Clarification on Obligations of Confidentiality – Start-ups Take Note!

Clarification on Obligations of Confidentiality – Start-ups Take Note!

Clarification on Obligations of Confidentiality – Start-ups Take Note!

Rohm and Haas Electronic Materials CMP Holdings, Inc v NexPlanar Corp and another [2017] SGHC 310

This dispute revolves around a patent (SG43335) for a polishing pad used in the field of semiconductor manufacturing, wherein Rohm and Haas Electronic Materials CMP Holdings (Plaintiff) sued NexPlanar Corp and Wah Lee Tech (Singapore) Pte Ltd (Defendants) for infringement. The Defendants alleged, amongst other assertions, that the patent is invalid due to prior sales of the patented product before the priority date of the patent. Justice Wei held that even though relevant confidentiality agreements could not be provided by the Plaintiff, an implied obligation of confidence existed in view of the particular set of circumstances. Accordingly, the patent was found to be valid and infringed.

The Patent

The claimed invention relates to a polishing pad used to polish the surface of an electronic substrate such as a wafer in a chemical mechanical polishing/planarization (CMP) process. This pad comprises a polymeric matrix that is embedded with hollow polymeric microelements. In particular, and as illustrated in Figure 3 of the Patent (see below), the pad (110) comprised a “work surface (18)” with microelements (16) that come into direct contact with the work-piece (wafer), as well as another “subsurface (24)” of microelements. The microelements at the work surface (18) are less rigid than those embedded in the subsurface (24). As the work surface (18) wears out, the subsurface (24) becomes the new work surface (18). The regeneration of the subsurface as the new work surface allows for more consistent and even polishing of the wafer.

Fig. 3 of the Patent (SG43335), illustrating a cross-sectional diagram of a polishing pad.

Anticipation by prior disclosure

It was contended by the Defendants that the patent was anticipated (and hence not novel) due to prior use and sale of IC-1000 pads (produced by the Plaintiff) to Intel.

S.14(1) of the Singapore patent Act  provides that an invention shall be taken to be new if it does not form part of the state of the art. The definition of “state of the art” is set out in S.14(2):

The state of the art in the case of an invention shall be taken to comprise all matter (whether a product, a process, information about either, or anything else) which has at any time before the priority date of that invention been made available to the public (whether in Singapore or elsewhere) by written or oral description, by use or in any other way.

In response, while the Plaintiff did not deny this fact, they argued that the prior sale and disposal were made under obligations of confidentiality (both expressed and implied).

Explicit and implied duty of confidence

On the face of the facts, it was held that there is no explicit confidentiality agreement. While the Plaintiff claimed that three non-disclosure agreements (NDAs) existed with Intel, they were only able to produce a copy of one of them. The exhibited NDA post-dated most of the sales of the IC-1000 pads and also did not refer to the IC-1000 pads that had already been sold.

However, it was held that there was an implied obligation of confidence as information of commercial or industrial value was given on a business-like basis with a common object in mind and there was substantial cooperation between the Plaintiff and Intel. In particular:

  1. The IC-1000 pads provided were experimental in nature and data regarding their performance was fed back to the Plaintiff.
  2. The IC-1000 pads were stored at Intel’s research facilities which were off-limits to outsiders.

In addition, a presentation given at a conference before the priority date was expressly stated to be confidential, and data shared only stated the benefits of IC-1000 pads over its predecessors in very general terms. Further, a brochure distributed before the priority date of the patent related only to the IC pad series in general and did not mention the microelements in the pads. It was therefore held that these prior disclosures were not enabling.

Take Home Points

a. In determining the presence of an implied obligation of confidence between multiple parties, the court will consider the nature and circumstances in which the disclosure was made.

b. An implied obligation of confidence may exist if information of commercial or industrial value was given on a business-like basis with a common object in mind. For instance, parties may be bound by an implied obligation of confidence if ‘projects’ are carried out for experimental purposes and findings are relayed back to an initiating party.

c. Restricted access to a facility, and hence to the objects stored at the facility, may be basis to argue that there is an implied obligation of confidence.

d. A patent would be anticipated by a prior disclosure if the prior disclosure is an enabling disclosure. Prior sharing of findings without disclosing the inventive feature may not be an enabling disclosure.

Other comments

Typically, a bigger entity will refuse to sign a non-disclosure agreement with a smaller entity when entering into research collaborations over concerns that their own interests would be jeopardised. This often happens when the smaller entity is a start-up or SME. However, as long as the bigger entity enters into an arrangement whereby there is an exchange of experimental findings with the smaller entity, and research is carried out at a facility of the bigger entity with restricted access, there appears to be an implied obligation of confidence in place, and this is advantageous for the smaller entity. It should be noted that it would always be best to have a non-disclosure agreement in place as this would further remove uncertainty.

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