Trade Secrets

Last Updated: June, 2010

Legislation

Taiwan's Trade Secrets Act provides for protection of trade secrets belonging to both Taiwan citizens and citizens of WTO member countries including the United States.  Under Article 2 of the Trade Secrets Act, trade secrets include the following:

"any method, technique, process, formula, program, design, or other information that may be used in the course of production, sales, or operations and also meets the following requirements:

• It is not known to persons generally involved in the information of this type;
• It has economic value, actual or potential, due to its secretive nature; and
• Its owner has taken reasonable measures to maintain its secrecy."

Trade secrets may not be registered, as their function is to prevent disclosure of information that remains a secret from the public.  Articles 3-9 of the Trade Secrets Act provide detailed definitions of ownership.  As a rule, trade secrets belong to an employer if they result from an employee's work during employment or while using resources belonging to the employer.  Contract language determines ownership in cases involving joint-development of a trade secret, and/or licensing and assignment of trade secrets.  To prevent trade secret disputes, it is important to carefully review all contracts before entering into any agreements with employees, business partners, and contractors.

What Constitutes Infringement?

Article 10 of the Trade Secrets Act defines acts that are considered misappropriation of trade secrets.  These include "acquiring, using, or disclosing a trade secret by improper means," as well as "using or disclosing an acquired trade secret knowing, or not knowing due to gross negligence, that it is a trade secret."

How to Address Infringement

Like patents, trade secret disputes must be resolved through civil litigation, although criminal remedies are available in the event that a trade secret is obtained through criminal means such as larceny, bribery, or fraud.  Rights to claim for damages expire two years after the trade secret owner has knowledge of the infringement or ten years from the act of infringement.  Damages are determined according to Article 13 of the Trade Secrets Act.  Complaints may be filed with the court covering the jurisdiction in which the infringement allegedly took place. 

Note that in some cases, there may be a cross-border aspect to the matter that may provide further recourse to strong criminal laws in the other jurisdiction.

Additional Resources

Information on organizations, government agencies, and law firms handling IPR-related issues is available here.