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NSW Commercial Law - Is Data Considered Part of Database?

Discussion in 'Commercial Law Forum' started by WallyM, 23 July 2016.

  1. WallyM

    WallyM Member

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    A couple of questions for you clever guys.

    A while ago, I was running a small business. Things weren't going so well and I decided to close. Just before I closed the business, I contacted a person that I heard might be interested in taking it on, but he told me he wasn't interested.

    So I mailed out a letter to all of my customers informing them that I would be closing down. I received a number of them back "return to sender - not at this address" - screwy or old data in my database.

    Well, imagine my surprise when about a month later I started receiving more "return to sender - not at this address" mail (for the same addresses). When I opened this mail, it was surprised to read that it was from the guy who earlier wasn't interested in purchasing my business or stock. In the letter, he stated, "We have re-opened with a new name".

    The thing is, when I closed the business I took all the computers home with me. The only way he could have got this data was from the previous owner (who incidentally put me onto him in the first place). The previous owner developed the database system and had a clause written into the contract of sale that they wanted to keep ownership of the database.

    So, I suppose my first question is: Is the 'data' considered part of the 'database' under commercial law?

    I would have thought that the 'database' includes things like the metadata, the schema, etc., but the actual data within it (customer and supplier lists, etc) would be part of the 'goodwill'.

    Do I have a case for a quantum merit claim against this 'new' business?

    Do I have a case for making a claim against the previous owner as they sold (or gave away) something of mine (the data) that had some commercial value?

    Does it matter that this happened some time ago?

    Thanks guys
     
  2. Rod

    Rod Well-Known Member

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    How long ago?

    Do you still have the evidence?

    Suspect your claim is against the old owner, not the new, although did you get the 'new owner' to sign a non-disclosure agreement?

    There's an argument to be made the old owner cost you the sale of the business though timing may be an issue here if everything between the new owner and the old owner took place well after you closed the business.

    re: Ownership of data. This may depend on the sale agreement with the old owner. Normally the customer records go with the business and he may retain the IP in the database. Sometimes even the IP goes with the sale.
     
  3. Sophea

    Sophea Well-Known Member

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    I would imagine it makes sense that the data forms part of the database in that context, since what use is the database without the data. If it was just the software he meant then it would have been described as such.

    That's why it pays to have a lawyer review your contracts. ;)
     
  4. Rod

    Rod Well-Known Member

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    FYI a database can be a perfectly good application he can use elsewhere (eg in another business), the customer data is not needed.
     
  5. Al_M

    Al_M Member

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    In my view, the data is yours and if someone takes that data, you have a claim. Just because it is loaded into different software doesn't mean they didn't take what was yours. If the contract said the old owners wanted the database, this is different to the data.
     

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