The Executive Yuan Council passed a draft amendment to the Trade Secrets Act today and will send it to the Legislature for review.
"Trade secrets are an essential part of our intellectual property rights strategy, which is a key item of the Economic Power-Up Plan," Premier Sean Chen said.
Proposed by the Ministry of Economic Affairs (MOEA), the amendment introduces criminal liability for violations, prescribing imprisonment of up to five years in addition to a fine of up to NT$10 million (US$342,000). Penalties will be toughened for violations overseas: imprisonment of more than six months and less than five years plus a fine of up to NT$50 million (US$1.71 million). These revisions are expected to effectively ward off potential infringement and properly protect the fruits of Taiwanese innovation and research and development (R&D).
Chen pointed out that there have been serious cases of employees stealing, appropriating or leaking information from their former employers in recent years. These acts have made a notable impact on the production of R&D results and the fairness of competition between businesses. Although some stipulations such as Article 317 of the Criminal Code impose criminal penalties on trade secret offenses, they have failed to apply to some cases. The premier directed the MOEA to actively negotiate with the legislative caucuses to complete the ratification process as soon as possible.
The Trade Secrets Act has not been revised since it came into force on January 17, 1996, according to the MOEA. Many countries have adjusted their related trade secrets laws during this time due to the increasing complexity of the international business environment, with adding criminal liability and increasing penalties to counter these threats being a major trend.
Although Articles 317, 318-1 and 318-2 of the Criminal Code stipulate that trade secret misappropriation is a crime, as of now only disclosure of secrets without reason may be punished, not the misappropriation of secrets and illegal use of the same. Hence, these laws are considered insufficient to protect trade secrets because their provisions are not inclusive enough and their punishments are too lenient. This amendment is intended to remedy that. Its major contents are as follows:
1. Several forms of violations against the preservation of trade secrets are specified. Those found guilty of such crimes may henceforth be sentenced to imprisonment or detention of up to five years and a fine of NT$50,000-10,000,000 (US$1,707-$341,530). (Article 13-1)
2. Punishments will be even more severe if an attempt to use a misappropriated trade secret or any other violation of Article 13-1 occurs overseas. (Article 13-2)
3. A complaint will have to be filed for a trade secret misappropriation case to come to trial. (Article 13-3)
4. If any corporate or natural person's representative, proxy, employee or personnel engages in trade secrecy misappropriation to fulfill work duties, in addition to the penalties meted to the offender, that corporate or natural person will be fined as well. (Article 13-4)
5. To speed up the litigation process, if the plaintiff provides a substantial argument supporting his accusation of a definite or likely trade secret misappropriation, and the defendant denies the charge, the latter must provide a substantial argument of his own. If the defendant does not reply to the charge within a given period of time without good reason or his argument is unsubstantial, the court should consider the plaintiff's charge as true. (Article 14-1)