Contract Drafting Tips Series: Restraint of Trade Clause

A restraint of trade clause seeks to restrict the freedom of a person to trade or deal in specified ways with assets, information or third parties. It can apply during a contractual relationship and also for a period after its termination or expiry.

This article is part of our series on drafting tips for contract clauses.

The law is that a restraint of trade is contrary to public policy and unenforceable unless the restraint is reasonable in the parties' interests and also in the public interest: Attwood v Lamont (1920) 3 KB 371.

The typical situation we see is when a company, employer or employee calls us in a panic for advice on a restraint. It's best to check restraints earlier than this.

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Does your business have an effective digital media footprint?

What does it take today to create or improve your corporate or business digital footprint? Is reaching business elites part of your target?

As a solicitor working with content for 25 years and with digital media  since 1983 I've learned a thing or two about digital media law as well as creative and commercial considerations. The question is: what works today for business? If you are pressured for time then make this sentence your mantra: The digital media footprint and functionality a business or corporation needs requires ideas and a plan. Following are free ideas, call and we can discuss a plan.

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Commercialisation of IP and IT products for Australian children

The habits of teenagers often stay with them for life. Music was one of my addictions as a teenager. It inspired me to write Music formats and law: commercialisation of 45-rpm records.

A recently released Australian Government survey contains good statistics on the habits of young people today and their use of digital media. It is relevant for developers, distributors and financiers of intellectual property (IP) products for teenagers and young adults. It is useful for commercialisation or IP valuation of a social media website, educational site, online game, software program, or other IT product.

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Is there an engineer in the house? Australia's IP future.

When I go to a party alone and the host finds out I'm a lawyer I often hear: "Oh, so and so over there is a lawyer, let me introduce you to her." My fantasy is to reply with this: "Thank you. But is there an engineer in the house? You see, the work of engineers inspires me.

Engineers create intellectual property (IP). Sadly the kudos, social status and money too often go to others, at least in Anglo-Saxon countries. We are pondering this theme as Australia's 2020 ideas summit approaches - http://www.australia2020.gov.au. We seek an escalator to the future, better still a road and a road map.

Engineers can build IP roads and road maps to the future. They deal with substantive IP. Their work can invent or create a market

In contrast most people in business, including often we IP lawyers, work with merely late stage representational IP. We merely paste IP law decoration or packaging onto products or services, eg by making a brand a registered trade mark. This rarely creates new markets. It's not blue ocean strategy.

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IP strategy for R&D: keep records like Thomas Edison

Making money from R&D and intellectual property is based on documents.

I learned this in 1983 on the first day of my first job as Legal Officer for Angus & Robertson Publishers, Australia's oldest book publisher.

A colleague pointed to three tall and very heavy fire-proof filing cabinets in a hallway. She then said: "The publishing contracts with authors in there are the foundation for the wealth of this company over the last 100 years."

This post ends with practical suggestions for improving record keeping. I'll first discuss why it is vital in business to make records (which here includes preparing documents).

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13 legal tasks for starting a business

When starting a business it is best to work with a fairly comprehensive list of prioritised things to do.

The list in this article reflects my 30 years of experience as a business lawyer. The list applies to most businesses, recognising however that there are industry by industry variables.

For example, some businesses require regulatory licences, eg for people in a trade or in a food preparation or sale business.

Additionally, some businesses should prioritise finalisation of written intellectual property licences or assignments, eg for acquisition of the rights to a business name, logo or business system.  

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Six good questions for building wealth with intellectual property

Venture capital looks for great intellectual property (IP). So do many providers of seed capital, including angel investors like friends and family.

A single IP asset or right is rarely a silver bullet, be it a patent, a trade mark, a specific trade secret or some other IP.

Your IP will be more attractive to financial backers if you work on constantly perfecting a bundle of IP legal rights instead of daydreaming about a one shot silver bullet.

