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2025 MarsdenLR 225
HIGH COURT MALAYA PENANG
ONNET CONSULTING SDN BHD & ANOR – Appellant
Versus
AM PM PHARMACY SDN BHD & ORS – Respondent
[Civil Suit No: PA-22NCvC-199-12/2023]
Plaintiffs failed to prove copyright ownership of the ODOO ERP system, resulting in dismissal of claims for infringement and breach of contract.
Headnote:(A) Copyright Act 1987 - Section 36(1) - Breach of contract - Duty of confidentiality - Plaintiffs claimed copyright infringement and breach of duty of care regarding the ODOO ERP system after migration to a third-party server without consent - Court found Plaintiffs failed to prove ownership of copyright and that no breach occurred. (Paras 19, 20, 62, 93)
(B) Burden of proof - Plaintiffs must establish copyright ownership and infringement - Failure to provide evidence of the ODOO ERP system and comply with statutory requirements led to dismissal of claims. (Paras 22, 59, 60)
(C) Duty of care - No duty owed by Defendants to Plaintiffs as customer-supplier relationship existed - Migration was conducted under the advice of Andrew, who was deemed representative of the Plaintiffs. (Paras 85, 86, 90)
Facts of the case:
The Plaintiffs, providers of the ODOO ERP system, sued the Defendants for copyright infringement and breach of contract after the system was migrated to a third-party server without their consent. The 3rd Defendant did not participate in the trial due to a prior consent judgment.
Findings of Court:
The Plaintiffs failed to prove ownership of the copyright and that the Defendants committed any infringement or breach of duty of care.
Issues: Whether the Plaintiffs own the copyright of the ODOO ERP system and if the Defendants breached any duty of care or contract.
Ratio Decidendi: The court ruled that the Plaintiffs did not establish copyright ownership or infringement, and the migration was conducted with the consent of their representative, Andrew.
Result: Plaintiffs' action dismissed.
JUDGMENT
Introduction
[1] This action arises from the download, transfer and migration of a certain 'ODOO ERP system' from the 2nd Plaintiff's hosting server to the 3rd Defendant's hosting server. The Plaintiffs sue the Defendants for multiple causes of action based on:- (i) breach of contract (specifically with regard to the duty of confidentiality), (ii) copyright infringement and (iii) breach of a duty of care in respect of the ODOO ERP system.
[2] The 3rd Defendant did not participate in the trial of the instant suit. This is because the 3rd Defendant and the Plaintiffs entered into a consent judgment on 5 August 2024. Accordingly, the reference herein to the Defendants shall mean the 1st Defendant ("D1") and the 2nd Defendant ("Andrew").
[3] After a full trial, I dismissed the Plaintiffs' claim. Here are the grounds of my judgment.
Background Facts
[4] The 1st Plaintiff ("P1") provides advisory and consultancy services, computer software solutions, computer applications and programming. P1 says that it is the ODOO partner in Malaysia. D1 says that P1 is actually a reseller of the ODOO software, which originated from Belgium.
[5] The 2nd Plaintiff is a web hosting provider. Its role in this matter was as the host server provider of the ODOO ERP system.
[6] P1 and D1 entered into a letter of confirmation dated 6 February 2018 ("letter of confirmation"). Whereby P1 would provide system consultation and install the ODOO ERP system, together with the ensuing post - implementation maintenance services, to D1 ("project"). D1 says it was agreed that P1 would implement a standard ERP (enterprise resource planning) software known as ODOO.
[7] P1 says that Andrew is the contractor appointed by it to develop and implement the ODOO ERP system for D1. Andrew is in charge of its installation, implementation and post - implementation maintenance. D1 says that Andrew was held out to be the project director.
[8] In early 2023, the ODOO ERP system supplied to D1 encountered the issue of low capacity. D1 was presented with two set of solutions.
(a) First, by PW1 (Managing Director of the Plaintiffs), that the problem can be solved by upgrading the database, but a higher price is required to be paid.
(b) Second, by Andrew, that the problem can be solved by migrating the system to another server with a larger capacity. Andrew recommended the 3rd Defendant as the new hosting server.
[9] D1 accepted the second proposed solution of migrating the system to a new hosting server. Andrew then carried out the migration. The Plaintiffs say they are not aware of, and did not consent to, the migration.
The Plaintiffs' Case
[10] The Plaintiffs' case is this.
(a) P1, as the commissioner, ordered and paid for Andrew's services in developing the ODOO ERP system. Therefore, P1 owns the copyright therein.
(b) The act of downloading, transferring and migrating the ODOO ERP system to a third party hosting server, without their permission, constituted the following breaches:
(i) D1 breached the letter of confirmation. Specifically, the duty of confidentiality under cl 5 thereof;
(ii) D1 and Andrew jointly breached s 36(1) of the Copyright Act 1987 ;
(iii) D1 negligently breached the duty of care owed to the Plaintiffs in relation to the ODOO ERP system; and
(iv) Andrew breached his duty of care by conspiring with and assisting D1 in downloading, transferring and migrating the ODOO ERP system to the 3rd Defendant's hosting server.
(c) Consequent to the aforesaid breaches, P1 suffered losses in terms of technical support and post - installation maintenance for a minimum period of ten years at RM200,000.00 per year. The 2nd Plaintiff suffered losses in the form of hosting server fees on the ODOO ERP system at RM63,000.00 per year.
(d) The ODOO ERP system supplied to D1 is not an open source software. The modification works of the ODOO ERP system is the derivative work that constitutes proprietary software belonging to P1.
[11] At paragraph 32 of the statement of claim, the
