Swisslog Malaysia Sdn Bhd v Gan Soon Kiat (WA-22IP-72-09/2024)

GAN SOON KIAT (NRIC No.: 830718-03-5601)

CHANG JUN QIANG (NRIC No.: 940919-14-6081)

PANG KENT YAN (NRIC No.: 750131-10-5463)

VIVIAN KHEW WEI MAN (NRIC No.: 881226-08-5442)

YEOH WOOI MENG (NRIC No.: 780413-07-5423)

YEOH TAN CHIN AUN (NRIC No.: 901220-14-5999)

CHUAH TONG SIN (NRIC No.: 801201-03-5067)

TAN WEI MING (NRIC No.: 940521-14-6487)

YAP YEE HUANG (NRIC No.: 900919-10-5283)

TIU YEE SENG (NRIC No.: 841209-14-5785)

WOODTREES SDN BHD (Company No.: 202101016172 (1416472-U))

WOODTREES ANGEL PLT (Company No.: 202204001639 (LLP0031921-LGN)) … DEFENDANTS GROUNDS OF JUDGMENT A. Introduction [1] The following applications were filed by the parties: a. An inter-parte application filed by the plaintiff for a delivery-up order against the 1st, 2nd, 3rd and 5th defendants and a prohibitory interim injunction against all defendants (“Inter-Parte Injunction Application”). The plaintiff’s ex-parte injunction application (“Ex-Parte Injunction Application”) was allowed by the court (“Ex-Parte Injunction Order”), and the parties subsequently agreed to an ad-interim injunction order (“Ad-Interim Injunction Order”) which was later amended (“Amended Ad-Interim Injunction Order”). The Ad-Interim Injunction Order and the Amended Ad-Interim Injunction Order are collectively referred to as the “Ad-Interim Injunction Orders”); and b. Applications by the 1st, 2nd, 3rd, 5th, 6th, 7th, 11th and 12th defendants to set aside the Ex-Parte Injunction Order and the Ad-Interim Injunction Orders (“Setting-Aside Applications”). [2] The 4th, 8th, 9th and 10th defendants have entered into separate consent judgments with the plaintiff in respect of the entire action. [3] Thus, unless otherwise stated, the defendants involved in the Inter-Parte Injunction Application and the Setting Aside Applications, namely the 1st, 2nd, 3rd, 5th, 6th, 7th, 11th and 12th defendants shall collectively be referred to as the “defendants”. [4] After considering the evidence before the court and the submissions of learned counsel, the court allowed the Inter-Parte Injunction Application and dismissed the Setting Aside Applications. B. Background Facts [5] The plaintiff is a company forming part of the Swisslog group of companies headquartered in Switzerland. [6] The 1st to 7th defendants were former employees of the plaintiff, while the 8th to 10th defendants were current employees, at the material time. [7] It is not in dispute that the plaintiff is the owner of: a. A system known as Swisslog’s warehouse management system (“Swisslog WMS”); b. Copyright subsisting in the Swisslog WMS; and c. Confidential information created and used for the Swisslog WMS, which includes source codes, trade channels, distribution networks, customer databases, customer requirements, pricing, costing, suppliers and designs (“Confidential Information”). [8] In August 2019, the plaintiff initiated an action against the 1st and 2nd defendants, and three other ex-employees of the plaintiff, at the Kuala Lumpur High Court in Suit No. WA-22IP-56-08/2019, for amongst others, copyright infringement, breach of employee duties and confidentiality, unlawful interference with trade, and conspiracy to injure ("Suit 56"). [9] In Suit 56, the plaintiff alleged that the 1st and 2nd defendants were providing services to the plaintiff’s customers without the plaintiff’s consent, and had copied the plaintiff’s source codes and confidential information. On 24 May 2021, a consent judgment was entered into between the plaintiff and the defendants in Suit 56. The terms of the consent judgment include a permanent injunction against the defendants, to restrain them from infringing the plaintiff's copyright in its computer programmes and from disclosing the plaintiff’s confidential information. [10] The plaintiff claimed that in October 2023, it received information that the 11th defendant had presented its warehouse management software (“Woodtrees Software”) – which the plaintiff claimed is similar to the Swisslog WMS – to a potential client. [11] The plaintiff also claimed that after further investigations, it discovered that: a. The 1st to 7th defendants have stakes and roles in the 11th defendant; b. There are substantial similarities between the Swisslog WMS and the Woodtrees Software; c. A total of 12 individuals, consisting of the 2nd, 3rd and 6th to 10th defendants, as well as other ex-employees of the plaintiff, hold indirect shares in the 11th defendant through the 12th defendant; and d. The 8th to 10th defendants who were existing employees of the plaintiff at the material time, did not disclose their interest in the 11th and 12th defendants to the plaintiff. [12] Thus, the plaintiff filed this action to seek, amongst other reliefs, an injunction against the defendants from infringing the plaintiff’s copyright in the Swisslog WMS and from disclosing the Confidential Information, a delivery-up order, and damages. [13] In the course of these proceedings, the plaintiff filed the Ex-Parte Injunction Application, seeking inter alia, orders for the 1st, 2nd, 3rd and 5th defendants