Legal Update 2 of 2017

Breach of Confidentiality - Enforceability of confidentiality clauses in employee's contract of employment. 

 

CASE:

Dynacast (Melaka) Sdn Bhd & Ors v. Vision Cast Sdn Bhd & Anor [2016] 6 CLJ 176 FC


BRIEF FACTS

  • The appellants ('plaintiffs') were involved in the business of die-casting of component parts for various customers.

  • The second defendant was the regional director of the plaintiffs in charge of overseeing the plaintiffs' operation and management of the Asia Pacific region. 

  • Upon resignation from the plaintiffs' company, the second defendant set up his own company (the 'first defendant') engaging in similar die-casting business and had misappropriated private and confidential information on the plaintiffs. 

  • It was alleged that the second defendant had breached the terms of his employment contract, employee confidentiality agreement and his duties imposed by law and equity as the senior employee of the plaintiffs and/or his obligations of confidence imposed by law and equity. 

  • The plaintiffs alleged that the defendant's promotional booklet featured many photographs adopted from the plaintiffs' material either found on the website or the plaintiffs' advertising materials. 

  • Therefore, it was claimed that the defendant infringed the plaintiffs' copyright by reproducing the said work and communicating the work to the public without the licence or authority from the plaintiffs.

  • The High Court held that the defendant had infringed the plaintiffs' copyrtight and was in breach of his confidentiality obligation as provided in his agreement with the plaintiffs. 

  • The Court of Appeal however, allowed the defendants' appeal. 

  • Hence, the present appeal.


DECISION APPEAL DISMISSED

  • Information will only be protected if it could properly be classed as a trade secret or of it is in all the circumstances of such a highly confidential nature as to require the same protection as a trade secret. 

  • It is insufficient for the plaintiffs to merely plead that the second defendant had 'misappropriated the private and confidential information on the plaintiffs'.

  • Particulars of the alleged misappropriation ought to have been pleaded as the second defendant is entitled to know what are the private and confidential information allegedly misappropriated by him. 

  • While the claim is only to enforce the contractual clauses related to confidential information entered and agreed upon by the second defendant, it is sufficient to cast the claim in the broadest term possible. 

  • There was no similarity between the plaintiffs' promotional material and the defendants' brochure insofar, as its layout, title or its contents were concerned. 

  • The plaintiffs' claim for the breach of the confidentiality clause must fail on account of vague and insufficient pleadings as well as from the evidential aspect.

  • There was no breach of fiduciary duty or breach of confidentiality. 

 

 

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