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TIPO Preparing to Add Criminal Liability in the Amendment to Trade Secret

TIPO Preparing to Add Criminal Liability in the Amendment to Trade Secret

To strengthen the protection of trade secrets, the Intellectual Property Office (TIPO) of the Ministry of Economic Affairs (MOEA) has begun preparing a draft amendment to the current Trade Secret Act, providing that severe infringement of trade secrets will be subject to criminal penalties.

According to Articles 11 to 13 of the current Trade Secret Act, acts of trade secret infringement are subject to civil but not criminal liabilities.

Trade secrets are the result of huge capital investment by enterprises, particularly in the field of science and technology, and damage would be irreparable once secrets were disclosed. In recent years, Taiwan has witnessed a series of severe trade secret leakage in the industries, which led to huge losses and wreaked havoc on domestic R&D.

In light of related laws and regulations of other countries, in particular the Economic Espionage Act of 1996 in the United States and the gradual increase of both civil and criminal liabilities regarding trade secret infringement in Japan, it has become obvious to TIPO that Taiwan should follow suit by strengthening relevant legislation.

On February 23, 2012, TIPO convened a meeting and invited experts, scholars and representatives from relevant government agencies to exchange views on topics including: whether criminal liability should be added to the Trade Secret Act, how to define acts that constitutes trade secret infringement. While opinions from the industry representatives also includes adding criminal liability, they also discussed issues including: reducing the burden of proof provided by victims of disclosed trade secrets, mandatory submission of documents, raising the amount of damages, extending the duration of claims, and strengthening the training of judicial officers.

TIPO is preparing a draft amendment to the Trade Secret Act, wherein the provisions will include adding criminal liability, defining acts that constitute trade secret infringement, and adding provision on criminal liability of legal persons. TIPO will continue to organize public hearings to seek opinions from all sectors in the hope of achieving maximum social consensus.

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