The core business of a pool hall is charging customers for the use of a playing table. This hire fee may be applied as an hourly rate, or as a fixed fee per person for a set duration. The chargeable time commences when the table light is turned on, and stops when the light is turned off. The lighting system is thus crucial to the successful operation of the business.
One of the Cue Club owners, Bubner, invented an innovative lighting system used exclusively at the Cue Club. This system was so good that more than one person attempted to claim it, sell it, or steal it.
In 1993 the electrical equipment in virtually every pool hall was of similar construct. Behind the counter was a PC running a program to record the time of a session, and a bank of switches to operate the table lights. When a customer requested a table, the operator would press a key on the PC to initiate the charging time for that table, and then flick a switch to activate the light over the appropriate table. The reverse process would occur when the customer finished the session. A very simple but essential part of the business.
Most of the installation cost of the lighting system is in the electrical cabling. A PC might cost a few thousand dollars, and the purpose-written software a few thousand more. However, 240V cabling must be run from each table back to the switchbox at the counter. A typical pool hall would require about 600 metres of cabling. Edyosavan Pty Ltd did not obtain quotes for the cabling work. It did not have to. From the very start one of the owners, Bubner, had a good idea.
The conceptual thinking behind this idea is the intellectual property of Bubner, and remains confidential. As far back as September 1993 Bubner took his idea to an experienced electronics technician, Allan Talbot. Out of Bubner's innovation and Talbot's experience crystallised the digital lighting system, and only they are fully conversant with the operation of the system. In practice the switchbox and hundreds of metres of cabling are eliminated. Instead, one keystroke on the PC initiates the timer function and activates the light. One keystroke. Very simple. Very functional. The clever country at work.
After obtaining council approval in June 1994 to establish the Cue Club, Talbot was approached to build a full scale prototype. This required components costing about $1,200, which was paid by Edyosavan Pty Ltd. The prototype was actually installed in the Cue Club, and after some minor adjustments worked exactly as intended. Talbot was not remunerated for his work; rather he opted to retain an interest in the system should it be developed further. Ownership of the system was vested equally in the three contributing parties - Bubner, Talbot and Edyosavan Pty Ltd.
Sophisticated software was needed to run the digital lighting system. Damon Hatchett was commissioned by Edyosavan Pty Ltd to write the code. This program, called 'The Cue Club Program', was 100% owned by Edyosavan Pty Ltd. It performed three vital functions:
The PC and associated software was not linked to the till. This meant that the cash flow for table hire was recorded by two independent mechanisms; the till records, and the information written to the PC hard drive. Reconciliation of the two data streams would quickly identify any inconsistencies between the calculated takings and the actual takings.
One of the owners, Bubner, was experienced in computer programming for data visualisation. On his own PC he wrote a number of simple programs in BASIC language to read the session details from the usage files and create colourful graphs. This software, the intellectual property of Bubner, was redundant to the operation of the business. It provided a means of viewing session times, or trading figures, in graphical format rather than numerical format. Over time these programs, about ten in all, were installed on the PC at the Cue Club.
In summary, the whole gamut of software and electrical gadgetry at the Cue Club comprised of :
The Cue Club opened for business in October 1994. Just seven months later the night shift manager, John Reynolds, made claims that he had "installed.....a computer system at the Club" and "...organised a computer programme and switching programme for the Club". These claims, mischievous at best and defamatory at worst, formed part of a vexatious unfair dismissal case launched against Edyosavan Pty Ltd. For reasons unrelated to these claims, the case was settled out of court in September 1995.
In October Reynolds made threats against Bubner, demanding he hand over a copy of the Cue Club Program. Bubner ignored these threats. A week later a half-brick was thrown through the windscreen of Dornan's car with such force it bent the steering wheel. At the time the vehicle was parked outside Bubner's residence. It was subsequently determined that the half-brick originated from Reynolds' property.
The following month Reynolds took his campaign of harassment to a new level. Threats and half-bricks had not delivered the Cue Club Program, so now he turned attention to the digital lighting system. On 3 November Bubner received a letter from Murie & Edward, solicitors who acted for Reynolds during the unfair dismissal fiasco. Correspondence was also directed to Talbot, who constructed the digital lighting system. Although completely ignorant of the operation and ownership of the system, Reynolds correctly deduced that the individuals most closely involved in the development of the system were Bubner and Talbot. The letter is reproduced below:
Dear Sir,
JOHN REYNOLDS
We confirm that we act for John Reynolds.
We have received instructions from Mr Reynolds that pursuant to an agreement between our client and yourself in your personal capacity and not as a representative of the Cue Club, you and our client would have 50% ownership in the switching system.
The relationship between our client and yourself has irretrievably broken down and it appears that this will be a serious impediment to the marketing of the switching system.
Our client has made certain enquiries and believes the switching system does have some commercial value. We suggest that the matter be resolved on the following basis:
(a) our client assigns to you all his rights and interest in the switching system for suitable consideration; or
(b) you assign your interest in the switching system to our client for suitable consideration and our client thereupon licences you to use the same.
Our client would like to see the matter resolved on an amicable basis but if the matter cannot be resolved then it appears that our client and yourself will be involved in some serious litigation. This firm does not normally engage in copyright litigation but we will be engaging Mr Stephen Owen-Conway QC if the matter cannot be resolved on an amicable basis.
