security for our potential costs and the injunction was dissolved.

The 12 months from our termination at IceTV has now passed and we are now free to undertake projects in any field. We will of course continue to observe our ongoing confidentiality obligation to IceTV.

We greatly appreciate our clients’ patience and moral support during this difficult time. We are now ready to get back to work and are actively seeking new projects.