Intellectual Property Law
| Author | David TAN PhD (Melbourne), LLM (Harvard), LLB (Hons) BCom (Melbourne); Professor & Vice Dean (Academic Affairs); Faculty of Law, National University of Singapore. Susanna H S LEONG LLM (London), LLB (Hons) (NUS); Professor & Vice Provost (Lifelong Education); National University of Singapore; Advocate & Solicitor of the Supreme Court of Singapore. |
| Published date | 01 December 2019 |
| Publication year | 2019 |
| Date | 01 December 2019 |
19.1 In I-Admin (Singapore) Pte Ltd v Hong Ying Ting,1 the plaintiff (“i-Admin”) alleged that three of the defendants, being ex-employees of the plaintiff and its subsidiaries, conspired to infringe its copyright by taking and using its confidential information to set up a competitor firm in the business of payroll processing. The plaintiff's claims were for copyright infringement, breach of confidence, breach of contract, conspiracy and inducing breach of contract. Aedit Abdullah J dismissed the plaintiff's claims, save an award for nominal damages for breach of contract against Hong Ying Ting.
19.2 I-Admin is a Singapore-incorporated company in the business of providing outsourcing services and systems software, primarily in the areas of payroll and HR management. It began developing the “payAdmin” system comprising its core payroll engine from 2000 onwards. The primary defendant Hong, a former employee of i-Admin, was a general manager in the plaintiff's systems department. The other key defendants were Liu Jia Wei (an ex-employee of the plaintiff's subsidiary i-Admin (Shanghai) Ltd), Nice Payroll Pte Ltd (“Nice Payroll”) and Li Yong, a Chinese national and Singapore permanent resident who invested in Nice Payroll. There was a parallel suit against another employee, but it is not germane to this summary.
19.3 In 2009, Hong and Liu shared their frustrations about the plaintiff's payroll engine, which they both had experience using. They discussed creating a better payroll software and named their proposed project the “Kikocci Project”. During this period, Liu began coding for the Kikocci Project using an online web-based application development tool, Oracle Application Express (“APEX”). The Kikocci Project was designed to be a portal that stored and displayed employee records in different APEX pages and was expected to perform better than i-Admin's system. In December 2009, Hong and Liu incorporated the Kikocci Corporation in the British Virgin Islands. On 18 March 2011, Li and Hong incorporated Nice Payroll, with Li as the only director and 100% shareholder, and the Kikocci Corporation was closed. Li invested $100,000 in paid-up capital and provided a loan of $900,000 pursuant to a Cooperation Agreement dated December 2011. On 30 April 2011, Liu resigned from i-Admin Shanghai, and Hong left i-Admin on 30 June 2011.
19.4 In 2013, i-Admin came across Nice Payroll's website while conducting market research. The plaintiff noted that Nice Payroll advertised itself as providing services and systems similar to the plaintiff's, and that Hong and Liu were its directors. The plaintiff alleged that Hong and Liu had, since 2009, schemed to set up a competing company, the Kikocci Corporation, and worked on the Kikocci Project during their working hours while still employed by the plaintiff, using the plaintiff's resources. They eventually decided to incorporate Nice Payroll with Li, and used the plaintiff's copyrighted and/or confidential materials to develop Nice Payroll's business and software codes. Five claims were made against the defendants.
