As early as in 1996, Taiwan enacted the Trade Secrets Act (the Act), only second to Sweden to have specific legislation covering this area of law. However, there was only civil liability for trade secrets misappropriation, so the Act has not been seriously enforced in Taiwan. In recent years, the high tech industry in Taiwan has suffered significant losses due to unfair competition and trade secrets misappropriation from competitors, so the major amendment was made in 2013 to add criminal penalties for trade secrets misappropriation.
In 2017, the Taiwan Intellectual Property Office (TIPO) proposed further draft amendments (the Draft) to the current Act. Set below are the main points covered by the amendments:
Prosecution for trade secrets misappropriation in a foreign jurisdiction may only be instituted upon a complaint (Article 13-1 I)
In accordance with Article 13-2 of the current Act, if the infringer commits a trade secrets misappropriation for the purpose of using the trade secrets in a foreign jurisdiction, mainland China, Hong Kong, or Macau, the prosecution for that crime may be instituted by the prosecutor.
However, in general practice, with regard to the inherent secretive nature of trade secrets, the investigation on the factual backgrounds and evidence could be arduous and time-consuming, especially if an act of misappropriation was conducted in a foreign jurisdiction.
Therefore, the Draft provides that, the prosecution for trade secrets misappropriation in a foreign jurisdiction can only be instituted upon a complaint, therefore, that complaint may be withdrawn before the conclusion of the argument in the trial. As such, the Draft will enhance the willingness of complicity to report illegal conducts to the trade secrets holders, submit evidences or assist the investigation during the investigation stage in exchange for the withdrawal of a complaint against himself/herself.
In addition, TIPO also elaborated that, the above specified amendments are believed to provide a similar effect as the whistleblower protection under US legislation.
An unrecognized foreign national may file a complaint against Trade Secrets Misappropriation (Article 13-5)
Basically, pursuant to the relevant provisions and court practices, a foreign entity without obtaining a certificate of recognition from the government of Taiwan is not entitled to file a private prosecution in the event of trade secrets misappropriation. However, the absent protection 2 to an unrecognized foreign national not only deters international investments but discourages foreign trades.
Therefore, in reference to Taiwan Copyright Act and Patent Act, Article 13-5 of the Draft provides that an unrecognized foreign national can file a complaint or bring a private prosecution against trade secrets offenses.
The restriction on the accessibility of case files and evidences during the investigation stage of trade secret misappropriation cases (Article 13-6)
In accordance Article 14 of the Act, in trade secrets infringement cases, the court may, as it deems appropriate, close the trial to the public and/or restrict access to the files of the litigation related information. However, the above Article does not specify the protection to trade secrets holders during the criminal investigation stage.
To prevent any disclosure of trade secrets during the criminal investigation stage, the Draft provides that, during the investigation stage, the prosecutor may, at the request of the parties or on his/her own motions, restrict or prohibit the accessibility to inspect, examine, make note of or take photos of the case file and evidences.
The Reciprocity Principle for foreign national trade secrets (Article 15)
In accordance with Article 15 of the Act, a foreign national's trade secrets will not receive protection in Taiwan if the foreign national's home country has not signed a bilateral trade secrets protection treaty or agreement with Taiwan or does not provide protection to trade secrets owned by Taiwan according to the laws and regulations of the foreign national's home country.
However, TIPO elaborates that the current provision does not encompass many practical circumstances, such as, if the foreign national's home country is also the member of World Trade Organization , and therefore, entered into the Agreement on Trade-Related Respects of Intellectual Property Rights (TRIPS) as Taiwan did, a foreign national's trade secrets shall also receive protection in accordance with TRIPS Agreement.
Based on the above, the Draft expands the protection for foreign national's trade secrets by providing that, a foreign national's trade secrets shall not be protected in Taiwan only in any of the following:
the foreign national's home country is not a signatory to an international treaty for protection of trade secrets to which Taiwan is a signatory; or
the foreign national's home country does not conclude with Taiwan a treaty or an agreement for reciprocal protection of trade secrets; or
no trade secret agreement is concluded by and between organizations or institutions of Taiwan and the foreign country and these have approval by the respective competent authorities; or
if the laws of the foreign country does not provide protection to trade secrets owned by Taiwan.
In sum, Taiwan increasingly recognizes the value of trade secrets protection system as it is important to its economic development and industrial competitiveness. Although the Draft has not yet been passed, it is expected that the proposed amendments will facilitate a better trade secret protection environment, with even more sophisticated enforcement measures.