Sealegs competitor runs aground in copyright case

Orion system installed on Stryda Marine boat fails on sea trials

Sealegs has won a massive copyright case against a competitor formed by ex-Sealegs staff.

NBR reports on the substance of the case: Quote:

A High Court judge has found Sealegs International had its copyright infringed by Orion Marine, Smuggler Marine and various other people associated with the rival business.

In ruling in favour of Sealegs, Justice Paul Davison found its former employees, Darren Leybourne and Vladan Zubcic, had appropriated the core of the Sealegs system when they set out to create an amphibious system for Orion after leaving Sealegs.

Sealegs had already won an interim injunction restraining engineering firm Orion, as well as boatbuilder Smuggler Marine, producer of a vessel using the Orion system, from marketing the rival system. It will now be able to seek damages or an account of profits from Orion.

Sealegs’ amphibious system features retractable legs, which enable boats to be driven over land and into and out of water. It was created by Maurice Bryham in 2000 and has since achieved commercial success, Thursday?s court judgment says.

Orion was created in 2012 to compete with Sealegs, by Mr Leybourne and another defendant, Yun Zhang. Mr Zhang had been a homestay student with Mr Leybourne?s family when he was a student and later discussed with Mr Leybourne setting up the company and moving to New Zealand on an entrepreneur’s visa. He told the court he had permanent residency from 2017.

Mr Leybourne said he had received the judgment only last night and would take some time to consider it with his legal advisers before deciding whether to appeal.

“It’s obviously not what we expected,” he said.

Sealegs has since been renamed Future Mobility Solutions. Its chief financial officer David McKee Wright, former chief executive of Sealegs, was not immediately available for comment. End quote.

So, some ex-employees walked out the door, got a guy to fund them and ripped off the designs of the systems. Now they’ve lost the case and copped massive damages and costs against them. Quote:

In its claim Sealegs said Orion?s design infringed copyright because it used a three-wheeled system similar to its one.

Justice Davison found that, while that some parts of Orion?s design were different, they were mostly ?design details? and did not involve changes or substantial difference to the Sealegs design.

?I regret to say I found the evidence of Mr Leybourne, Mr Zhang and Mr Zubcic lacking in credibility as regards their explanation of the development of the Orion design and their claim that they did not found the Orion design on the Sealegs pattern.?

?Mr Leybourne?s and Mr Zhang?s account of the origins of the Orion business and just when they decided to go into business manufacturing amphibious systems lacks cogency and is in my view implausible.?

He says Mr Leybourne had become critical of Sealegs? senior management and he had acquired a detailed knowledge of its system and its functioning and noted that the defendants did know about Sealeg?s patent but were more focused on that than any copyright.

The judge made an order that Orion can?t sell any of its infringing system and arrangements have been made to determine damages. Sealegs also sought an order that Orion produces all of its infringing products so that they may be destroyed but that request is subject to another hearing.

Future Mobility Systems said in its most recent annual report that it had spent $1.02m on the litigation for the year to March 31, 2018. Shares traded at 13c this morning, having slipped 19% over the past year. The company said in a statement it was pleased with the outcome.?End quote.

What will be interesting falling out of all this are the immigration implications for Mr Zhang, who used his investment into the now stolen designs to obtain his residency status.

The designs stolen and then modified certainly don’t appear to work as well as the Sealegs system as Whaleoil has obtained exclusive pictures of a failed sea trial where a boat using the Orion system ended up on its side on a rather gentle slope sandy beach.

Orion system installed on Stryda Marine boat fails on sea trials

So, their designs don’t work and neither did their legal arguments. A failure all round.


CIV-2016-404-2256 Sealegs v Zhang & Ors Substantive Judgment by Cam Slater on Scribd