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Design IP to beat parallel importation

I'm wearing a white Ralph Polo business shirt with blue pinstripes. It has a blue embroidered polo player logo. A relative bought it for me as an "out of season" design from an outlet store in California, probably for a price far cheaper than anywhere in Sydney.

Noric Dilanchian Video on Legal Design


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Australia's common law near abroad

Twelve months ago I asked a friend, a visiting barrister from London, a question. I asked: "Do the courts in England sometimes quote Australian judgements?" He replied: "England has judges whose legal minds can be extraordinary; and there are so many of them. Why should they refer to the court decisions in Australia!"

I had no quarrel with his reply. I was just curious as to the practices of judges in England.

So what countries are citing the judgements of Australian judges if not judges in England? This question did not occur to me again, until today.

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Law with graphics and software

In the age of the internet and other computer networks, the lack of graphics to simplify law, let alone public software tools, remains remarkable.

The legal sector's fixation on text alone, leads to data smog, information obesity, and information overload.

This became the case years ago in business law. Now it is commonplace in numerous fields of law, eg insolvency, corporations, and employment law.

Fighting legal information obesity

The good news is that it is inevitable that the situation will change. We've been saying this for years at out firm (see the further reading list). But the change is very slow!

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Successful partner visas overcome the 12 month rule

Partner visa applications take up about 25% of Australia's migration intake. There are two types. Firstly, Spouse Visas (for married or de-facto heterosexual couples). Secondly, Interdependency Visas (mainly for gay or lesbian couples).

To apply for a Spouse Visa for a married couple, the marriage has to be recognized under Australian law. It does not have to be conducted in Australia.

The rules for de-facto couples and gay or lesbian couples are very similar. Generally both require the couple to have lived together for 12 months. The 12 month rule and the exceptions to it are discussed in this article.

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15 Australian venture finance success stories

Start-up ventures typically attract investors in several finance rounds or liquidity events. To illustrate, the table in this article tracks 15 Australian companies that raised venture finance. They include Seek, JB Hifi, Austal, Vision Group and Mincom.

These companies received funding during 1999-2006, a period covered by a survey assessed by PriceWaterhouseCoopers and AVCAL in their 30 page report titled Economic Impact of Private Equity and Venture Capital in Australia 2006.

The table illustrates the use of business finance, equity investment, ASX floats and government grants to achieve in Australia and abroad.

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Domain hijacking

Safeguarding your domain name and related intellectual property should be a high priority for your business.

Unscrupulous opportunists troll the internet looking for businesses, both well known and not, checking for unregistered misspellings, similar domain names, or expired registrations. There are many scams.

One example that comes to mind is the Woolworths-owned Dick Smith Electronics. Its main website is dse.com.au. However it was discovered in 2007 that another version of their business name had not been registered by the company, and had been turned into a pornography portal.

To avoid such problems make timely decisions about domain names and IP protection.

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Six permanent residency rules for couples or partners

In the year ending June 2007, Australia granted permanent residency to 161,000 migration applicants. About 25% of them came in as partners of Australians. These include de-facto, gay and lesbian partners.

1.  At what time can a partner visa be lodged?

A partner can be either overseas or in Australia at the time of lodging a migration application with the Immigration Department.

The time an Australian partner visa application can be lodged varies. It depends on the nature of the partner relationship.

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Australia's first 11 in performance and valuation

Every day people examine news, sharemarket performance and other factors looking for signs and explanations for shifts in valuations for companies, businesses and assets.

Their search leads to mountains of books, articles and electronic data feeds. Only a few sources are insightful, reliable and free of bias. Even fewer focus on Australia.

One useful book on increasing company performance and valuations is The First XI. It is written by four Australian authors who have either an academic or consulting background or a combination of both. The lead author is Professor Graham Hubbard, currently Head of Adelaide Graduate School of Business. Hubbard.

Prof Hubbard and his co-authors apply rigour to answer this question: What is it that winning organisations do which gets them above-average performance over the long term?

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