Sleeping Duck asks competitor to ‘give back’ trade secrets

Off the back of a separate legal win, mattress start-up Sleeping Duck is now eyeing texts and documents of its former staff who now work at a competitor.

Sleeping Duck founders Winston Wijeyeratne and Selvam Sinnappan at their warehouse in Mulgrave, Melbourne. Picture: David Geraghty

Mattress start-up Sleeping Duck has targeted text messages, emails and documents of former employees as the company looks to extend its court battle over its “trade secrets”.

Sleeping Duck founders Selvam Sinnappan and Winston Wijeyeratne have lodged an application for discovery against online furniture retailer Eva and some of its staff, requesting they hand over documents relating to Sleeping Duck’s business dealings, financial information and strategic plans.

The application comes after Victorian Supreme Court judge Jim Delany ruled in favour of Sleeping Duck’s founders late last week in a separate case, after angel investor and former mentor Adir Shiffman alleged he was frozen out of their business from a formerly active role in favour of Prateek Bandopadhayay, who ­diluted Dr Shiffman’s stake.

During the Supreme Court trial, it emerged Dr Shiffman — who describes himself as a serial tech start-up founder and investor — is also involved with Eva.

Sleeping Duck’s former chief financial officer Sean Curry and former customer experience director Yoni Paluch are also involved with Eva, Justice Delany noted in his judgement.

Adir Shiffman. Picture: Wayne Taylor / Fairfax Media

“When cross-examined about Dr Shiffman’s involvement in the May 2019 strategy day, Mr Curry accepted the advice being given to Sleeping Duck then was the same sort of advice and concerned the same sorts of matters now being given by Dr Shiffman to Eva, a company Mr Curry accepted to be a competitor of Sleeping Duck in which both Mr Curry and Dr Shiffman were involved at the time of trial,” Justice Delany said.

As well, he said since November 2022, “Mr Paluch has been advising the customer service team at Eva, one of Sleeping Duck’s competitors”.

Eva Sleep Pty Ltd, Mr Curry, Mr Paluch and another staff member, Toby Coutts-Quinn, were listed as prospective applicants on the originating application by a prospective applicant (Sleeping Duck) for orders for discovery, seen by The Australian.

The application was released by the Federal Court on Thursday afternoon, despite being filed on April 12.

Sleeping Duck is seeking orders Eva “give discovery” to them of all documents, including email, SMS, WhatsApp, instant messages (e.g. Slack), or other social media messages “created by, originating from or sent by” either Dr Adir Shiffman, Mr Sean Curry, Mr Yoni Paluch or Mr Tony Coutts-Quinn.

They are seeking documents which refer to Sleeping Duck’s “business dealings, financial information (including internal budgets, projections or results), business and strategic plans (including the establishment and running of Sleeping Duck’s showroom), trade secrets, supplier and customer information, and/or performance statistics”.

Sleeping Duck also want oral statements made by the same people about the same categories, along with documents relating to the launch of the “premium adapt mattress”, the introduction of the “half-half firmness”, a proposed introduction of a physical retail store by Eva and another email.

Sleeping Duck are also seeking Mr Curry’s terms of employment or consulting services engagement between him and Eva.

Lawyers for Sleeping Duck and Eva along with individual staff members named will negotiate the scope of the discovery order, meaning the categories and people named as prospective applicants could change.

Sleeping Duck and Eva are both Melbourne-based start-ups. While Sleeping Duck specialises in mattresses, Eva sells sofas, mattresses, bed frames, tables, pillows and hemp linen, according to its website.

Dr Shiffman and lawyers for Eva declined to comment about the matter. Lawyers acting for the staff members were contacted but did not respond.