We look forward to receiving a proposal for the resolution of this matter within 21 days.
Yours faithfully,
MURIE & EDWARD.
Reynolds' modus operandi was simple. He had previously instructed Murie & Edward to take what is best described as a pack of lies to the Industrial Relations Court, and walked away with over $6,000. Now he was trying the same stunt all over again. But this time he did not have draconian elements of the unfair dismissal legislation on his side.
Bubner interpreted this letter as fatuous dribble, and initially decided it was not worthy of reply. However, he was conscious of the way Reynolds exercised his tantrums with violence. It seemed Reynolds desperately wanted to steal, amongst other things, some of Bubner's intellectual property. In reply Bubner sent a carefully worded letter to Murie & Edward :
Dear SirsRE : JOHN REYNOLDS
In reply to your correspondence dated 1 November 1995, I wish to point out that I am unaware of any such agreement between myself and your client in respect of a 'switching system'.
If your client is interested, I am in a position to make available the BASIC data-handling software component of the system displaying table usage ("BASIC PROGRAM") . This purpose-written program has been undergoing development over a two-year period, and as such has considerable associated research and development costs. I will supply the BASIC PROGRAM to your client on the following basis:
(a) Exclusive rights in return for payment of A$46,000.00; or
(b) Exclusive rights in return for payment of A$38,000.00 and a licence to operate the software at one site.
Please note that the source code is included. It is hence possible to modify and adapt the software to virtually any system configuration. As you are no doubt aware, professional purpose-written software packages can cost many thousands of dollars for the executable module only. The source code is generally 'Not for Sale' at any price. In consideration of the flexibility of the software and the enormous potential commercial value I believe this is a very fair and reasonable offer.
Please advise me by no later than 1st December 1995 of your client's decision in respect of this offer as negotiations are in progress for sale of same to other interests.
Yours faithfully,
G.J.BUBNER
In this letter Bubner refers to one of his own redundant graphing programs that convert numeric information to graphical information. This is clearly defined by the repeated reference to the BASIC language. It is a display program, one of a suite of programs, that by itself is useless. The remainder of the letter describes generic information common to all BASIC software. Reynolds or Murie & Edward, bereft of technical expertise, couldn't understand the letter and took no further action.
After this exchange there were no more threats, half-bricks or lawyer's letters. The senseless repercussions of the unfair dismissal case came to an end. But an equally sinister element with a closer association to the business would emerge.
In February 1999 the accountant for Edyosavan, Peter Martin, presented an invoice to the company for his accounting services. This invoice revealed that Dornan and Martin had engaged in three secret meetings during June and July 1998. At no time was Bubner advised of these meetings, nor was any documentation made available as to the reason for, or conclusions or resolutions of, these meetings.
At this time the relationship between Bubner and Dornan had irretrievably broken down due to repetitive and systemic offences against the Corporations Act by Dornan, as outlined in Piper-Alderman. Sensible dialogue with Dornan was impossible. Bubner approached Martin for an explanation of the secret meetings. His reply contained disturbing and startling revelations:
In answer to Graham's queries relating to meetings with Kevin on 25th and 30th June 1998 and a further meeting with Kevin which resulted in my forwarding an ASIC booklet to Kevin, I can clarify the following:-
The meetings attempted to clarify to Kevin directors' obligations regarding the non disclosure when commercial advantage was in question. The issue resulted from Kevin questioning a commercial enquiry which related to that of company property i.e. it's switching system. These meetings resulted in me ringing the ASIC and requesting a book be forwarded to Kevin which addressed the above issues on nondisclosure.
This document confirms that unknown third parties had registered an interest in the Cue Club's digital lighting system from a commercial viewpoint. Dornan decided he would engage in discussions without making the matter known to the other director (Bubner) or owners (Bubner and Talbot). Hence he approached Martin for advice on director's nondisclosure. Nondisclosure is an offence where commercial advantage is concerned, but Dornan apparently decided to get some advice from ASIC, using Martin as the intermediary to avoid direct contact. Dornan decided the cost of all this - the secret meetings and the material from ASIC - would be met using company funds.
Equally disturbing is the reference to the switching system as company property. Dornan was fully aware that ownership of the digital lighting system was vested in three equal parts between Bubner, Talbot and Edyosavan Pty Ltd.
It is unknown if any part of the digital lighting system has been unlawfully transferred to another party by Dornan, or what consideration Dornan may have received. Regardless, Martin's reply raises a number of questions:
It is likely these questions will never be answered.
The Cue Club continues to operate today. The principals of the holding company, JG On Cue Pty Ltd., are possibly of the opinion that they have assumed ownership of a unique digital lighting system. They are probably unaware that what they own is the one third interest formerly belonging to Edyosavan Pty Ltd. Legally, nothing has happened to remove or dilute the two thirds' interest still held in equal parts by Bubner and Talbot.
© 2001 Australian Securities & Intelligence Services. All Rights Reserved. This work is copyright. It may not be downloaded, reported or copied in any form whatsoever without the express written permission of Australian Securities & Intelligence Services.
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The Invention