Qudos and Infosys at war over copyright

Banking Day staff Authorised deposit-taking institutions

A long-running wrangle between Qudos Bank and Infosys Limited may play out in the public domain, after a Federal Court judge ordered that the Sydney-based mutual was entitled to discovery of more documents on the supplier’s side.

Qudos – the former Qantas Staff Credit Union – informed members in last year’s annual report of difficulties with an overhaul of its banking platform, but said nothing of an escalating legal row.

“We engaged an international technology provider to deliver a new core banking solution, which was due for delivery in October 2017,” the bank wrote in the report.

“The technology provider has been unable to deliver that solution.”

Qudos Bank is exploring potential claims of copyright infringement, breach of contract and misuse of confidential information by Infosys.

The bank commenced preliminary discovery proceedings against Infosys in November 2018, seeking documents in support of its concern that Infosys may have misused Qudos’ intellectual property and confidential information in developing software for another mutual ADI, Australian Military Bank.

Justice Stephen Burley, in a judgment on Monday, sketched out background on the case, while holding back from making any findings of fact.

“In 2012 Qudos commenced a major digital transformation project, one aspect of which was to develop an integrated banking platform,” he wrote.

“In February 2015 Infosys was selected as the technology supplier [and] in March 2015 the parties entered into the Master Banking Services Agreement, which set out the terms on which Infosys was engaged to develop and implement the project.

“Later, a third party contractor, HeathWallace Australia Pty Ltd was engaged by Qudos to undertake the design of the user experience and user interface for the new platform. In March 2016, HeathWallace commenced design work in collaboration with Qudos.

“This work was completed and delivered to Qudos as a ‘stitched website’.

“Qudos contends that [the website and related components] are literary works, artistic works and computer programs within the definitions of these terms in the Copyright Act 1968 and that by virtue of its contractual arrangements with HeathWallace it is the owner of that copyright. Qudos also maintains that the information obtained by HeathWallace in the preparation for the development work, and the fruits of that work, concern confidential aspects of its business.”

Justice Burley explained that “Qudos is concerned that Infosys has engaged in conduct that infringes copyright in these materials, that it has acted in breach of confidence and that it has acted in breach of various contractual provisions in the Master Banking Services Agreement.”

In about August 2017, Burley wrote, “Qudos became aware that Infosys had been engaged by AMB to assist in the provision of core banking, online banking and mobile banking solutions.

Qudos raised its concerns about apparent similarities between the Qudos and AMB prototype websites with Infosys, and he parties met in February 2018.

On 27 February 2018 Qudos served a dispute notice which triggered the dispute resolution procedure under the Master Banking Services Agreement. This concluded unsuccessfully in April 2018, although the parties continued to attempt to resolve the dispute until June 2018.

In October 2018 Qudos purported to terminate the Master Banking Services Agreement and Infosys accepted the termination, without admission of fault. Mediation failed, leading to the current proceedings.