TPG's cloud arm wins small victory in stolen data lawsuit

Update: The lawsuit has been discontinued and settled on "confidential terms" in June 2015. 

The cloud services arm of TPG Telecom has won a small victory in an ongoing legal battle with rival Core Desktop over the latter's alleged use of confidential business data to steal customers.

Trusted Cloud this week successfully defeated an application by Core Desktop that claimed evidence provided by the TPG subsidiary should be thrown out of court because it had been gained through unauthorised access to a Core Desktop server. 

The legal battle began in in August last year when Trusted Cloud launched an intellectual property lawsuit against Core Desktop.

Core Desktop was registered as a business in November 2012, with a then-Trusted Cloud employee, Michael Papaconstantinou, appointed sole director and secretary.

In December that year, Papaconstantinou resigned from Trusted Cloud, and was followed by fellow Trusted Cloud managers Michael Amira and Yong Chen, as well as infrastructure enginer Kyle Fraser and field network engineer Andrew Quach, in the following months.

Trusted Cloud claims its five ex-staff used confidential business information to poach as many as nine Trusted Cloud customers - such as the Melbourne Institute of Plastic Surgery (MIPS) and United Petroleum, among others - over to Core Desktop.

MIPS informed Trusted Cloud it would be terminating the partnership towards the end of July 2014, during which time it was allegedly preparing to engage Core Desktop as its new provider.

According to court documents, two weeks later Trusted Cloud discovered Core Desktop had installed super flexible file synchroniser (SFFS) software on MIPS's Trusted Cloud-run virtual servers and was copying files containing sensitive business information, the company alleged.

The SFFS was used to sync data to a server with a remote IP address that later turned out to be a Core Desktop server.

Trusted Cloud said the information taken included cost pricing, revenue, employee plans and Microsoft license keys.

Core Desktop employee Andrew Quach later admitted to installing the software in order to synch the data from the Trusted Cloud server to his company's NAS drive.

He had been able to do so using admin details given by Trusted Cloud to MIPS to allow the organisation to access the Trusted Cloud virtual server and install and maintain MediWiz software.

Following the filing of the lawsuit last year, Judge Katzman of the Federal Court ordered that Core Desktop be restrained from using, transmitting, disclosing or reproducing any of the copied documents.

She also ordered that the company be restrained from altering, deleting, removing or destroying any of the copied or related documents.

But Core Desktop fought back, arguing that Trusted Cloud had accessed its password-protected server without authorisation while investigating the synchronisation software, and the case should therefore be thrown out based on how the file list evidence was obtained.

Judge Katzman yesterday dismissed Core Desktop's application.

She also revised her previous orders and instructed the company to immediately hand over any documentation taken from Trusted Cloud to its own solicitors for safe keeping.

The company has until March 6 to file its defence, and Trusted Cloud's original application will be heard on March 9.