Trade Secrets Law in Taiwan
Taiwan's trade secrets are primarily governed by the Trade Secrets Act (TSA), enacted on January 17, 1996, and amended on January 15, 2020. The Act defines a trade secret as any method, technique, process, formula, program, design, or other information that may be used in the course of production, sales, or operations, provided it meets the following criteria:(
It is not generally known to persons involved in information of this type;
It has actual or potential economic value due to its secretive nature;
Its owner has taken reasonable measures to maintain its secrecy.
🛡️ Legal Protections and Enforcement
The TSA prohibits the misappropriation of trade secrets through improper means, such as theft, fraud, coercion, bribery, unauthorized reproduction, or breach of confidentiality obligations. Violations may result in civil and criminal liabilities, including:
Civil Remedies: Injunctive relief, damages, and recovery of profits gained from the infringement.
Criminal Penalties: Imprisonment and fines, with penalties increasing for repeat offenders.
Additionally, the National Security Act addresses the protection of critical technologies, with stricter penalties for misappropriation related to national security. For instance, the misappropriation of trade secrets concerning core technologies may lead to imprisonment ranging from 5 to 12 years.
🧭 Ownership and Employment-Related Considerations
Employee Inventions: Trade secrets resulting from research or development by an employee during employment generally belong to the employer, unless otherwise stipulated in the employment contract.
Third-Party Research: If a trade secret arises from research contracted to a third party, ownership is determined by the terms of the contract.
Joint Research: In cases of joint research, ownership shares are determined by the contract; absent a contract, equal ownership is presumed.
🛡️ Practical Measures for Protecting Trade Secrets
To safeguard trade secrets, businesses should:
Implement Confidentiality Agreements: Use non-disclosure agreements (NDAs) with employees, contractors, and business partners.
Adopt Security Measures: Employ physical and digital security protocols, such as restricted access, encryption, and secure storage.
Educate Employees: Conduct training on the importance of confidentiality and the company's policies regarding trade secrets.
Classify Information: Clearly label and classify sensitive information to indicate its confidentiality level.
🌐 International Considerations
Taiwan provides protection for foreign trade secrets based on the principle of reciprocity. If a foreign national's home country does not deny protection to Taiwanese trade secrets, and the foreign national's trade secrets meet the requirements of Taiwan's TSA, they will be protected under Taiwanese law.
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