Nexus: confidential information

Never Too Late: if you missed the IPKat last week

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Last week, the IPKat certainly supplied us all with an abundance of trade mark law updates! If you missed out on this and reports in other areas of IP, you can catch up in this week's edition of Never Too Late!

Trade Marks

Kat Book Review Editor Hayleigh Bosher reported on Alliance Pharmaceuticals v EUIPO - AxiCorp, which turned on the correct interpretation of a trade mark specification; the literal vs the "common sense approach". Here's what happened.

Should auld GI marks be forgot and never brought to mind?
image source: The Bourbon Review

The whisky industry of Scotland has generated a number of interesting cases lately, and Katfriend Mok Ho Fai told the recent intriguing story of the fate of the ISETAN TARTAN mark in Singapore. When the mark "ISETAN TARTAN" is used for whisky that is not Scotch whiskey, is it of such a nature as to deceive the public as to the whisky's geographical origin? The Singapore High Court says "yes".

A recent decision of the Cancellation Division considered the absolute grounds for refusal of a 3D shape mark (a skull-shaped bottle for vodka). Book Review Editor Hayleigh Bosher pondered whether this shape is devoid of distinctive character and if it substantially enhances the attractiveness of the goods and strongly influences consumer preferences.

In litigation, a party's willingness to withdraw a case avoids not only wasting valuable time, but also the consequences of losing in plain sight and hence exposing one's own weaknesses to both the adversary and curious onlookers. Can – or should – a party be forced to continue the game when the winning party badly wants to expose those weaknesses? GuestKat Peter Ling told us that in the Nivea colour trade mark case (that had been dragging on for eleven years), the German Federal Patent Court answered the question in the negative.

Katfriend Shawn Poon reported on a showdown in Singapore between Harvard College and Harvard Club of Singapore. In a recent IPOS decision, the President and Fellows of Harvard College filed two applications to register “HARVARD CLUB OF SINGAPORE” and “HARVARD UNIVERSITY OF SINGAPORE” in Class 41. They were opposed by the Harvard Club of Singapore.

Looking at an interesting question raised by a case in China, Asia Correspondent Tian Lu considers whether the ungrammatical metaphrase of the Chinese sign counts when it comes to assessing the similarities between two verbal signs - one in Chinese and the other in English. This arose following a trade mark application for 'DAY DAY UP' in class 36, which was rejected due to its similarity with the cited trade mark registration ‘天天向上’ in the same class.

Copyright

Kylie Minogue will be going to bed angry. A copyright dispute in the Intellectual Property Enterprise Court did not end happily for Kylie Minogue's bed linen licensee, Ashley Wilde, and another manufacturer of very similar looking pleats. Alex Woolgar provided further details.

Kat Eleonora Rosati examines copyright protection available to fictional characters and the extent to which it could go, looking at the meaning of a 'work' that is sufficiently 'original' and of the 'right kind', as well as how many and which copyrights it would be entitled to.

Patents

GuestKat Rose Hughes discusses the high-profile CRISPR patent dispute relating to the EPO interpretation of "any applicant" in Article 87(1) EPC, illustrating how clarity is needed from the Boards of Appeal on the EPO's "co-applicant approach" to priority.

GuestKat Rose Hughes also reports on the leaked "451-page dossier" reported by the media recently describing US/UK talks on future trade arrangements, looking particularly at the UK's relations with the EPC and UPC, patent term extension and data exclusivity.

Confidential Information

Africa Correspondent Chijioke Okorie reports on a ruling from the Nigerian Federal High Court, in a suit bordering inter alia on the misuse of confidential information relating to IP.

Never Too Late 242 [Week ending 24 Nov] Latest fashion law developments in a 1-day course … with an IPKat readers special discount | Never Too Late: if you missed the IPKat last week | Inventorship under the light of AI? | Tuesday Thingies | Economics and IP: the good, the bad and the ugly (and a request for reader feedback)? | Another "Glen", another GI violation- Hamburg Court considers "Glen Els" an Evocation of "Scotch Whisky" | Around the IP Blogs | BREAKING: German constitutional court Brexit-delay rumours are "bulls***" in on-going UPC saga | "Many are called but few are chosen": When a claim of bad faith succeeded in a trademark matter in Singapore | [Guest Post] IP Education Series #3 | FRAND: OLG Karlsruhe rules on nature, extent and timing of obligations under Huawei v ZTE | JMLS IP Conference (Report 1): Antitrust, IP, data and FRAND - time for a retool? | Shifting the burden of proof back to the patentee (T 1299/15) | JMLS IP Conference (Report 2): Patent eligibility, anti-anti suits and the era of unpredictability | UCL IBIL Event: Boris v Corbyn v Trump - putting a price on patents, medicine and innovation | CJEU follows up on Soulier and Doke and rules that presumption of consent of performers in relation to exploitation of recordings is not necessarily contrary to EU law | GC excludes likelihood of confusion between marks representing stylized human figure and relating to same goods due to low distinctiveness of shared concept | Amsterdam district court orders Google to take offline fake reviews | [Guest post] Polish Constitutional Tribunal rules that rightholders can claim damages amounting to twice a hypothetical licence fee in copyright infringement cases

