The Western Cape High Court rules in favour of global South African manufacturer of poultry feed-conveying products who suffered a loss in profit before tax of an estimated R180 million because of an employee forming a syndicate to hack its system for nine years, stealing over a thousand copyright protected engineering drawings.

Technical Systems (Pty) Ltd, a South African company that supplies almost half the world with poultry feed-conveying products, has emerged victorious after a prolonged copyright case against a former employee who has now been proved to have substantially infringed the Copyright Act 98 of 1978 by hacking its system for nine years, stealing over a thousand copyright protected engineering drawings, removing all its confidential information, replicating a production plant with its intellectual property, and competing unlawfully against it for roughly 15 years.

The company manufactures its own drive units that are used in a feeding system

The court case, which spanned seven years, resulted in the defendants not only being ordered to desist from continuing manufacturing, but also for a court-supervised attachment and destruction of all records from computers and all other electronic devices. The defendants were also ordered to pay damages and Technical Systems’ legal costs. In addition, Theuns Kühn, Founder and Director of Technical Systems, has confirmed there is a docket in waiting for the criminal prosecution of the main defendant and his former employee, Christiaan (Chris) Kurtz, at the NPA (National Prosecuting Authority), based on the judgment of this trial by Justice Mark Sher. “It is imperative that the prosecution take its course,” says Kühn.

According to the court judgment the damages are still in the process of being quantified but, according to Kühn, Technical Systems paid over R40 million in legal fees since 2014 and suffered losses in turnover of at least R90 million due to unlawful sales by the defendants to its customers. In addition, the company was forced to lower its prices because of the unlawful competition, resulting in a bottom-line loss of roughly R120 million. Kühn estimates the loss in profit before tax to be R180 million for the period 2009 to date, including costs, making this arguably one of the biggest copyright cases in South Africa.

Kühn says: “The defendants in this case formed a criminal syndicate, hacked our company e-mails for nine years, stole more than a thousand copyright protected engineering drawings, removed all our confidential information, replicated a production plant with our intellectual property, and competed unlawfully against us for a decade and a half now.”

He describes the ruling as “such a relief.”

“Justice is served. After so many years of tension and uncertainty amongst us, my family and staff can now sit back and relax again. I am extremely grateful to our staff, witnesses, our legal team, Judge Sher, the Western Cape judiciary and court, and all parties involved,” Kühn said.

The Western Cape High Court on July 29, 2024, handed down a damning judgment finding that the company’s designs were copied by former employee, Christiaan Kurtz, employed by the company from 2001 to 2009, who not only copied, but manufactured similar parts of the feed equipment, and went into unfair competition with them, going as far as approaching their clients and offering the products at a more competitive price. Evidence of this was produced in court through computers and hard drives, email records, and witness testimony.

The feed chain is a conveyor belt that transports, amongst others, chicken feed in a trough.

Technical Systems supplies about 40% to 50% of the world market, exporting approximately 98% of the feed chain it produces. About 40% of its production goes to Europe, 10% to the USA, 15% to South America (mainly Brazil), 15% to the Middle East, and about 20% to China.