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Siemens Industry Software Inc. (formerly known as Siemens Product Lifecycle Management Software Inc) v Inzign Pte Ltd [2023] SGHC 50
Employee installed unauthorised version of Siemens’ commercial software on a company laptop for his work without permission. Siemens sued the company for copyright infringement. Court held the company vicariously liable for the employee’s infringement but not directly or primarily liable.
In Asia Petworld Pte Ltd v Sivabalan s/o Ramasami [2022] SGHC 128, the General Division of the Singapore High Court (Philip Jeyaretnam J) analysed certain categories of information to determine if they were subject to implied general confidentiality obligations post-employment. The Court affirmed a key principle that the knowledge and experience that an employee acquires during his employment is not protectable confidential information post-employment.
I’ve been researching on choice of law issues in the metaverse.
Second Life is sort of a beta-metaverse, where people lived, made love and transacted virtually through avatars. Facebook’s proposed #metaverse is just an Augmented Reality (AR) enhanced version of the concept.
I stumbled on this eyebrow-raising litigation concerning Second Life.
A study found that more than half of employees steal confidential company information when they leave their employment. Data taken include customer email addresses and contact lists. Some of these may include personal data.
Employees can use stolen data to solicit clients or trade secrets to develop competing products or services. Some have tried to sell stolen data online for millions of dollars. Such conduct may harm the company’s reputation, trade connections and business interests. The company may also be deemed to be in breach of data protection legislation.
I’ve written about this issue elsewhere. Here’re further thoughts on it.
Insert robust confidentiality clauses in employment contracts. It should be drafted bespoke to your business context to ensure it covers the type of confidential data your business deals with. Note that there are legal nuances about the scope of such clauses which affect their enforceability.
Confidentiality clauses should be drafted alongside non-solicitation, garden leave, termination and forfeiture provisions to ensure they harmonize and work together to protect the company.
Develop & implement written policies on data management, security and access.
Ensure that such policies are read, briefed and explicitly acknowledged by all employees.
Access to, and admin control of, highly secret or sensitive data should be restricted to select categories of employees.
Personal email accounts, storage devices, cloud storage applications should be prohibited. Provide company-controlled storage devices and cloud storage solutions.
Just before an employee’s termination, their company devices should be immediately returned. If there is a suspected data breach, do not conduct your own checks on the device as you may accidentally overwrite evidential data. There may be subsequent allegations raised about the chain of custody of the evidence.
Instead, consider sending it to an external IT forensic expert to conduct the review. If there are internal skilled IT personnel who are able to conduct such a forensic investigation, ensure that this is done by such personnel with their every activity logged.
The forensic investigation should be able to reveal if data has been emailed, copied, transferred or deleted.
Some IT forensic service providers include:
https://www.infinityforensics.com/
http://www.rp-ds.com/#!/our-services
https://www.rsm.global/singapore/service/advisory/digital-forensics-investigation
https://www.am-investigators.com/investigator-services/
https://private-investigator-singapore.com/digital-forensics-singapore/
There are IT solutions which enable you to detect when large amounts of data have been transferred or copied out of any company device.
Set the company VPN or intranet network to disable access to commonly used cloud storage applications like Dropbox, Box and Google Drive.
For employees who have tendered their resignations and are serving out their notice period, consider conducting a spot check on their company devices and accounts while they are still employed with the company. Check their access to data on cloud or shared servers or drives for unusual activity. If necessary, place them on garden leave.
A review of devices and accounts, suspension of accounts, and suspension of account-connected devices such as smartphones should be conducted on the last day of employment.
You will need to act fast in preparing the evidence and court papers to apply for an urgent interim injunction or court order to stop the ex-employee from further wrongful use or disclosure of the confidential data. (It is interim in the sense that it is temporary until the entire matter has been resolved.)
Other commonly sought orders in an interim injunction include:
The aforementioned interim injunction is part of the main civil claim that a business can bring against its ex-employees.
In the main civil claim, the company may claim, in addition to a permanent injunction, for monetary damages or an account of the profits. An account of profits is an order to disclose the profits made by the defendant, and to pay to the claimant such amount, derived from the wrongful use of the confidential information.
As regards damages, the claimant may claim for:
A breach of confidence per se may not amount to a criminal offence. However, if there is unauthorized access to computer systems, it may be criminal.
You may wish to report the matter to the police. The police may consider it a private civil matter. However, in some situations, especially where it concerns regulated industries like banking and finance, the police will take action. For example, in 2008, 7 ex-employees of Citibank stole customer data and left for rival bank UBS. They were charged under the Computer Misuse Act and banking customer secrecy provisions in the Banking Act.