to deliver-up electronics and communications devices in their custody, and for the defendants to be be restrained from carrying on business using the Woodtrees Software and from disclosing the Confidential Information, pending the disposal of this action. [14] The Ex-Parte Injunction Order was granted by the court, and thereafter the parties agreed on the Ad-Interim Injunction Orders. The terms of the Ex-Parte Injunction Order and the Ad-Interim Injunction Orders are based essentially on the prayers sought in the Ex-Parte Injunction Application. [15] The plaintiff has now filed the Inter-Parte Injunction Application in respect of the Ex-Parte Injunction Order, while the defendants filed the Setting Aside Applications, to set aside the Ex-Parte Injunction Order and the Ad-Interim Injunction Orders. C. Issues [16] The defendants raised several issues in opposing the Inter-Parte Injunction Application and supporting the Setting Aside Applications. These issues, which were examined by the court in the determination of the applications, are as follows: a. The requirements for a delivery-up order have not been fulfilled, in that the plaintiff has failed to: i. Provide full and frank disclosure to the court (“Issue 1”); and ii. Provide proof that the 1st, 2nd, 3rd and 5th defendants have in their possession any evidence related to this action, or that they will destroy evidence (“Issue 2”); b. The Ex-Parte Injunction Order is oppressive and extreme (“Issue 3”); and c. There was non-compliance with the Ex-Parte Injunction Order, which amounts to an abuse of the process of the court (“Issue 4”). [17] The court also examined whether the requirements for the grant of a delivery-up order and an interim injunction have been met, which would justify the grant of the Inter-Parte Injunction Application (“Issue 5”). D. Issue 1: Did The Plaintiff Fail To Provide Full And Frank Disclosure? [18] The defendants contended that the plaintiff failed to disclose the following facts to the court: a. That the 1st to 7th defendants are only support staff who have no knowledge of and were not involved in creating the Woodtrees Software; and b. That the plaintiff knew of the existence of the 11th and 12th defendants since 2022, in view of an industrial relations dispute involving its former employee, Phuah Beng Lee (“Phuah”). [19] It is trite law that a party making an application for an ex-parte injunction is duty-bound to provide full and frank disclosure to the court of material facts within its knowledge. The issue that arises is what constitutes “material facts”. This was considered in National Bank of Sharjah v Dellborg [1992] Lexis Citation 2355, where the Court of Appeal of the United Kingdom held: “… At times Mr Dellborg came near to arguing that the bank ought to have disclosed every relevant document and that the failure to disclose a relevant document would justify the court in discharging the Mareva injunctions. But this is quite wrong. It confuses the obligation to disclose material facts on the ex parte application with the obligation to give discovery of relevant documents in the course of preparation for the trial. The material facts at the ex parte stage are the facts which are necessary to enable the judge to exercise his discretion properly and fairly between the parties, bearing in mind that he has not at that stage heard the defendants' side of the case, and bearing also in mind the hardship and inconvenience which a Mareva injunction causes.” (emphasis added) [20] It follows that material facts are facts that are necessary to enable the court to exercise its discretion properly and fairly in deciding on the Ex-Parte Injunction Application. [21] In the present case, I find that the plaintiff had sufficiently provided information on the 1st to 7th defendants, including their respective roles, while employed with the plaintiff. The roles of the 1st to 7th defendants, which are set out in the affidavit in support of the Ex-Parte Injunction Application, relate to software engineering, software support and project management. From these roles, it is clear that they would have had access to the Swisslog WMS and the Confidential Information. [22] Thus, I am of the considered view that the defendants are misconceived in contending that there was insufficient disclosure of facts related to the 1st to 7th defendants in the Ex-Parte Injunction Application. [23] Further and in any event, the fact that the 1st to 7th defendants are merely support staff of the plaintiff (as alleged by the defendants) is not relevant to the plaintiff’s claim. The evidence before the court suggests that the 1st to 7th defendants would have had access to the Swisslog WMS and the Confidential Information and on that basis, they may be made liable for infringement of the plaintiff’s copyright in the Swisslog WMS and for breach of confidentiality. [24] Next, the defendants contended that the plaintiff had knowledge of the existence of the 11th and 12th defendants since as early as 2022, in view of an industrial relations dispute involving its former employee, Phuah. The defendants further contended