19.5 In respect of the copyright infringement claim, Abdullah J held that for copyright to subsist in any literary work, there must be an authorial creation that is causally connected with the engagement of the human intellect.2 His Honour emphasised that “a human author must first be identified before the work in question can be deemed to be original”,3 but it is not necessary to name each and every author to make out a claim. The plaintiff must show “that the product was generated from a human author or human authors working alone or collaboratively, ie, the existence of such persons must be clearly established”.4
19.6 On the facts, although i-Admin did not identify specific authors of the source code materials (Category 1), the court was satisfied that they were nonetheless authored by the plaintiff's employees. Abdullah J distinguished this factual scenario from that in Asia Pacific Publishing Pte Ltd v Pioneers & Leaders (Publishers) Pte Ltd:5 there, the facilitative work of the identified employees in gathering and organising the information and data in the tables did not amount to authorship, and the respondents might have been unable to identify the relevant authors as a high degree of automation might have been involved in compiling the tables.6 In respect of the databases and technical infrastructure materials (Category 2), it was held that:7
… even if payitem and CPF information was publicly available, intellectual effort, analysis, industry knowledge, and knowledge of regulatory rules, HR policies and employment best practices were still required to organise the information into a format that was suitable for processing by a computer program …
and the database tables constituted compilations of facts under s 7A(1)(a) of the Copyright Act8 that were original and attracted copyright protection. There were three other categories of materials but essentially the plaintiff failed on all the copyright infringement claims. This aspect of the decision is in line with local and Australian authorities where a human author (or authors) must be identified in factual compilation works published by corporations in order for copyright to subsist.9
19.7 Regarding infringement, Abdullah J held that copyright is only infringed if there has been a copying of a substantial part of the protected works and substantiality in relation to a compilation work:10
… depends on the quality, not quantity, of the material copied; the defendant must have copied or taken the parts of the work that contributed towards the finding of originality. [emphasis added]
19.8 The plaintiff must also establish a causal connection between the copyrighted work and the defendant's infringing work.
19.9 While copyright generally subsisted in the plaintiff's materials and the plaintiff had ownership of the copyright, the plaintiff's copyright was not infringed. While i-Admin showed that the defendants had access to its materials, there was no substantial copying of the plaintiff's software and source codes in the generation of Nice Payroll's various databases, templates, and other files and documents. Although there might have been some similarity between the materials, it did not follow and was not proved that copying had occurred.
19.10 In respect of the Category 1 materials, Abdullah J found the expert testimony provided by the defendants to be persuasive, and held it was:11
… necessary to consider the overall architecture and design of its software to determine whether the plaintiff's copyright in its software had been infringed. This would entail a consideration of the programming language used and the logic of the source code, as well as the database components which the source code drew upon. It was not sufficient to focus on the contents of the database tables alone.
19.11 Ultimately the court found that there were many dissimilar features. What distinguished i-Admin's software was its organisation of its database architecture and its development of its source codes. I-Admin's software architecture was a three-tier application architecture: (a) the software was presented on webpages using JavaServer Pages on the presentation tier; (b) the main application logic was written in Java on the logic tier; and (c) the logic tier interfaced with the data tier (the Oracle database) using Structured Query Language (“SQL”). In contrast, Nice Payroll's software architecture was written in APEX, and Nice Payroll's data, application logic and user interface were stored in and on the Oracle database. Nice Payroll's application development required the application logic (code) to be written in PL/SQL. The difference in programming languages meant that the plaintiff's program could not be meaningfully compared to Nice Payroll's, which used PL/SQL. The court held that “any similarities in Nice Payroll's software and payroll output could be attributed to the functional and statutory requirements that informed what payroll reports should generally contain”.12
19.12 In respect of Category 2 materials, it was held that the differences in the naming conventions and the number and type of hard-coded
19.13 In summary, having compared the copyrighted materials with the allegedly infringing materials, Abdullah J concluded that no substantial copying was proved in relation to the materials in Categories 1 and 2. Although the evidence showed that the defendants had access to some of the plaintiff's materials in the other alleged categories when they developed Nice Payroll's payroll systems, the court could not conclude that there was copying on this basis alone.13
19.14 In I-Admin (Singapore) Pte Ltd v Hong Ying Ting, i-Admin also alleged that three of the defendants, being ex-employees of the plaintiff and its subsidiaries, in addition to infringing its copyright in its “payAdmin” system, had also used its confidential information to set up a competitor firm in the business of payroll processing.
19.15 Abdullah J found that the defendants indeed owed obligations of confidence to the plaintiff, but there was no use of the plaintiff's confidential information in the relevant sense, and dismissed the claim.14
19.16 His Honour reiterated that the elements that have to be established for an action in breach of confidence to succeed are listed in Clearlab SG Pte Ltd...
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