Singapore High Court dismisses claims for breach of confidential
information and copyright over machine that cleans discs used in the
manufacture of hard disk drives.
The Plaintiff, Invenpro, and the Defendants, JCS Automation and JCS
Echigo (“JCS”), are both manufacturers and suppliers of cleaning machines
known as batch scrubbers. Batch scrubbers are high precision cleaning
machines that clean discs (the hard disk substrate) used in the manufacture
of hard disk drives. As the slightest contamination can render a disc
unusable as a hard disk, this cleaning process is of paramount importance
during the hard disk manufacturing process. Moreover, as the hard disk
manufacturing industry is one that is niche, two of the main players, Western
Digital Corporation (“WDC”) and Seagate, were common customers of both
Invenpro and JCS.
In June 2009, Invenpro commenced an action in the High Court against JCS
alleging that JCS had made unauthorised use of Invenpro’s confidential
information and copyright documents in its production of batch scrubbers.
JCS denied both claims and argued independent creation of the batch
scrubber as, like Invenpro, they had gone through a similar consultative
process with their common customer, WDC, to whom the batch scrubber
JCS counterclaimed that Invenpro had made a defamatory statement to
another common customer, Seagate, to the effect that JCS had made an
unauthorised use of Invenpro’s confidential information in manufacturing the
batch scrubber for Seagate. The 9-day long trial was presided over by the
Honourable Judicial Commissioner George Wei, a well-respected and
renowned expert in intellectual property law with more than 30 years of
experience in the field. Rodyk acted for JCS in the action.
Findings of the High Court
The Court dismissed the breach of confidence and copyright claims by
Invenpro as well as the defamation counterclaim by JCS.
In coming to its decision, the Court affirmed the trite legal principles that for
an action in breach of confidence to succeed, the information must possess
the necessary quality of confidentiality, the information must have been
imparted in circumstances such as to import an obligation of confidentiality
and there must have been unauthorised use of the information and
Firstly, the Court in analyzing the evidence put forward by JCS concluded
that the individual features Invenpro claimed confidentiality in were either public knowledge, a matter of common sense, or generally dictated by WDC
(or Komag, WDC’s predecessor). Although the Court opined that Invenpro
could assert a claim that the solutions it had come up with to improve the
batch scrubber design (from WDC’s original design), in particular the
combination of features, possess a quality of confidence, the Court
reasoned that it did not have to come to a conclusive answer in this respect
as there was neither a duty of confidence owed by JCS nor unauthorised
use of Invenpro’s confidential information by JCS.
The claim was brought by Invenpro on the basis that JCS was an indirect
recipient (i.e. the information was passed by WDC) of the confidential
information. To import an obligation of confidentiality in equity, JCS, as the
indirect recipient of the information, must have knowledge that a serious
claim for breach of confidence has been made by Invenpro against WDC.
On the evidence, the Court was not satisfied that, even if JCS was given
confidential information belong to Invenpro, JCS knew at the material time
that such access constituted unauthorized use of confidential information.
JCS therefore did not owe Invenpro an obligation of confidence.
However, the principal basis for the Court’s dismissal of Invenpro’s claim
was that Invenpro had not established an unauthorized use of its confidential
information in the first place.
Although it was typical for plaintiffs in cases involving misuse of confidential
information to have to rely on circumstantial evidence and “finger prints” to
establish copying or unauthorised use, this did not change the standard of
proof to be met. The mere fact that there exists a suspicion of access and
copying is insufficient to establish a case of breach of confidence on the
balance of probabilities. On the facts, there was no direct evidence that JCS
had been given access to any document which contained details of the
Although an inference of copying may be established by proving access
coupled with sufficient objective similarity, the strength of the inference will
depend on the nature of the access and the degree of similarity. In this
regard, the Court was not satisfied that the overall mix of similarities in
details and concepts were sufficient to establish copying given the evidence
of the design process that JCS went through. The Court thus ruled that
Invenpro had failed to establish copying and instead found the evidence to
be suggestive of independent creation by JCS.
On the issue of Invenpro’s “thinly pleaded” copyright case, the Court found
that JCS neither had any access to any copyright materials owned by
Invenpro nor did Invenpro sustain a case for indirect copying. The evidence
adduced by Invenpro was insufficient to establish that JCS was provided
with access to the copyrighted works. Further, since WDC had requested for
specific components to be used in the production of the respective batch
scrubbers and many of the components were obtained “off the shelf”, the
natural result was a degree of semblance between both parties’ batch
scrubbers. Invenpro’s claim for indirect copying by JCS similarly failed as
Invenpro had failed to demonstrate a causal connection between its
copyright documents and JCS’ alleged infringing article. In any case, the Court reiterated its finding that JCS’ batch scrubber was of independent
creation and design.
JCS’ counterclaim for defamation was dismissed as the Court held that the
contents of the letter in question were not defamatory. Although there was
publication of the statement in question to Seagate, the Court opined that
purpose of the letter was to put Seagate on formal notice that JCS’ batch
scrubber incorporates Invenpro’s confidential information and to reserve
Invenpro’s rights. Therefore, looking at the letter as a whole, the statement
was merely a warning to Seagate informing that an action has been
commenced against JCS (with whom Seagate also has a commercial
relationship) and that Seagate may be implicated.
While this case has not fundamentally changed the law of unauthorised use
of confidential information or copyright, it is a timely reminder that knowledge
of a breach of confidence by the indirect recipient of the information is
required for equity’s intervention. A party cannot expect the long arm of
equity to intervene in cases where the party allegedly in breach has no
reason to know or even suspect that the information he is in possession of is
another party’s confidential information. As a pre-emptive measure and
notwithstanding the practice of signing non-disclosure agreements,
businesses should clearly put its customers to whom they are divulging
sensitive information to on notice that the information provided is not to be
disclosed to any third party.