On Friday last, 08 October, Mr Justice Feeney delivered a landmark judgment in favour of the defendants in the case of Koger Inc and Koger (Dublin) Limited v HWM Financial Solutions Limited and Others. This judgment is the most significant decision having impact on the IT sector in Ireland, as it addresses the law relating to former employees' entitlement to establish and develop a competing product.
In the proceedings, which commenced in 2008, the plaintiffs alleged copyright infringement and breach of confidence. Central to the plaintiffs' claim was an assertion that the defendants' competing product had been developed in an excessively short time period and to a quality that could not have been achieved other than by access to a copy of the former employer's product. However, the Judge held that the plaintiffs' evidence to support such a claim was based upon flawed deduction and reasoning. In particular, the Judge stated that "the deductive inference which the plaintiffs asked the Court to make makes no real allowance for the knowledge, experience and expertise of the individual defendants and the persons working with them." The Judge pointed to the failure on the part of the plaintiffs' witnesses and experts to make any sufficient allowance for the manner in which the persons developing the competing product were able to carry out their work – i.e. in a constructive, co-operative and dynamic environment - in contrast to the working environment within the plaintiff companies.
Mr Justice Feeney in dismissing the plaintiffs' claims, also held that an examination of the defendants' competing product, given its fundamental differences to the former employer's product, established that it is not an adaptation of the former employer's product for the purposes of the Copyright and Related Rights Act 2000 or otherwise.