Proposal to Add Criminal Liability for Violation of Trade Secrets Act

In response to the outcry of high technology sectors for stiffer penalties for violation of the Trade Secrets Act (the “Act”), Economics Minister Shih Yen-shiang signaled recently a proposal to incorporate criminal penalties in the Act to curb the crime of trade secrets.  The recent outcry for stiffer penalties stems from weak legislation of the traditional penal statute to protect the trade secrets and as the time passes, there is increasingly a greater stake for high-tech sectors such as the recent outbreak of a case of two senior employees who were allegedly leaving Au-Optronics for its competitor, China Star of the TCL Group in China, along with files containing valuable panel display technology, which technology for one thing was among items subject to export controls.  The proposed revision to the Act, if passed by the legislature, will contain clear provisions relating to economic espionage, and cross-border violation, and will close the loopholes in the traditional penal statute as it relates to illegal access and possession of the trade secrets, and last but not the least important, an obligation of a defendant in a trade secret act violation case to bear some burden of (counter) proof, i.e. the alleged violation has not arisen, which otherwise would have been the plaintiff’s burden had it not been for the new amendment of the Act.