Never Too Late 241 [Week ending 17 Nov] It may be the name of a fashion style, but is it trade mark use? | Bentley Motors found you have infringed small clothing firm’s ‘Bentley’ trade marks | Monday Miscellany | “Weel done, Cutty-Sark”--from poem to sailing ship to whisky: What’s in a name? | IPEC no longer London-focuses as IP small claims track reaches courts in Newcastle, Manchester, Cardiff and beyond | Can an employee’s freedom of expression trump their confidentiality obligations? The ECtHR weighs in (in a case concerning an employee’s personal website) | Around the IP Blogs | Wednesday Whimsies | Ferrero succeeds in enforcing is rights in the Tic Tac container before Italian court | Never Too Late: If You Missed the IPKat | In order to be irreplaceable, one must always be different: Chanel in trade mark dispute over GABRIELLE mark - again | [Guest post] Rome court rules that iconic photograph of judges Falcone and Borsellino is not a photographic artwork

Chams Plc and another v Mastercard Asia/Pacific Pte Ltd and 5 Others – Where a contractual breach involves the misuse of IP-based confidential information

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The Nigerian Federal High Court has delivered a ruling in a suit bordering inter alia on the misuse of confidential information relating to IP. On 7th November 2019, the Federal High Court delivered a ruling in Suit No. FHC/L/CS/1440/2019 - Chams Plc & Another v Mastercard Asia/Pacific Pte Ltd and 5 Others, granting an interim injunction restraining named Nigerian banks (22 banks in all) from giving effect to MasterCard transactions in which National Identity Cards bearing the logo of the National Identity Management Commission (NIMC) are used. The interim injunction is to remain until the hearing of a pending motion on notice for similar reliefs. [For context, the national identity cards provide proof of identity and come with a prepaid payment technology provided by Mastercard and can be used to make electronic payments and deposit funds.]

...confidential architecture

As some readers (in Nigeria) will know, the suit in question relates to the concession awarded by the NIMC to a Nigerian technology firm, Chams Plc over the issuance of national identity cards. Chams Plc has claimed that after its Special Purpose Vehicle, Chams Consortium Limited was granted the concession by the NIMC to produce national identity cards on behalf of the NIMC (the national identity card project); it invited MasterCard as one of its technical partners on the project.

Chams Consortium Limited (CCL) also entered into a Customer Business Agreement (CBA) with MasterCard, which contained non-disclosure of confidential information and non-compete clauses. Pursuant to this agreement, CCL disclosed confidential information on the entire architecture of the national identity cards to MasterCard. This information as to the architecture of the national identity cards was a product of Chams Plc’s research, design and development work. CCL claims that MasterCard used the disclosed proprietary confidential information and the fact of its being formally introduced to NIMC to bypass CCL; deal directly with NIMC and commence production of national identity cards. MasterCard’s activities have been alleged to result in CCL incurring significant losses and placed MasterCard in a position to make significant revenue using Chams Plc.’s research, design and development work.

In their statement of claim, the plaintiffs have sought the sum of N84billion (approximately $231.7million) as special damages for anticipated loss of revenue from the national identity card project; N10billion (approximately $27.6million) as general damages for fraud; and N20billion (approximately $55million) for inducement of breach and termination of the concessions awarded by NIMC. The plaintiffs also filed a motion ex parte and a motion on notice and in both applications, they prayed the court to inter alia (i) restrain MasterCard from further printing National Identity Cards with the NIMC logo; (ii) restrain Nigerian banks (named as respondents to the application) from honouring MasterCard transactions with the use of the National Identity Cards; (iii) issue an Anton Piller Order for seizure and costing of machines for printing the cards and the seizure of the cards themselves; and (iv) order the police to arrest anyone who obstructs the execution of the court’s orders.

In its ruling on the motion ex parte, the court directed that the defendants be served with the originating processes and the motion on notice. Apart from the order as to service, the court granted only the second order sought i.e. the order restraining the named Nigerian banks from honouring MasterCard transactions made with the use of the National Identity Cards pending the hearing of the motion on notice. All the other prayers made in the motion ex parte are to be heard when the defendants have been put on notice.

Comment
The suit in question borders particularly on breach of contract occasioned by the misuse of confidential information. However, this Kat is interested in the question of misuse of confidential information as it relates to outputs of research and development work (i.e. knowledge-based information).