that the plaintiff’s failure to disclose this knowledge to the court during the hearing of the Ex-Parte Injunction Application warrants the setting aside of the Ex-Parte Injunction Order. The plaintiff does not deny having such knowledge, but contended that the information is not material. [25] I do not accept the defendants’ contention. The material question is whether disclosure of the plaintiff’s prior knowledge of the 11th and 12th defendants would have affected the court’s decision on the Ex-Parte Injunction Application. In my judgment, it would not. There is no evidence that such knowledge gave rise to any suspicion of copyright infringement or unauthorised disclosure of confidential information. This knowledge was acquired in the context of an industrial relations dispute involving Phuah, and the document relied on appears to be a set of presentation slides relating to warehouse distribution services. Nothing in those documents could reasonably have alerted the plaintiff to the risk of infringement of the copyright of the Swisslog WMS. Accordingly, I find the omission to be immaterial. [26] Thus, based on the above findings, I am of the view that there is insufficient evidence to support the defendants’ contention that the plaintiff failed to provide full and frank disclosure in the Ex-Parte Injunction Application. E. Issue 2: Did The Plaintiff Fail To Provide Proof That The 1st, 2nd, 3rd And 5th Defendants Possess Evidence Or Will Destroy Evidence? [27] The 1st, 2nd, 3rd and 5th defendants claimed that they do not have the items listed in Schedule A and Schedule B of the Ex-Parte Injunction Order (“Listed Items”). The Listed Items are: a. In Schedule A, documents that include a copy of the Woodtrees Software, its source codes, object codes and databases, and letters, correspondences and messages related to the production, distribution and sale of the Woodtrees Software; and b. In Schedule B, documents and information that are essentially the Confidential Information. [28] However, following the execution of the Ex-Parte Injunction Order, it became apparent that the 1st, 2nd, 3rd and 5th defendants’ contention cannot be sustained as the Listed Items were in fact found in their devices. They include the following: a. The plaintiff’s source codes; b. Source code folders that contain similar hits between both the source codes for the Swisslong WMS and the Woodtrees Software; c. The plaintiff’s interface standard; d. The plaintiff’s change request design documents; e. The plaintiff’s software functional specification and host interface specification; f. A “GLS BNDC” file, used in the plaintiff’s software solution; g. Suppliers’ quotations directed to the plaintiff; h. The plaintiff’s customer care practices; i. Costing documents and productivity budgets; j. Text editing guidelines and templates; k. Information on customers; and l. Information on the plaintiff’s employees and former employees. [29] The dishonesty shown by the 1st, 2nd, 3rd and 5th defendants in denying that the Listed Items were in their possession has led the court to conclude that there is a propensity for them to destroy evidence that may incriminate them. It is to be noted that direct proof is not required to establish the propensity of a party to destroy evidence, as held in the Singapore Court of Appeal of Nikkomann Co Pte Ltd v Yulean Trading Pte Ltd [1992] SLR 980: “68 Appellants’ counsel, citing Ormrod LJ’s judgment in Anton Piller KG v Manufacturing Processes Ltd [1976] 1 All ER 779, submitted that there was no evidence that there was a possibility that the appellants might destroy incriminating documents before any application inter partes could be made. 69 We can dispose of this argument quite shortly. The appellants’ conduct in relation to the execution of the joint venture, which we have referred to more than once, was sufficient to give rise to concern that they might try to cover their trails by putting incriminating documents out of Yulean’s reach. In such matters, it would be unreasonable to expect direct evidence. The court is justified in drawing inferences from the demonstrated propensity of a party.” (emphasis added) [30] In the present case, I find the 1st, 2nd, 3rd and 5th defendants’ claim that the Listed Items were not in their possession – which claim has been proven to be false – supports an inference that the defendants are willing to conceal the true extent of materials in their possession. In the context of electronically stored information where data may be easily altered or deleted, such conduct gives rise to a real risk that relevant evidence may be destroyed or rendered inaccessible. In these circumstances, I am of the view that direct evidence of an intention to destroy documents would not be required. It is sufficient that the defendants’ conduct demonstrates a willingness to withhold or misrepresent the existence of incriminating materials. [31] Based on the above, I find that the plaintiff had provided sufficient proof that the 1st, 2nd, 3rd and 5th defendants possess evidence that may incriminate them, and would be likely to destroy such evidence. F. Issue 