Auckland architect accused of stealing trade secrets

Architect Michael Davies is accused of stealing trade secrets... except he doesn't know what a trade secret is. Photo / Sam Hurley

Nobody can seem to agree what a trade secret is, yet an Auckland architect is accused of stealing them from his former firm. Sam Hurley reports from his trial.

What is a trade secret?

It's a question which has been seemingly answered in New Zealand's Crimes Act but continues to be repeatedly asked of witnesses this week in the Auckland District Court.

Many do not know.

A 46-year-old architect, meanwhile, has been accused of stealing them from his former firm.

But even he, despite hearing nearly two weeks of evidence, is confused.

Charged with nine counts of stealing trade secrets for a pecuniary advantage, Michael Davies continued to give evidence for a second day yesterday.

"I didn't know what the definition of a trade secret is - I still don't know that I do," the English-born Davies told the court.

Crown prosecutor Sam McMullan, however, continues to do his best to explain.

He recites parts of section 230 of the Crimes Act - the rare offence of "taking, obtaining, or copying trade secrets".

He said a trade secret "has the potential to be used industrially or commercially and is not generally available in industrial or commercial use".

It also has economic or potential economic value, while "all reasonable efforts to preserve its secrecy" have been made, he continued.

Such secrets are what McMullan alleges Davies stole - in potentially more than 1600 files - when he left Context Architects for another job at rival firm Design Partners in early 2017.

As he walked out the door, Davies allegedly pinching Context Architects' annual business plan, project files and pricing models which included details of contract negotiations with Housing New Zealand.

He is also accused of stealing the firm's ArchiCAD computer drawing template, project plans for school developments and the project file for a residential development in Albany.

While Davies concedes he took some of the files, his defence counsel, Guyon Foley, told the jury his client wasn't stealing trade secrets.

"Computer software and hardware used to put Neil Armstrong on the moon ... To my mind that's a trade secret isn't it?" Foley said.

"Important, confidential, commercially sensitive ... think of the words, trade secret - secret."

Foley also called on fellow architect James Serviceto help explain.

Service gave evidence about the types of files Davies allegedly stole, including the template for the ArchiCad digital 3D modelling software.

Service's opinion was the "Context template does not amount to a trade secret".

He said such material was "commonly available in the industry".

Michael Davies has been on trial for the past two weeks, accused of stealing trade secrets. Photo / Sam Hurley

Founding director of Context Architects Lisa Hinton, however, has a different opinion.

She believes the files, template and designs were not only her firm's intellectual property but her trade secrets.

"We've never had such a large data theft before," she earlier told the court.

Davies was once one of Hinton's leading architects after being appointed a principal architect in July 2016, the court has heard.

"He was a very good architect," she said of her former employee.

But after her company alerted police to the alleged file heist Davies was arrested in October 2017.

"I downloaded them all for a reason … I know I wasn't supposed to. I guess, where does it go from here?" Davies told police in an interview, the court has heard.

But he has claimed "there was nothing secret" in what he took for his own personal use, professional liability and portfolio of work.

"I never had an intent that was crooked or dishonest, the act itself is, but there was never any intent," he said.

Closing arguments in the trial are expected to be heard today .