Regarding the main claims for special and general damages for anticipated revenue, fraud, and inducement of breach, it is opined that the claims are hinged on MasterCard’s alleged misuse of information as to the architecture of the national identity cards. Essentially, the alleged breach of contract lies in the misuse of confidential information. Where the plaintiffs are unable to show that MasterCard made unauthorised use of such confidential information, it may be difficult to prove the plaintiffs’ entitlement to damages especially the claim for special damages.

In Nigeria, claims of misuse of confidential information are likely to be founded in contract or tort, as there are no statutory provisions explicitly providing for such claims. However, section 15 of the Freedom of Information Act 2011 allows public institutions to deny an application to disclose information that contains “trade secrets and commercial or financial information obtained from a person or business where such trade secrets or information are proprietary, privileged or confidential, or where disclosure of such trade secrets or information may cause harm to the interests of the third party”. The section also restrains the disclosure of “information the disclosure of which could reasonably be expected to interfere with the contractual or other negotiations of a third party” and “proposal and bids for any contract, grants, or agreement, including information which if it were disclosed would frustrate procurement or give an advantage to any person”.

This provision suggests that Nigerian courts would frown at unauthorised disclosure or use of proprietary and/or confidential information. However, to the best of this Kat’s knowledge, there has not been a reported, decided case in Nigeria on parameters for imposing liability for misuse of proprietary and/or confidential information or for remedies in the case of such misuse. But, one can get a sense of how such cases may turn by looking at judicial treatment of non-disclosure clauses in employment contracts and/or confidentiality obligations of banks to their customers.

In Aero Contractors v Akingbehin (NICN/LA/123/2013), the defendant, through his solicitors had written to the plaintiff threatening to disclose the plaintiff’s confidential information if he (the defendant) was not reinstated to his position in the plaintiff’s company. The plaintiff sued for breach of the confidentiality clause contained in the defendant’s contract of employment and sought damages in the sum of N25million (approximately $68,000) for the breach. The court found that the defendant did in fact breach the confidentiality clause when he disclosed the confidential information to his solicitors. However, the court awarded only the sum of N2million (approximately $5,500) as damages. In Fidelity Bank Plc v Onwuka, the Court of Appeal held that a breach of a bank’s legal duty of confidentiality not to disclose information to third parties would give rise to liability in damages.

It remains to be seen whether the plaintiffs can show that there was confidential information provided to the defendant which the latter misused in breach of the non-disclosure obligations. Even where the plaintiffs succeed in proving their claims, it also remains to be seen if the court will award the significant sums claimed as damages.

Regarding the motion on notice, especially the Anton Piller order sought, there is also the question of whether the plaintiffs can obtain a mandatory interlocutory order permitting them to seize the defendants’ card-printing/moulding machines, inspect and cost (i.e. appraise) the volume of trade on the national identity cards.

The principles governing the grant of an Anton Piller order in Nigeria have been adopted from the decision of the English Court of Appeal in Anton Piller KG v. Manufacturing Processes Ltd in several cases including Ferodo Limited v. Unibros Stores and Akuma Ind. Ltd v. Ayman Ent. Ltd. The principles are that: (1) there must be a strong prima facie cause of action; (2) the danger to the plaintiff to be avoided by the grant of an Anton Piller order must be serious; and (3) the risk of destruction or removal of evidence must be significant rather than merely possible. The general principles regarding injunctions - serious question to be tried, adequacy of damages, balance of convenience and whether the status quo should be maintained – also apply.

Anton Pillar orders are usually made ex-parte and understandably so. If the point of the exercise is to take the defendant unawares before the defendant has time to hide evidence of infringing materials and/or activities, making the orders after putting the defendant on notice will defeat the purpose. In this Kat’s experience, Nigerian courts are wont to order accelerated hearing once Anton Pillar orders are sought via a motion on notice. That said, the decision is in the hands of the court whether to grant the Anton Piller order when the defendants in this case have been put on notice.

What happens now?
The case continues. The defendants have 30 days from the date of service of the writ and statement of claim to respond by filing a defence. The defendants will also need to respond to the motion on notice, which seeks far-reaching orders against them. Given the national significance of the case (being on the issue of identity management at the national level), it is quite possible for the parties to decide to settle out of court.

Time shall tell and readers should watch this space...

AIPPI Congress Report 2: Trade Secrets - Views from In-House Counsel

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View from one of the Congress's
conference rooms overlooking
Westminster Abbey

Having benefited from a beautiful opening weekend, it was only fitting that the rain came on Monday to give AIPPI Congress attendees a taste of "real life" in London. During the afternoon, as rain speckled against the windows of the Queen Elizabeth II Conference, attendees spilled into top floor conference rooms to learn about the latest in trade secret protection.