3: Was The Ex-Parte Injunction Order Oppressive And Extreme? [32] The 1st, 2nd, 3rd and 5th defendants argued that the Ex-Parte Injunction Order was oppressive and extreme, as the delivery-up component of the order would lead to a risk of the defendants’ confidential information being revealed to third parties, and their devices not being returned to them within a reasonable time. [33] I am unable to accept this contention. The delivery-up order – which forms part of the Ex-Parte Injunction Order – is a relatively straightforward remedy requiring the defendants to return specific documents and information. The order is necessary for the purpose of preservation of evidence. The delivery-up order is materially less intrusive than an Anton Piller order. Unlike an Anton Piller order, it does not authorise entry into premises or the unilateral search and seizure of documents and information. Rather, it requires the defendants to produce specified items. [34] In addition, the Ex-Parte Injunction Order contains safeguards to preserve the defendants’ rights. These include: a. The appointment of supervising solicitors, to oversee the execution and ensure compliance with the order by all parties; b. The engagement of a forensic expert to perform the process of imaging and extraction of data, to minimise the risk of evidence tampering by any party; c. The provision of a data protocol for the process of imaging and extraction of data, to ensure fair and proper conduct of evidence handling; and d. The granting of a protective order over data used in these proceedings, which would allow for any affidavit containing such evidence to be filed manually and be kept confidential by the parties involved, thus ensuring the preservation of the confidentiality of information. [35] The Ad-Interim Injunction Order was also amended at the request of the defendants, to preserve the confidentiality of the defendants’ information by limiting the delivery of the extracted data only to solicitors, and not to the parties in these proceedings. [36] It is also pertinent to highlight that the defendants’ allegation that their devices will not be returned to them within a reasonable time is unfounded, as the evidence shows that the defendants’ devices were returned within a reasonable time after the process of imaging was completed. [37] As such, based on the safeguards put in place in the Ex-Parte Injunction Order and the Ad-Interim Injunction Orders, and the manner in which the defendants’ devices were handled by the plaintiff, I find the claim that the Ex-Parte Injunction Order is oppressive and extreme to be unsubstantiated. G. Issue 4: Was There Non-Compliance With The Ex-Parte Injunction Order? [38] The allegation of the plaintiff’s non-compliance with the Ex-Parte Injunction Order raised by the 1st, 2nd, 3rd and 5th defendants relates to: a. The service of the Ex-Parte Injunction Order at 7 am; b. The conduct of the supervising solicitors in ignoring the 1st, 2nd, 3rd and 5th defendants’ objection against the seizure of devices containing the Confidential Information; and c. The claim that the Ex-Parte Injunction Order was used as an intimidation tool. [39] I find that the timing of the service of the Ex-Parte Injunction Order is not abusive and is not in breach of the terms of the Ex-Parte Injunction Order. The Ex-Parte Injunction Order does not contain any restrictions on the timing of its service. Further, the timing of service at 7 am is reasonable, taking into account all circumstances, including the likelihood of the 1st, 2nd, 3rd and 5th defendants being at home at that time, and the practical need for them to obtain legal advice promptly following service. [40] In respect of the conduct of the supervising solicitors, the 1st, 2nd, 3rd and 5th defendants have not provided any evidence that the seizure of their devices was carried out in a manner that does not comply with the terms of the Ex-Parte Injunction Order. [41] Neither is there any evidence that the Ex-Parte Injunction Order was used by the plaintiff as an intimidation tool. Ultimately, the evidence before the court clearly indicates that the Ex-Parte Injunction Application was made to preserve evidence for the purpose of the plaintiff’s claim. [42] Thus, the court finds that the Ex-Parte Injunction Order is not an abuse of the process of the court. H. Issue 5: Have The Requirements For The Grant Of A Delivery-Up Order And An Interim Injunction Been Met? [43] The requirements for the grant of a delivery-up order are set out in Hyperama Plc v Aristeidis Poulis [2018] EWHC 3483. The United Kingdom High Court first acknowledged that a delivery-up order – referred to as an order requiring a defendant to deliver up various properties on its doorstep – is a variation of a search order obtained in Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55. [44] After considering the test for the grant of an Anton Piller order – which is an “extremely strong prima facie case” – the court held that the following principles would apply to a delivery-up order: “23. Accordingly, I approach this application on the following basis:

