Clifford Chance

Technology impacts on every area of business in every sector. It is integral to the management and operation of a company and its systems, processes and data; delivering products and services; and engaging with customers and creating new business models. The emergence of technologies including blockchain, big data, artificial intelligence (AI) and quantum computing have opened up further opportunities. But this increasing reliance on technology and the novel legal questions raised by new technologies can give rise to complex disputes across multiple jurisdictions. In 2022, we saw an increasing number of tech disputes in the Asia Pacific (APAC) region focusing on cryptoassets, data breaches and the use of AI. We expect this trend to continue in 2023.

In this Guide (Download the Guide), we will explore the issues that give rise to tech legal disputes, including the following:

• Protection and enforcement of technology-related rights – such as intellectual property (IP) rights in technologies and databases, and rights to exploit and monetise data – remain fundamental for the survival of companies across sectors. Attention is focused on the application of established legal principles in relation to evolving technologies, such as views on authorship, inventorship and liability in relation to AI, issues of control and recourse in relation to smart contracts, and the concepts of property and ownership when applied to digital assets and virtual worlds. Disputes testing these issues can also face challenges in obtaining and enforcing court remedies; for example, where assets are intangible, or the operation of an algorithm is difficult to explain or predict.
• As new and evolving technologies are being pioneered across a range of sectors, they continue to raise novel questions concerning the conduct of product liability claims. Failure to adequately address the risks and responsibilities arising from technology use gives rise to contractual disputes in relation to supplier contracts, investment agreements and collaboration documents.
• Shifting economic conditions and geopolitical tensions are expected to generate further disputes as bankruptcies, financial distress and collateral events disrupt certain markets – including, notably, cryptoasset markets – which can, in combination with resource and component shortages and distribution network bottlenecks, place some technology supply chains under strain.
• Antitrust authorities are continuing to focus on regulation of the digital sphere and of technology giants, with associated investigations and litigation increasing as prominent companies come under scrutiny for alleged anti-competitive behaviour connected with their use of technology and data.
• Companies are also navigating issues raised by an increasingly complex regulatory landscape in relation to technology and data. Data breaches, data misuse and the illegal transfer of personal data remain key litigation and enforcement risks due to a global proliferation of heavy-hitting data governance laws, international data flows being more challenging than ever before, and increasingly strict cybersecurity standards in many parts of the world. Technology investments and transactions, as well as launches or expansions of technology-focused companies, face increasing numbers of hurdles to overcome, including in relation to sanctions, money laundering, export controls, investment controls, licensing requirements and other restrictions. New regulatory frameworks are being established in relation to digital services and new technologies such as digital assets, with associated claims, disputes and regulatory enforcement action expected to follow as contractual rights and obligations are affected and company compliance programmes struggle to keep pace with developments in this area.

Developing a litigation strategy

When a dispute arises, consideration needs to be given to the available legal remedies and causes of action, the availability of rapid interim relief and the types of evidence that need to be gathered, in order to prevail at trial or to arrive at the optimal negotiated settlement. Such considerations should inform any litigation strategy in a technology-related dispute and influence the implementation of an overall digitalisation strategy.

In addition, large-scale technology-related litigation has become increasingly international. Disputes are frequently litigated in multiple forums, thereby increasing the complexity of such litigation. Technology companies must be prepared to litigate anywhere in the world. Commercial activity in virtual worlds adds another layer of jurisdictional complexity and will raise novel practical considerations if litigation and arbitration proceedings begin to be conducted in the metaverse or forays into “on-chain arbitration” occur.

As a consequence, litigation and arbitration strategy increasingly requires a combination of international disputes management expertise with legal specialisation in technology and data.

About this Guide

This Guide sets out some key issues arising from technology protection, regulation and disputes in Asia-Pacific. Each section features a summary of the key issues and provides guidance on how companies operating in each of the jurisdictions highlighted should best protect and enforce their IP in a digital environment, protect their data and data privacy and handle cybersecurity incidents, and deal with a range of technology regulation and disputes, such as in the areas of AML, sanctions, anti-trust, fintech, responsible tech and product / contractual liability.

The Guide covers technological issues in five key jurisdictions: (1) Hong Kong, (2) China, (3) Singapore, (4) Japan and (5) Australia. It is based on contributions from Clifford Chance’s regional network in Asia Pacific.

Download the Guide