Back over to Sarah Blair for her practical report on the session:

"Trade secrets can be a valuable tool to protect valuable know-how. One of the last panel sessions of day 1 saw six panellists discuss the new trade secrets regimes implemented by the EU and US in 2018. The US enacted the ‘Defend Trade Secrets Act’ and the EU formally adopted the ‘Directive on the Protection of Undisclosed Know-How and Business Information’.

Linda Lecomte (Wuersch & Gering LLP) moderated an extensive in-house panel comprising: Emily O’Neill (Chief Counsel at Spectris, UK); Loek Steffanie (Senior Patent Counsel at DSM, Netherlands); Pirke Fustinoni (Head of Intellectual Property at Outotec Oyj, Finland), Sascha Schalkwijk (Secrid); and, Stephen Mackenzie (Senior Counsel at Koch Industries, US).

Key takeaways from the session include:

1. Practical Steps to protect trade secrets

The panellists were asked to share what policies and practices they had developed with their companies to help protect its trade secrets. These included:

Written, global policies to ensure clarity and consistency of policies across all relevant jurisdictions. Sascha Schalkwijk commented that such policies will necessarily be commensurate with a company’s size and resources. The key is to identify valuable information and high risk areas to enable sufficient and achievable policies to be put in place.

Document marking and classifications to show when documents are confidential or privileged.

On-board training to serve two purposes: first, to teach all new staff both the importance of trade secrets and the company’s policies on protecting them (scripts can be useful in this regard). Second, to understand the new-joiner’s background so as to consider how to prevent and reduce the risk of their utilising another’s trade secrets.

Continuous training to remind staff about trade secret policies. Options could include in-person teaching sessions or interactive e-learning modules. Such training might comprise general corporate training or more specific training for specific roles – Loek Steffanie pointed out the importance of using appropriate language to ensure that the policies are understood.

Leaver policies to be conducted by HR departments, including, for example, computer audits and checklists that all confidential documents have been returned. Stephen MacKenzie noted that employees don’t always take documents for their use, but sometimes simply to have copies of their works. However, control must be retained over such documents and must be returned upon their leaving.

Working with IT to monitor outgoing document traffic or to conduct computer audits upon an employee’s departure. It was noted that this option is not allowed in some jurisdictions.

Spot audits, e.g. in a factory, whereby an undercover visitor is sent to see if anything confidential can be seen or accessed. Loek Steffanie made the valuable point that public relations are important when conducting such audits – it should be stressed that it is for the asset’s protection that such an audit was conducted rather than to judge their performance or actions.

Global policies – to ensure consistency of policies across jurisdictions and with all parties – both internally and in working with third parties. Sascha Schalkwijk commented that such policies will necessarily be commensurate with a company’s size and resources. The key is to identify the valuable information and high risk areas to enable sufficient and achievable policies to be out in place.

Non-disclosure Agreements for use with third parties. Emily O’Neill suggested having both a standard template and a playbook of useful clauses to allow for some flexibility when negotiating such agreements. Consider what you are doing and what must be shared and tailor the agreements accordingly.

Following up confidential discussions in writing. For example, by sending an email summarising the meeting and stating that, as was understood by all of the parties present, the information was confidential. Copies needn’t be provided to the legal team – it’s not their role to monitor – but they should be saved and accessible if they are ever required.

2. A magic wand

A creative question was put to the panellists by the Kat’s very own Annsley Merelle Ward: what would they change if they had a magic wand?

Stephen MacKenzie would impose more serious penalties for the use of trade secrets. He considered that a slap on the risk by way of a fine is not sufficient and thinks that there should be criminal liability.

Pirke Fustinoni on the other hand was generally satisfied with Finland’s laws on trade secrets. She emphasised that it is was simply a matter of continuously building a corporate culture to facilitate and maximise protection.

Emily O’Neill would improve IT infrastructure for obtaining and recording evidence.

Loek Steffanie would use the magic wand to enable him oversight of all activities that might lead to a trade secrets leak to enable him to act quickly to prevent them and/or to have knowledge of such leaks as soon as they happen to be able to take immediate steps to mitigate the damage. Rapid response, Loek said, was absolutely critical.

Sascha Schalkwijk considered that there wasn’t anything specific that she would use the magic wand for. She reiterated that, working for a relatively new and small company, it is a matter of taking baby steps so as to do what is needed at each stage. As it grows, it will need to consider how to update and upscale its trade secret policies.

Linda Lecomte opted to use her magic wand to have a cyber-awareness unit to investigate and obtain evidence about trade secret infringements."

Nexus

Never Too Late: if you missed the IPKat last week

Chams Plc and another v Mastercard Asia/Pacific Pte Ltd and 5 Others – Where a contractual breach involves the misuse of IP-based confidential information

AIPPI Congress Report 2: Trade Secrets - Views from In-House Counsel

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