If personal data may have been taken, you will need to assess whether the data breach notification obligations in the Personal Data Protection Act 2012 are triggered. There are certain deadlines to such assessments and notifications. Broadly, the criteria for data breach notification is significant harm to affected individuals (based on class of personal data) or significant scale (500 or more individuals).
Businesses would want to swiftly respond to data breaches by courting customers or employees who may have been poached, assuring remaining customers about their data, and patch any gaps in their data security or management processes.
In legal disputes concerning these circumstances, the following legal issues are commonly fought between parties.
A confidentiality obligation may apply because of an express contract term or under the general law of equity.
If it is based on an express contract term, the issues which follow is the scope of the term and the interpretation of the wording.
If it is based on the general law of equity, the Singapore Court of Appeal in I-Admin (Singapore) Pte Ltd v Hong Ying Ting and others [2020] SGCA 32 has held that the court must first consider two prerequisites:
a. whether the information in question has the necessary quality of confidence about it; and
b. whether it was imparted in circumstances importing an obligation of confidence. An obligation of confidence will also be found where confidential information has been accessed or acquired without the plaintiff’s knowledge or consent.
It is upon the satisfaction of these prerequisites that an action for breach of confidence may be presumed.
The presumption can be displaced where, eg, the defendant came across the information by accident or was unaware of its confidential nature or believed that there is a strong public interest in disclosing it. The burden of proof is shifted to the defendant to prove that his conscience was unaffected.
The legal framework to analyse whether data or information is confidential or trade secrets is broadly also based on (i) the wording of the contract term (if any); or (ii) general law’s categorization of types of information applied to the facts.
On (ii), the legal authority often cited is Faccenda Chicken Ltd v Fowler [1985] 1 All ER 724 (Ch). There, the English High Court classified 3 categories: (i) trivial information; (ii) confidential information which when internalized into the memory of an employee becomes part of his skill and knowledge; (iii) specific trade secrets so confidential that even if learnt by heart cannot be used by an employee after he has left the employment.
It is often held by courts that client information, client lists, pricing information, unique recipes, unique chemical formula, etc. are confidential.
Compilation of data into database based on information from the public domain may be deemed confidential (I-Admin).
While an express contractual provision on confidentiality will not apply to a third party who receives the confidential information, e.g. the new employer of the employee who left the claimant, a third party recipient may be imposed with an obligation of confidence under general equitable principles.
This is significant because it would allow the claimant to also claim against the new or prospective employer.
The approach set out in I-Admin mentioned above would apply. The question thus is whether the information is confidential and the information was imparted in circumstances importing an obligation of confidentiality.
The issue is the knowledge the recipient has about whether the information is confidential and how the recipient received the information.
If indeed it would be obvious to any reasonable person that the information is confidential, the recipient may well be subject to the confidentiality obligation.
It is often the case that employees will use the confidential data stolen to benefit themselves in a new business they begin or for a new employer.
As such, the claimant company will often also claim in breach of non-solicit of customers and/or non-compete clauses (if any).
The usual issues which then arise is whether those clauses are reasonable and thus enforceable. Or even if not, whether parts of such clauses can be severed to render the remainder enforceable.
Optimally, these clauses should have been well drafted from the outset, narrowly limited to protect only the legitimate interests of the employer, and customized to the specific employer’s context.
By Ronald JJ Wong and Nee Yingxin
If your business is experiencing a slow-down because of Circuit Breaker and social distancing measures during this COVID-19 season 19, now is the best time to repair legal foundations, review internal systems, and position your business for when things pick up again.
Here are 6 key areas you should review.
Continue reading “6 Ways Businesses Can Maximise Their Downtime During COVID-19 Season”
In the production of every film, issues surrounding intellectual property rights would naturally arise such as the ownership and exploitation of copyrights in the film, screenplay and music. Thus, it is important for all parties involved to understand the basics of intellectual property rights which arise in every film production.
The law of copyright protects expressions not ideas. Copyright protection triggers automatically when an original work is reduced to some material form. As such, a single film would contain a few separate copyrighted work – the original screenplay, the musical score, the sound recording, and the film itself.
The law of copyright grants the copyright owner exclusive rights
In general, the law of copyright grants the copyright owner the exclusive rights to exploit the copyrighted work for duration of its protection. In Singapore, the law of copyright is governed by the Copyright Act (Cap. 63).
For the screenplay and musical score, the duration of copyright protection is the duration of the author’s life plus seventy (70) years.
