Dr Barbagallo (‘Barbagallo‘), a medical practitioner, was an employee, from October 1997 to August 2000, of a group of companies known at times relevant to the case as ‘In Vivo‘ (the name McDougall J used to refer to the entities throughout the judgment).
In Vivo provided services in the pharmaceutical industry related, amongst others, to marketing plans and sales strategies. Barbagallo’s role as ‘business manager’ comprised the duty to prepare sales proposals which In Vivo used to provide marketing services to pharmaceutical companies.
Barbagallo first developed a proposal for a ‘non-adherence’ program to address the issue of patients for whom medication (in this case, ‘Lipitor’) is diagnosed, ceasing to take it, or not taking it at all in the first case.
Barbagallo’s Lipitor proposal (developed with much research and other input from In Vivo) concluded with a confidentiality notice, which purported to confer all intellectual property rights in the ideas expressed in the document on In Vivo. The confidentiality notice ended with a claim to In Vivo’s copyright. Interestingly, no claims to copyright were instigated.
Barbagallo developed two subsequent proposals – the ‘Opticare’ proposal and the ‘Aropax’ proposal; the latter having been pitched by Barbagallo as a result not from having been briefed by the pharmaceutical company, but from Barbagallo’s discussions with an employee of the company (which is now known as Glaxo Smith Kline, ‘GSK‘).
GSK did not engage In Vivo; it instead engaged Barbagallo after his resignation from In Vivo in August 2000.
The Lipitor, Opticare and Aropax proposals
Lipitor: the proposal was highly detailed and included a PowerPoint presentation.
Opticare: the proposal was shorter than Lipitor, although involved commonalities, such as the involvement of pharmacists, medical practitioners, and a patients’ ‘club’ concept.
Aropax: was based on the Lipitor proposal. McDougall J deemed it ‘structurally similar’, and stated that it incorporates ‘through cutting and pasting’, elements of the Lipitor proposal. It also contained the same confidentiality notice as the Lipitor proposal.
In Vivo’s confidentiality claims
In Vivo claimed confidentiality over its proposals (including the PowerPoint presentations, said to be a ‘fundamental part’ of In Vivo’s business) on two bases:
- the ‘template’ theory: viz. that In Vivo ‘developed a particular way, or method, of doing business, which is confidential, and which Dr Barbagallo has exploited for his own approach’ (even though the whole of the material was not confidential, its combination and written expression was alleged to confer on it the necessary quality of confidence for the development of individual adherence programs); alternatively,
- individual items of information in the documents over which In Vivo claimed confidentiality.
The template theory – no confidentiality
His Honour held that the Lipitor proposal was not confidential, the reasons for which include:
- the proposals addressed different drugs to which distinct sets of circumstances (including the conditions upon which a patient may or may not ‘adhere’ to taking medication) apply;
- the proposal had not been used for 10 years, nor had it been used after the Aropax proposal;
- ‘cut and paste’ techniques do not equate with a structure being a confidential aspect of know-how;
- evidence of a structure being a precedent is not synonymous with its being confidential.
The alternative claim for confidentiality – not upheld
In Vivo’s alternative claim for confidentiality residing in specific items of information was not upheld.
- In Vivo did not identify the material with a sufficient degree of precision; and even if it had done so,
- In Vivo did not give evidence as to the confidential nature of the ‘residual’ material.
- Proving the necessary quality of confidentiality in information is a high onus to discharge. Simple concepts of precedent documents or ‘cut and paste’ mechanisms are insufficient to demonstrate this, which is a crucial reason for the next logical point, being:
- Think globally when protecting your intellectual property. Rights of action which offer less ‘rigorous’ redress to infringement of your rights typically buttress the ‘hard line’ causes of action such as breach of confidentiality. Here, restraint of trade provisions may well have operated to protect In Vivo’s developed precedents where the high threshold requirements of proving confidentiality were not met;
- From a general litigation perspective, alternative causes of action should be prosecuted with as much vigour as those principal to a plaintiff’s case. Seemingly straightforward concepts, such as unequivocally demonstrating to a Court the material over which confidentiality is claimed, are often (as were in this case) overlooked, to the detriment of In Vivo and apparent frustration of McDougall J (with his comments that there was before him ‘some hazy and indistinct realm of inormation’).