Invenpro (M) Sdn Bhd v JCS Automation Pte Ltd

Judgment Date27 February 2014
Date27 February 2014
Docket NumberSuit No 525 of 2009
CourtHigh Court (Singapore)
Invenpro (M) Sdn Bhd
JCS Automation Pte Ltd and another

[2014] SGHC 38

George Wei JC

Suit No 525 of 2009

High Court

Civil Procedure—Pleadings—Plaintiff failing to plead clearly confidentiality in combination of features—Whether pleadings sufficient so as to not deny claim in combination of features

Copyright—Primary infringement—Whether any direct or indirect copying—Copyright Act (Cap 63, 2006 Rev Ed)

Tort—Confidence—Plaintiff backdating non-disclosure agreement with client—Clauses in e-mail between plaintiff and client allegedly ceding intellectual property rights—Defendants producing batch scrubber similar to plaintiff's machine—Whether plaintiff retained any rights to confidential information—Whether features or combination of features possessed quality of confidence—Whether any unauthorised use by defendants—Whether obligation of confidence owed by defendants

Tort—Defamation—Plaintiff issuing letter to defendants' client—Whether statement defamatory

The plaintiff (‘Invenpro’ or ‘the Plaintiff’) was a Malaysian company specialising in the provision of engineering solutions in the field of hard disk manufacturing and cleaning. The first defendant and the second defendant were related companies incorporated in Singapore (collectively, ‘the Defendants’), and were direct competitors of the Plaintiff in the business of manufacturing and supplying cleaning equipment and services for the hard disk manufacturing industry.

The Plaintiff had a working relationship with Komag Incorporated, a leading manufacturer of magnetic thin-film discs for computer hard disks, and had manufacturing facilities in USA, Japan and Malaysia, and had produced a number of machines for them. Komag Incorporated was later acquired by Western Digital Corporation (‘WDC’), who engaged the Plaintiff to upgrade and refit one of its batch scrubbers.

WDC later also approached the Defendants sometime in 2007 and requested a tender for the modification of WDC's batch scrubber cleaning system. To assist the Defendants, WDC provided a set of documents titled ‘Batch Scrubber Design Review’ by Dan Vander Wyst which was dated 18 July 2006. This had likewise been shown to the Plaintiff as well.

The Defendants later produced a batch scrubber of its own. The Plaintiff then alleged that these batch scrubbers embodied many of the alleged confidential features of the Plaintiff's own batch scrubber. In this manner, the Defendants were said to have used confidential information belonging to the Plaintiff. The Plaintiff also alleged that the Defendants had copied their copyright documents in producing the batch scrubber. The Defendants counterclaimed in defamation, for an alleged defamatory statement made by the Plaintiff to Seagate to the effect that the Defendants had made an unauthorised use of Invenpro's confidential information in manufacturing the batch scrubber for Seagate.

Held, dismissing the claim and counterclaim:

(1) The burden fell on the claimant to identify with reasonable certainty the nature and scope of the information that was said to be confidential. The claimant could not simply plead a bare assertion that there was confidential information capable of protection because of the expenditure of effort, labour and capital. The ultimate question at the end of the day was whether the Plaintiff's pleadings were sufficient. Looking at the pleadings as a whole, whilst the point could have been made clearer, the Plaintiff's pleadings were sufficient to enable it to pursue its claim of confidentiality by reference to a combination of the features. It would not be unfair or improper for the Plaintiff to seek to rely on the combination of the features as a whole: at [125] to [127] .

(2) The basic elements to an action for a claim in confidentiality were well known. First, the information had to possess the necessary quality of confidentiality. Second, the information had to have been imparted (or received) in circumstances such as to import an obligation of confidentiality. Third, there had to be unauthorised use of the information and detriment: at [129] .

(3) Information would possess the quality of confidence so long as it remained relatively secret or relatively inaccessible to the public as compared to information already in the public domain. This was primarily a question of public accessibility. Information did not have to be inventive to possess the necessary quality of confidence. Information could be confidential as a whole even though the component parts were in the public domain. However, the information also had to be sufficiently well developed, and included asking whether it had been developed to the point where it acquired some commercial attractiveness: at [130] .

