Deep & Far Newsletter 2014 ©
August, 2014

The Minutes from the Public Hearing on Proposed Amendments to Trade Secrets Act (Part Ii)

Wei-Ting Chou, Patent Director, Patent Group I

¡½ Master of Agricultural Engineering, National Taiwan University

¡½ Bachelor of Medical Engineering, National Cheng Kung University


Comments from MediaTek Inc. and the Taiwan Semiconductor Industry Association:

1. In Article 10 of the proposed amendments, the conditions are classified in a complicated manner.  In addition, it is suggested to adopt the stipulation that a complaint is divisible.

2. In a company of a foreign country, if there is an employee who would like to resign, the company will ask the employee to give reasons for the resignation, but, objectively, this will not inhibit job-hopping.

Comments from Dones Day Attorneys-at-Law and the American Chamber of Commerce:

1. The law in force now cannot protect trade secret.  In addition, Paragraph 1 of Article 14 in the proposed amendments only stipulates assistance obligation, but not reversion of burden of proof.  In addition, it should be stipulated that once intentional behavior or gross negligence can be proved, an increase in the amount of damage should be claimable.

2. A trade secret is not only an issue of intellectual property, but also an issue of fair trade.  Therefore, the amount of damage should be considered with reference to fair trade.

3. The punishment in Article 13-1 in the proposed amendments should be based on a potential damage offense.

4. Article 14-1 in the proposed amendments is important.  Although the Code of Civil Procedure requires obligation of submitting instruments, its effect is still limited.  Not only the Trade Secret Act, but also the Intellectual Property Jurisprudence, particularly, the Patent Act, should be amended.

Comments from Lawyer Chang Ching:

1. Clause 2 of Article 10 of the law in force now stipulates there is knowledge or gross negligence while indirectly acquiring, and Clause 3 stipulates there is knowledge or  gross negligence after indirectly acquiring.  However, Clause 5 of Paragraph 1 of Article 13-1 in the proposed amendments only stipulates there is gross negligence upon acquiring, and does not stipulates the stipulation after indirectly acquiring; and the clause only stipulates actual knowledge, but does not stipulate dolus indeterminatus.  As a suggestion, the phrase ¡§actually knows¡¨ should be amended to ¡§known¡¨.

2. Clause 4 of Paragraph 1 of Article 13-1 in the proposed amendments does not stipulate that the deletion or destruction should be made based on law and regulation.  It is, however, more than necessary to have punishment based on law and regulation, or the penalty will be unfair.  As a suggestion, the language ¡§intends to use in foreign countries, Mainland China, Hong Kong, or Macau¡¨ in Article 13-2 should be amended to ¡§intends to use in jurisdictions outside the Republic of China¡¨.

3. For Scheme B in Article 13-4 in the proposed amendments, the amendment suggests narrowing the scope of the dual punishments.  However, in fact, it broadens the scope of the punishments.  Scheme A stipulates the juristic person and natural person, but, Scheme B, instead, stipulates the corporate and non-corporate bodies.  It is unclear why there is such difference.  Furthermore, Scheme B creates that either a complaint or withdrawal of the complaint is divisible, which is incompatible with the current complaint principle.  This incompatibility is a serious issue.

4. In Article 14-1 in the proposed amendments, there should be a balance between the burdens of both parties.

Comments from the Intellectual Property Court:

1. Attention should be given to both the protection of enterprises and the guarantee of work rights of general laborers to have appropriate and fair stipulations.  The constituent elements in either a civil or criminal event should be strictly determined and clearly defined.  A case is as follows.  The manager of a company had a copy of trade secrets on a laptop, and then he resigned.  The company, although actually knowing this, did not ask him to delete them, but filed a complaint thereagainst after the resignation.  The Court found no infringement of trade secrets because the company knew it.  Accordingly, it is a question whether the punishment for a behavior of ¡§bringing out¡¨ in Paragraph 3 of Article 13 is too stringent for an employee.  However, there is a circumstance that the company knows that the employee in service may take a copy of trade secrets home for convenience, but this does not mean that an authorization is given thereto.

2. A trade secret should be kept in secret, and thus will be more valuable if known to fewer people.  Therefore, it is a question whether an illegal acquirement has reduced the value of the trade secret.