High Court Rules On Confidential Information

Confidential Information

The year began with a judgment over a patent law dispute involving the Tai family of Malaysia (Soon Seng Palm Oil Mill (Gemas) Sdn Bhd and others v Jang Kim Luang @ Yeo Kim Luang and others). The action revolves around a process patent for “the extraction of intrinsic fibers from waste material left behind after palm oil extraction. The intrinsic fibres of the empty fruits are recycled to create medium density fibre wood boards and mulching mats”.

The Soon Seng Group of Companies is controlled by the Tai family of Malaysia. Jang Kim Luang (the defendant) was the ex-wife of Tai Swee Kian. In happier times, Luang was the chief executive officer of the Soon Seng Palm Oil division. Prior to working with the Soon Seng Group, Luang founded a company called Ecofibre Technology, which dealt with the milling and sale of crude palm oil, palm kernel and recycling of oil biomass. Luang signed a contract of  employment in 1994 with the plaintiff. Pursuant to the terms of the contract, Luang:

(a) was not to disclose confidential information to third parties;

(b) was to return all property and confidential information to the plaintiff upon termination of employment; and

(c) had a fiduciary duty to act in good faith, and in the best interests of Soon Seng Palm Oil Division.

During her stint with the Soon Seng Group, Luang headed the research and development of the subject invention, which involved products and processes related to the conversion and production of intrinsic fibres from oil palm material and further processing of the intrinsic fibres for manufacture of  emiprocessed materials. Luang, through her group company, applied for a patent for the said invention.

Based on the facts of the case, the High Court of Malay held that:

(a) Luang was an employee of the plaintiff company, at the material time;

(b) That she had carried out activities in the performance of her contract of employment, which brought about the invention; and

(c) That there is nothing to the contrary in the Contract of Employment, which suggested that she could claim ownership of the invention.

The High Court also held that it was the duty and responsibility of Luang to protect and preserve confidentiality, during and after employment and that she had unlawfully misappropriated the confidential information.

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