Auckland architect Michael Davies is in a small group of two people in NZ to be convicted of a rare and unusual crime. Photo / Sam Hurley
Auckland architect Michael Davies is in a small group of two people in NZ to be convicted of a rare and unusual crime. Photo / Sam Hurley
An Auckland architect convicted of stealing trade secrets appears to be just one of only two people ever found guilty of industrial espionage in New Zealand, Weekend Herald investigations reveal.
Ministry of Justice records released to the Weekend Herald under the Official Information Act show five previous prosecutions over allegationsof trade secrets thefts.
But, just one earlier case has ever been proven and resulted in a conviction.
That Auckland case saw a term of imprisonment imposed in September 2004, the ministry's archives show.
In would not be until this year that a second person, Michael Davies, would be convicted of stealing trade secrets.
The English-born architect was sentenced yesterday in the Auckland District Court after a jury decided he had committed the rare crime.
The 46-year-old was charged with nine counts of stealing trade secrets for a pecuniary advantage and was found guilty of eight. On the ninth charge Davies was found not guilty.
However, in its research, neither the Weekend Herald, nor Davies' lawyer Guyon Foley or Crown prosecutor Sam McMullan, were able to find further public details about the 2004 case and conviction.
The ministry's records, however, show other trade secrets cases have been heard in Whangārei, Pukekohe, another Auckland case, and Gisborne.
The last trade secrets case disposed of before Davies was charged was the Gisborne case in 2011.
None of those cases, however, were proven by the prosecution.
The ministry's data counts 11 charges laid under section 230 of the Crimes Act - taking, obtaining, or copying trade secrets.
All were laid between 2004 and 2009, nearly a decade before the allegations were levelled at Davies.
Foley said the crime was introduced into New Zealand law at the start of the 21st century as part of a "Western worldwide initiative to protect [intellectual property] from theft and threat of theft".
The trade secrets law was introduced in 2003 and the maximum penalty for such a charge is five years' imprisonment.
"Essentially it's the criminalisation of industrial espionage," Foley said during Davies' sentencing.
He said his client was "a test case" for New Zealand law.
The court heard Davies stole "thousands" of computer files from his old firm Context Architects as he left for another Auckland firm, Design Partners, in early 2017.
He stole the company's annual business plan, project files and pricing models which included details of contract negotiations with Housing New Zealand.
He also took the firm's ArchiCAD computer drawing template and the project file for a high-density residential development in Albany.
In sentencing, Judge Eddie Paul said Davies' data heist must have been premeditated.
"It is not a momentary lapse in judgment where you press the button on your computer once," he told the architect.
Founding director of Context Architects Lisa Hinton. Photo / Context Architects
The theft also destroyed the trust he once had with his former boss, Lisa Hinton, the founding director of Context Architects.
Davies had more than two decades of experience working on commercial, residential, hospitality, civic and naval architecture projects.
Hinton considered Davies a "very good architect" and appointed him a principal architect at her firm in mid-2016.
"For us this felt like a betrayal. We had always treated Michael with respect and goodwill," Hinton said in a statement.
When Davies was farewelled from Context Architects his workmates had shouted him a long lunch and celebrations at the office.
But now Hinton feared Davies' intellectual property theft may have seen a loss in trust by her firm's clients.
"This journey has had a huge impact on us personally, on our team and our business," she said.
"We have felt like we were the ones on trial."
Judge Paul agreed with her and said Davies' legal team had fired criticism "squarely at the victims of this offending".
Foley had accused Hinton and Context Architects of wanting to "make an example" of Davies.
"That has undoubtedly been achieved."
He said during the trial there were other ways to settle the case rather than in the criminal courts.
Defence lawyer Guyon Foley said the Michael Davies trial was "a test case" for New Zealand law. Photo / Sam Hurley
Davies had claimed "there was nothing secret" about the files he said were taken for personal use, professional liability and for his own portfolio of work.
"I didn't know what the definition of a trade secret is - I still don't know that I do," Davies told the jury.
Foley also questioned the definition.
"Computer software and hardware used to put Neil Armstrong on the moon ... To my mind that's a trade secret isn't it?
"The definition has probably expanded - Kentucky Fried Chicken, Coca-Cola."
Davies is now volunteering his time with the Salvation Army and as part of his sentence will complete 220 more hours of community work with the charity.
Judge Paul, who also ordered him to serve a short term of community detention, said: "Frankly, he's probably the most overqualified volunteer they've ever had on their books."
Being an architect was a job Davies loved and excelled at, Foley said.
