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Adam Hinkleys legal battle

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Tuesday 15 December 1998

Adam's legal nightmare - By NATHAN COCHRANE


ADAM Hinkley would probably like to warn other young people about the perils of starting their own IT business.

But he can't.

The 20-year-old Melbourne programmer is legally restrained from talking to the media or anyone else about his part in a series of events that has reached the Victorian Supreme Court and put enormous pressure on his family.

An injunction within an Anton Piller search and seizure order granted by the court for Canadian company Hotline Communications Ltd (HCL), prevents both Adam and his father, software developer Paul Hinkley, from speaking to us until the case is heard on 17 February.

They have been gagged because the Canadians fear they will release confidential intellectual property and business plans, according to the company's Melbourne lawyer, Michael Wallin.

Court documents reveal that HCL is negotiating with Apple Computer Corporation to bundle the software in educational packages, in a deal estimated at $1 million.

HCL director and second plaintiff David Bordin refused to answer questions from I.T. "That's officially no comment," he said by phone from Canada, responding to questions earlier emailed.

According to Toorak intellectual property lawyer, Roger Velik, gag orders are not unusual in cases where confidential business matters need to be retained.

Velik, who has experience in representing young IT entrepreneurs with new technology, cautions those about to embark on a career in the industry.

"It comes down to these two things - never give away your intellectual property and have the ability to walk away from a deal."

Adam's mother, Eltham school teacher Meg Lehmann, said her son had lost his innocence, and is depressed by the legal restraint on being able to write software programs, as he has done since the age of seven.

"Since all of this has blown up - none of which I'm surprised about because I forewarned him - but you can't tell them," Lehmann said. "They don't tend to take much notice of their mother.

"I think the best way for him is to do what he really loves doing."

The international legal action affecting Adam Hinkley comes after a family tragedy - his sister Ineke was abducted and murdered in October 1996, at about the same time he was negotiating with the Canadian company.

Lehmann believes the murder put enormous strain on the family and may have affected their ability to make rational business decisions.

In dispute is a far-reaching software program Hinkley wrote three years ago when he was 17. Hotline is a communications tool for the Apple Macintosh that circumvents the World Wide Web in allowing users around the world to share and publish information.

The client-server suite became an instant hit with Mac users and spawned a number of knock-off clones, as well as third party versions for Windows, Linux and BeOS operating systems. Hotline drew rave reviews from publications and online sites such as Wired, MacWeek, C|net, CNN Interactive and Tucows.

In 1995 Hinkley began successfully selling Hotline on the Internet, later attracting the attention of Canadian investors. Jason Roks, later joined by venture capitalist Austin Page, made an offer in June 1997 that would be attractive to any 19-year-old - $500,000 in seed capital to set up offices in Toronto and pay for marketing and development.

IN return the investors wanted an equity stake in the technology. The deal was signed on 17 September 1997.

For any young developer with dreams of hitting the big time and joining the ranks of Bill Gates and other successful software entrepreneurs, it was a dream come true. Hinkley moved to Toronto to see his vision taken shape.

But it did not.

Adam claimed later in court affadavits that, in the presence of his father Paul, he was pressured into signing away the majority rights to AppWarrior, the software tools used to create Hotline.

AppWarrior, jointly developed by father and son, is also the foundation of Paul Hinkley's business and a keyboard skills program, eText, he is developing.

The pair allege in an affadavit that the Canadian entrepreneurs verbally agreed to change the clause - after Adam had signed it.

According to his mother, his dream turned to nightmare when, separated from family and friends on the other side of the world and grinding through 12-hour days, six days a week, the development money was not forthcoming.

On 4 March this year, with patience and funds running out, Hinkley returned home to be with family and friends.

This September, Hotline Communications began civil proceedings in the Victorian Supreme Court, alleging that before Adam Hinkley returned to Australia he stole its intellectual property and shut down its operations by destroying files and taking its Web site and commerce systems offline.

Hinkley has admitted in affadavits that he encrypted the code, which he now regrets doing.

He claims it was the only way he could maintain a grip on the company of which he was nominally president. He denies the other charges.

At issue is the source code to Hotline and the custom set of development tools, AppWarrior.

Without AppWarrior, there is no Hotline.

On 11 September raids were simultaneously carried out at the homes of Adam's mother, where he was staying, and his father Paul Hinkley, to search for the source code.

The disruption in the development of the software has angered and disappointed the small but loyal user base it was building.

The nascent community has turned to its own devices to see the application survive.

There are now many clones for the Mac, including Ripcord, Scuzzlebutt, and MfHC among them. Windows hacks are also starting to appear.

Web sites, including The Hotline Conspiracy and Viva hx! give users news and bug reports.

The underground community of Hotline servers continues to multiply, bolting on their own solutions to problems.

According to the editors of The Hotline Conspiracy site, who wish to remain anonymous, the Hotline community has been ``torn to shreds. The seizure of equipment from Adam's home was likely ``justifiable, and Adam should not have encrypted the code, they say.

``Lots of people are siding with Jason Roks, saying that Adam was naive, and many, particularly Hotline veterans, are siding with Adam, a spokesman said.

``Unfortunately, this is a lose, lose, lose situation for all. Hotline Communications takes a development progress hit, Adam loses control over his software as well as the right to develop any new Internet software; and the Hotline user base takes a hit in lack of software updates.

But Adam's mother would like to see a simple solution - Hotline Communications can have AppWarrior and Hotline software, in return for releasing her son and her family from the turmoil. She would like to see the non-competition clause removed, and HCL and her son go their separate ways.

``I think the best thing for him is to have this whole court case behind him as soon as possible, Lehmann said.

``He's got to feel like there's light at the end of the tunnel.


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