For the sound recording and film, the duration of copyright protection is seventy (70) years from the date of first publication.
For a novel, screenplay or musical score, the copyright owner has the exclusive right to:
For the sound recording, the copyright owner has the exclusive right to:
For the film itself, the copyright owner has the exclusive right to:
Copyright protection also extends to derivative works, i.e. works which are based upon existing works and which contain some element of material alteration. For example, a screenplay adapted from a novel would have its own separate copyright protection. Thus, to have the right to make a film, you would need to have the express authorisation of every copyright owner whose work you will rely upon.
The transfer of ownership or rights
Ownership of copyright may be assigned to another even if the copyrighted work has yet to exist, provided that the assignment is in writing and signed by the assignor. Thus, if a sound recording is made pursuant to an agreement, the commissioning party would be the copyright owner.
The copyright owner may grant exclusive or non-exclusive rights to another through a licence in writing and signed by the copyright owner. An exclusive licence authorises the licensee, to the exclusion of all other persons, to do an act which the copyright owner has the exclusive right to do.
Defence to copyright infringement – fair dealing
A fair dealing with a work would not constitute an infringement of the copyright in the work. For example, dealing with a work for the purposes of research or study may constitute a fair dealing.
Under section 35(2) of the Copyright Act (Cap.62), the following factors are considered in determining whether an act constitutes fair dealing:
The rights of a copyright owner is governed by the law of each country
There is no single worldwide copyright law, so the copyright in each work varies from country to country. In general, a work is protected in the country which the work was first published or which the author of the work resides in. Pursuant to the Berne Convention and TRIPS Agreement, a work that is first published in one country will trigger copyright protection in the other signatory countries as if it were published there. This means that the copyright owner would own separate copyrights in each country, and the corresponding rights and remedies would vary accordingly.
Producers may want to consider registering a trademark in a particular film title if there are long-term prospects such as producing a sequel or merchandising opportunities (think “Harry Potter” and “Star Wars”).
A trademark is essentially any sign that is capable of being represented graphically and which is capable of distinguishing goods or services provided in the course of trade from a particular origin. Registering a trademark gives the owner the right to control the use of the trademark. Consumers are protected as well when they wish to acquire a particular quality of good from a particular source.
In general, the appearance of trademarks in a film (e.g. a scene along a shopping street which features Starbucks) will not amount to trademark infringement as it is not “used in the course of trade” and will not mislead or confuse consumers as to the source of the goods. Instead, companies pay to have their products feature in films as a means to subtly advertise.
Series Contents
1: An Overview: 3 Things for Film Producers
2: Understand the Different Types of Business Structures
3: The 3 Important Approaches To Negotiating A Fair Deal
4: Negotiating A Fair Deal With Writers
5: Raising Finances For Your Film
6: An Introduction To Completion Bonds
7: Distributing Your Film – Entering Into Distribution Licence Agreements
8: Get To Know Your Film’s Intellectual Property Rights – Copyright And Trademark Protection
MinLaw will be amending the Copyright Act
1. New right of attribution to creator. Regardless whether creator has lost the copyright.
2. Creators own copyright in commissioned works by default.
3. Criminalisation of people who manufacture, import, distribute, or sell products that are designed or made primarily for access to pirated content.
4. Copyright exception to non-profit schools and students for using online content.
5. Copyright exception for automated text and data mining for analysis. Good for big data analytics.
6. New class licensing scheme for collective management organisations.
Singapore High Court (coram Justice Hoo Sheau Peng) held, inter alia, that PropertyGuru did not have copyright over photographs which property agent users uploaded onto their website for real estate listings and which they edited and imposed their watermark on. This was not a material alteration or embellishment to become original new work. Their website’s Terms of Use also merely asserted that they had copyright, but this did not take them far since at law, there was no copyright in the first place.
In this case, a well-established Singapore property / real estate listings website PropertyGuru sued a relatively younger startup competitor 99.co for breach of a settlement agreement, tort of inducement of breach of contract (by PropertyGuru’s users), and copyright infringement. Much of the case centred on Xpressor app, an app which allowed cross-posting or cross-listing on multiple property listings platforms. It was found that 99.co had co-developed the app: at [18]. The Xpressor app allows users to log in to their PropertyGuru account and choose the listings therein to cross-post onto 99.co’s website: at [19].
When 99.co first started, it employed a software to “scrape” listings on PropertyGuru’s website and post them on 99.co’s website. Sometime around 2015, the two competitors entered into a Settlement Agreement. This prohibited 99.co from, inter alia, reproducing content from PropertyGuru’s website onto their own. Sometime around August 2016, 99.co offered its users a Premium Account service where it employed independent contractors to manually copy information in property agent’s listings on PropertyGuru and list it on 99.co: at [22].