23.1 First, I apply the elevated standard of whether I have a high degree of assurance that Hyperama will be able to establish its claims at trial in view of the strength of the order that is sought. Such standard is not significantly different from the “extremely strong prima facie case” required to justify a search order but, given that the order is less invasive, I accept that it may be that less is required to justify a doorstep order.

23.2 Secondly, I consider whether Hyperama has established that the damage, potential or actual, to its business interests is very serious.

23.3 Thirdly, I consider whether there is clear evidence that the Defendants have incriminating documents in their possession.

23.4 Fourthly, I consider whether there is a real possibility that the Defendants might destroy such material before any inter partes hearing can take place.

23.5 Fifthly, I consider whether the relief sought is proportionate to its legitimate aims.” (emphasis added) [45] I find the approach adopted in Hyperama (supra) to be persuasive. In this regard, the applicable test for the grant of a delivery-up order is whether there is a high degree of assurance that the plaintiff will be able to establish its case against the defendants. As recognised in Hyperama (supra), this standard is not materially different from the “extremely strong prima facie case” required for an Anton Piller order, although it may be somewhat less exacting in light of the less intrusive nature of a delivery-up order. [46] Further, as noted in a more recent case, Nix v Emerdata Ltd [2024] EWHC 125 (Comm), the presence or absence of a high degree of assurance is not the determining factor in the grant of a delivery-up order. Other factors, such as whether there is clear evidence that a defendant has incriminating documents in its possession, whether there is a real possibility that it might destroy the evidence, and whether the relief sought is proportionate to its legitimate aim, are also relevant for the court to consider in granting such an order. [47] Applying the test in Hyperama (supra) to the present case, I find that there is a high degree of assurance that the plaintiff will be able to establish a case against the defendants. There are three reasons for this finding. [48] The first is the nature of the similarities between the Swisslog WMS and the Woodtrees Software. The similarities identified are not merely functional or generic features. They include specific elements such as identical or highly similar source code structures, unique terminologies (including the use of the term “janitor” for data clean-up), and closely corresponding user interface designs and configurations. In the absence of any plausible explanation from the defendants, such similarities are more consistent with copying than with independent development. [49] In Onestop Software Solutions (M) Sdn Bhd v Masteritec Sdn Bhd [2009] 8 MLJ 528, the court held that in comparing two computer programmes, where the allegation is that the defendant had copied the plaintiff’s computer programme but denied copying, the proper inference is that similarities not explained by independent evidence are due to copying and not to programming style. In the present case, although the defendants had denied similarities between the Swisslog WMS and the Woodtrees Software, they have not provided any reasonable explanation for the unique similarities between the two software programmes, and how the similarities arose. [50] The second reason relates to timing. The 11th defendant was established in 2021, and the Woodtrees Software was first sold in 2023. The short frame of time between the establishment of the 11th defendant and the commercial deployment of the Woodtrees Software, as well as the similarities between the features of the Swisslong WMS and the Woodtrees Software support an inference that the Woodtrees Software was developed with reference to the Swisslog WMS. [51] Third, it has been established that the 1st to 10th defendants were employed by the plaintiff and had access to the Swisslog WMS and/or the Confidential Information. Following this fact, a strong inference arises that the defendants made unauthorised use of, or disclosed the Confidential Information for the benefit of the 11th defendant. This inference is reinforced by the fact that certain defendants held undisclosed interests in the 11th defendant while remaining in the plaintiff’s employment, thereby placing themselves in a position of conflict of interest and potential breach of fiduciary duty. [52] From the evidence set out above, I find there to be a high degree of