(4) An obligation of confidentiality could arise in equity even without a contract. Equity was also able to intervene and impose a duty of confidence on the remoter recipient provided that he had knowledge of the breach by the direct recipient. Once there was knowledge that the information originated from the claimant, this in itself would be sufficient to give rise to actual or constructive knowledge/notice of the breach. An objective approach was helpful in testing the knowledge of the remoter/indirect recipient. The remoter or indirect recipient would only be liable for unauthorised uses which occurred after he had sufficient knowledge to support the imposition of a duty of confidence: at [131] , [133] and [135] .

(5) Whether there was indeed unauthorised use of the confidential information was largely a question of fact. Where what was confidential was the combination of features as a whole, it was necessary to show that the defendant has indeed made use of that combination. On the other hand if the confidential information resided in specific points of detail (as opposed to general principles or concepts), it was necessary to show that these points were used by the defendant (as opposed to being independently recreated or rediscovered): at [136] .

(6) In order to succeed, Invenpro would have to first show that they were responsible for the ingenuity of the improved Komag batch scrubber (‘the 2006 Improved Komag Batch Scrubber’) and that cll 22 and 26 of the purchase orders did not apply. Whilst the matter was not free from all doubt, the evidence as a whole supported the view that Komag would have been aware of at least some of the problems and issues with the original Komag batch scrubber. Invenpro could, however, still assert confidentiality in the solutions: at [144] and [147] .

(7) The non-disclosure agreement (‘the NDA’), at the end of the day, was a contract expressing how the legal relationship between parties should be governed. In the discussions of cll 22 and 26, it was clear that when both parties referred to the NDA ‘superseding’ cll 22 and 26, it was obviously in reference to the fact that Invenpro was not willing to part with any intellectual property rights that they might own. Parties accepted that in such an industry, the ownership of IP rights was an important thing, and Invenpro would not have ‘acquiesced’ with cll 22 and 26 but for Komag agreeing that the NDA should supersede those clauses. That said, the critical issue was not really the validity of the NDA but rather, what agreement the parties struck in reference to cll 22 and 26. Cast in that light, the reference to the NDA was simply a reference to what the parties thought should be the governing position between them - that parties would own their own intellectual property rights in respect of any collaboration. Clauses 22 and 26 therefore did not apply to prevent Invenpro from asserting any rights of confidentiality it might have in the 2006 Improved Komag Batch Scrubber: at [155] and [157] .

(8) There was no need to come to a conclusive answer as to whether certain features or a combination of features of the Invenpro's machine possessed a quality of confidence, as Invenpro did not succeed on the other issues (establishing a duty of confidence and unauthorised use by the Defendants): at [161] .

(9) The evidence adduced by the Plaintiff was simply insufficient to prove any form of copying or wrongful use. There was no direct evidence that the Defendants had been given access to the 2006 Improved Komag Batch Scrubber or the documents said to contain details of the confidential information, such as the technical drawings and the operation manual. While Ng stated that Chong verbally informed him that information belonging to Invenpro was passed to the Defendants during a factory visit sometime in 2008, the authenticity of the statement was in dispute and Ng accepted that Chong denied making that statement. In the end, the Plaintiff was left to merely submit that it was quite possible that information had been handed to the Defendants. In these circumstances, the evidence as to the Defendants given access to the confidential documents belonging to Invenpro, in the absence of testimony from Chong, was weak and highly contentious at best. The evidence was not such that it could be relied upon by the court in reaching any conclusion on access and copying, at least on a balance of probabilities: at [171] , [176] , [179] and [183] .

(10) The question remained as to whether there was a sufficient basis for the Plaintiff to claim that copying, as opposed to independent development, was established on the basis of circumstantial evidence. On a balance of probabilities, the Plaintiff had failed to establish copying by the Defendants. The evidence was suggestive of independent creation: at [184] to [187] .

(11) In any event, it was still necessary for the Plaintiff to prove that the Defendants were under an obligation of confidence. Even if the Defendants by some manner came across or were passed confidential information belonging to Invenpro, and then used it in developing their machines, the evidence before the court was not...

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