On PropertyGuru’s breach of settlement agreement claim, the Court found that there was insufficient evidence for this claim regarding some January and February 2016 reproductions on 99.co’s website (which had photographs bearing PropertyGuru’s watermark) because it was plausible that the property agents who made these listings had used other means to reproduce them. Based on the evidence, it was likely that these reproductions were not done through the Xpressor app because by then, the app made sure to remove the watermark before cross-posting: at [54]-[55]. The Court also rejected the argument that 99.co had reproduced the listings simply by developing, marketing, and hosting on its server, the Xpressor app; it remained the individual property agent’s decision whether or not to cross-post listings, not 99.co’s: at [57].
However, the Court did find that the reproduction of 9 photographs through the Premium Account service amounted to a breach of the settlement agreement and thus awarded damages to be assessed and an injunction restraining 99.co from continuing breaches: at [62]. It should be noted also that the Judge had to address an argument that the Premium Account service point was not expressly pleaded by PropertyGuru.
The Court also rejected arguments that 99.co had breached the Settlement Agreement by connecting to PropertyGuru’s website to cross-post listings. The Court found that it was the end users of the Xpressor app who connected to PrpoertyGuru’s website, not 99.co: at [70]-[72]. The Judge also made some comments on the odd drafting of the relevant clauses in the Settlement Agreement: at [72].
The Court rejected PropertyGuru’s claim on this head. The discussion however is interesting. Users of PropertyGuru’s website are deemed to have entered into a contract with PropertyGuru. The contract’s terms include the Terms of Use and Acceptable Use Policy. These terms prohibited users from reproducing material from PropertyGuru’s website and using any software to access PropertyGuru’s services or collect information through PropertyGuru. The Court observed that it could be possible that property agents who had used the Xpressor app to make cross-postings were in breach of the Terms of Use and Acceptable Use Policy: at [84].
However, because there was no evidence that the property agents did actually use the Xpressor app to make cross-postings, the claim on this head failed: at [85]-[87]. As regards the Premium Account service, the Court rejected the claim on this evidence because it was not expressly pleaded that this was a mode by which 99.co induced property agents to breach their contract with PropertyGuru: at [88]-[89]. Unlike the earlier head where the matter of Premium Account services could be seen as evidence, in this instance, PropertyGuru did not amend its Statement of Claim to expressly nail its case down.
The Court also rejected this claim. The issue was whether PropertyGuru owned copyright in the photographs which it obtained from property agents and which it then edited by resizing them, altering their light balance, softening the edges, and adding a watermark: [96].
The Court reviewed three decisions—Interlego AG v Tyco Industries Inc [1989] AC 217 (“Interlego”); The Reject Shop Plc v Robert Manners [1995] FSR 870; Virtual Map (Singapore) Pte Ltd v Suncool International Pte Ltd [2005] 2 SLR(R) 157 (“Virtual Map”)—and held that “the copying, enlargement or resizing of an artistic work, such as a drawing, painting or photograph, does not make the resulting image a copyrighted work. There must be a material alteration or embellishment to the original work to confer originality (and hence copyright protection) on the resulting work. What counts as “material” for this purpose is a question of fact and degree. There was some alteration in Interlego, namely the addition of new written information to the drawing, but this was insufficient to confer originality on what was otherwise a visually similar copy of an image. On the other hand, Virtual Map provided a clear example of a material alteration. While the alteration in that case was extremely substantial, it does not mean that alterations to an original work must necessarily be to a similar degree before the derivative work becomes original and copyrightable”: at [102].
The Court found that PropertyGuru’s editing of the photographs did not amount to an original work which gave rise to copyright: at [103]-[104]. There was no “skill and labour as conferred originality of an artistic character” (at [100], [103]).
As regards PropertyGuru’s Terms of Use, and in particular this sentence—“We shall have the right to watermark the photographs within the Content and the copyright in the final watermarked photographs shall belong solely to us”—the Court found that this was merely an assertion that PropertyGuru had copyright. But if at law, they did not have copyright, then the clause does nothing further: at [107].
Finally, the Court considered 99.co’s counterclaim for PropertyGuru’s groundless threats of infringement proceedings under section 200 of the Copyright Act. The Court rejected the counterclaim. First, it thought that PropertyGuru was justified in thinking that it had basis to sue 99.co: at [116]. Second, 99.co did not adduce evidence of loss. It merely asserted that the threat of the lawsuit affected its ability to obtain funding and strained its relationship with its investors, but there was no evidence for this: at [117].