assurance that the plaintiff would succeed in its case of copyright infringement, breach of confidence, conspiracy, and/or breach of fiduciary duty against the defendants. It is important to highlight that at this stage of the proceedings, it is not necessary for the plaintiff to prove its case in full. It is sufficient that the court is satisfied, on available materials, that there is a high degree of assurance of success, which may properly be established by cogent circumstantial evidence and reasonable inferences drawn therefrom. [53] In respect of the other factors set out in Hyperama (supra), I find that: a. Serious damage may be caused to the plaintiff’s business as a result of the act of copyright infringement and breach of the Confidential Information. The negative effects of these actions are unlikely to be able to be reversed; b. The plaintiff has provided sufficient proof that the defendants are in possession of evidence that would be likely to incriminate them, and that they have the propensity to destroy such evidence. This has been elaborated in Part E above; and c. In view of the negative effects of the act of copyright infringement and breach of the Confidential Information which is unlikely to be able to be reversed, the relief sought is proportionate to its legitimate aim. The order is subject to safeguards including supervision by the supervising solicitors and forensic protocols, and does not authorise unrestricted access to the defendants’ premises or materials. These features appropriately balance the plaintiff’s interest in preserving evidence against the defendants’ rights to privacy and confidentiality. [54] Further, applying Keet Gerald Francis Noel John v Mohd Noor Bin Abdullah [1995] 1 MLJ 193, the court also finds that the balance of convenience lies in favour of granting the Inter-Parte Injunction Application. Had the court not granted the Ex-Parte Injunction Order, evidence in the possession of the 1st, 2nd, 3rd and 5th defendants would not have been obtained and would have been at risk of being destroyed. Further, the defendants would continue using the Confidential Information, which would have led to the loss of confidentiality and the commercial value of the information. [55] The defendants alleged that an injunction order would cause irreparable harm to the defendants, particularly the 11th defendant as it would result in a complete halt to its business operations. I find this allegation to be misconceived. An injunction order would not result in the 11th defendant’s business operations being stopped. The 11th defendant is free to continue its business activities, as long as it does so without infringing the plaintiff’s copyright or using the Confidential Information. [56] Further, although the defendants may suffer some disruption arising from the delivery-up process, such prejudice is mitigated by the safeguards built into the order, and is in any event, reversible. By contrast, the loss of confidential information and the destruction of evidence would cause irreparable harm to the plaintiff. [57] On the question of whether damages would be an adequate remedy, I am guided by Centek Ltd v Farrah Dheeba bt Shaiful Ridzuan [2021] 9 MLJ 548, where it was acknowledged that damages are not an adequate remedy in cases involving breach of confidentiality. The High Court held that: “[116] It is to be noted that in cases involving breaches of confidence in confidential information, the court have judicially recognised that damages are not an adequate remedy to the plaintiff because of the difficulty involved (see Svenson Hair Center Sdn Bhd v Irene Chin Zee Ling [2008] 7 MLJ 903; [2008] 8 CLJ 386).” (emphasis added) [58] Based on the findings above, I am of the considered view that the requirements for the grant of a delivery-up order and an interim injunction have been met in this case.

[59] The court finds that the plaintiff has established a sufficient basis for the grant of the Inter-Parte Injunction Application, while the defendants have failed to justify the setting aside of the Ex-Parte Injunction Order and the Ad-Interim Injunction Orders. [60] As such, the court dismissed the Setting-Aside Applications, and allowed the Inter-Parte Injunction Application based on the terms of the Amended Ad-Interim Injunction Order. Dated 13 April 2026 ADLIN ABDUL MAJID Judge High Court of Malaya Kuala Lumpur Counsel: Plaintiff: Cindy Goh (together with Jessye Ng and Nur Syamimi Amalina Mohd Munir) of Messrs. Cheang & Ariff 1st, 2nd, 3rd, 5th, 6th, 7th, 11th and 12th defendants: Wong Joon Wye (together with Yong Hui Ying) of Messrs. JW Wong & Partner