This case raises issues about platforms, websites, apps’ Terms of Use or Terms of Service. Many of us use these platforms and entered into legally binding contracts with them without realizing what we agreed to. When it comes down to it, a lot of it is an issue of construction of the terms.
In this case, the terms were deemed as merely an assertion of copyright. But the Court found there’s no copyright in the edited watermarked photographs.
Generally, however, terms of use may be drafted in a way to amount to an assignment or license of copyright or intellectual property (“IP”) when posting or listing on websites, apps and other platforms. If it’s an assignment, you effectively give ownership of your IP away. If it’s a non-exclusive licence, you retain ownership and the licensee does not have right to enforce the IP. If it’s an exclusive licence, you retain ownership but the licensee can enforce IP rights, and you technically cannot license your IP to other persons.
As the Court held, there must be material alteration or embellishment to become original new work giving rise to copyright. Resizing, altering light balance, softening edges and adding watermarks to a photograph does not amount to material alteration or embellishment to make the work an original new work with copyright conferred on the editor.
This is important for web users (which is almost all of us), platforms, apps, websites, which edit images and content uploaded online. This may not be original new work. It may even amount to copyright infringement of the first work.
Some of us use cross-posting applications, software, platforms. This case highlights that the mechanism of how content is cross-posted or cross-listed on multiple platforms can have legal repercussions.
If the app takes content from a first platform and post on other platforms, then there may be issues of whether the first platform has copyright over the content, and whether that copyright has been infringed.
If the app takes content direct from the app user and post on multiple platforms, then likely there is no copyright infringement issue since the app is dealing with the app user’s copyright.
There was no discussion on whether hyperlinking, crawling, framing, deep linking, inline linking, etc. would amount to IP infringement. In this case, the issue only arose as a matter of a breach of contract, and even so, there was no evidence for the claim.
Generally hyperlinking to the home page of a website is unlikely to raise issues. Deep linking – linking to a particular page within another website rather than the homepage – is uncertain but per se is unlikely to constitute IP infringement (based on decisions and authoritative opinions from other jurisdictions). Also, framing (creating frames on the web page which load another person’s website) and inline/embedding/img-src linking (i.e. in simple HTML code, <img src=”some third party image”>) is also uncertain.
In this case, PropertyGuru’s Terms of Use prohibits a user from hyperlinking to content on their website and from using software to crawl and obtain information from their website. Hence, this should give us pause as to whether some of our online actions may constitute breaches of contract.
Although this was not an issue in the case at all, platforms, websites, apps, should also be careful that their functionalities, including hyperlinking, crawling and re-posting, does not amount to IP infringement by way of authorizing another person to breach IP. For copyright, granting or purporting to grant a right to a third party to do a copyright infringing act would incur authorization liability. The law in Singapore on this, reflected in the Court of Appeal’s landmark decision in the RecordTV case, is calibrated narrowly. Various factors would be taken into account, including the relationship between the alleged authorizer and the direct infringer, whether the alleged authorizer had actual or constructive knowledge of the infringement, whether the alleged authorizer had the ability to prevent infringement.
All in all, while this decision does not lay down any new law, it is nonetheless interesting because of the application of law to relatively new and evolving technology and scenarios. It also raises important questions for all of us as to the rights and obligations we have when we use various platforms, websites or apps, or the rights and intellectual property we are assigning and thus giving away. It should be noted that either party may appeal this decision to the Court of Appeal, so we shall wait and see if there are any further developments on this.
Warner-Lambert Company LLC v Novartis (Singapore) Pte Ltd [2017] SGCA 45
Significance: Landmark Singapore Court of Appeal decision on issues in patent law not previously considered before by the Singapore courts. The case involved two large pharmaceutical companies. These issues relate to the protection of subsequent medical uses of known substances and the validity of “Swiss-style” claims under the Patents Act. Warner-Lambert Company LLC’s appeal failed in this case. It tried to apply to amend its patent which was alleged to be invalid for claiming a monopoly over methods of treatment of the human or animal body, something impermissible under Singapore’s patent law as section 16(2) of the Patents Act provides: “An invention of a method of treatment of the human or animal body by surgery or therapy or of diagnosis practised on the human or animal body shall not be taken to be capable of industrial application.” The Court upheld the trial judge’s findings that the amendments, if granted, would extend the scope of protection of the patent and that there had been undue delay by Warner-Lambert in seeking the amendments which warranted the exercise of the court’s discretion to disallow the amendments.