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Trade secrets In Taiwan are primarily governed by the Trade Secrets Act (TSA), which defines what constitutes a trade secret and provides for both civil and criminal liabilities in cases of misappropriation. The TSA works in conjunction with article 317 of the Criminal Code, which penalises unauthorised disclosure of commercial or industrial secrets by persons with privileged access.

Additionally, the Intellectual Property Case Adjudication Act (IPCAA) offers procedural rules for handling trade secret disputes in civil and criminal courts.

Definition and ownership

Article 2 of the TSA defines a trade secret as confidential information including methods, techniques, processes, formulas, programmes and designs that is not known to the general public, holds economic value due to its secrecy, and is protected by reasonable confidentiality measures. Such measures may include non-disclosure agreements, document labelling, restricted access controls, internal classification, information tracking systems, and regular confidentiality training for employees and contractors.

Regarding ownership, unless otherwise stipulated in a contract, trade secrets developed by employees during the course of employment generally belong to the employer. If developed outside of employment, the secret belongs to the employee, although the employer may use the secret on payment of reasonable compensation.

For contracted R&D projects, ownership depends on the contract terms; without which the hiring party owns the secrets.

Misappropriation and remedies

Under article 10 of the TSA, civil misappropriation includes acquiring, using or disclosing trade secrets through improper means, knowingly or with gross negligence, or failing to maintain confidentiality when legally required.

Criminal liability under article 13-1 arises from unlawfully obtaining trade secrets by theft, fraud, coercion or other wrongful acts, whether for personal gain, third-party benefit, or to harm the rights holder. Unauthorised reproduction, use or failure to delete trade secrets after demand also constitutes criminal infringement.

Article 13-2 imposes harsher penalties for attempted unauthorised use of trade secrets abroad (including use in mainland China, Hong Kong and Macau). A trade secret owner can also initiate a civil lawsuit for misappropriation to seek injunctive relief, destruction of products or materials derived from the misappropriation, compensatory damages or restitution of unjust enrichment. Additionally, the owner can file a criminal complaint against anyone alleged to have illegally acquired, used or disclosed the trade secrets.

Enforcement, dispute resolution

Litigation forums. Courts can exercise jurisdiction if either the misappropriation or its effects occur within Taiwan. The Intellectual Property and Commercial Court (IP Court) has exclusive jurisdiction over both civil and criminal trade secret cases, including those involving national core key technologies as defined under the National Security Act.

Filing of lawsuits. The statute of limitations for trade secret civil claims varies; breach of contract and unjust enrichment claims have a 15-year limit, while tort-based damage claims must be filed within two years of discovering the misappropriation conduct and offender, or within 10 years of the act, whichever is earlier.

Criminal complaints under article 13-1 of the TSA must be filed within six months of identifying the offender, with a 30-year prosecution limit, with the exception that no limitation applies to criminal offences under article 13-2.

Interim remedies. Interim remedies are available in civil litigation pursuant to the Code of Civil Procedure. These include provisional attachment, provisional disposition and preliminary injunctions, which respectively aim to preserve the plaintiff¡¯s claims, ensure future execution, and maintain the status quo of the disputed legal relationship.

In misappropriation cases, a preliminary injunction is sought to prevent further use or distribution of the trade secret until a final judgment is rendered. Such remedies may be sought before or during a civil suit, even while a criminal proceeding is ongoing. Courts evaluate the likelihood of success and balance of interests before granting an injunction.

Evidence, disclosure, restrictions

Evidence collection and investigation. In civil litigation, courts hold preparatory hearings for parties to present arguments, evidence, clarify issues and question witnesses. The judge next schedules an oral hearing and issues a judgment. Parties may also request the court to appoint a neutral expert as an ¡°inspector¡± to verify the documents, devices or equipment held by the opposing party or third parties for evidence collection.

In criminal litigation, prosecutors gather evidence and the court assesses the evidence¡¯s validity during the trial. Multiple preparatory hearings may be held to define the scope of investigation and to summon documents or witnesses.

Disclosure rules. In civil cases, if a document is held by the opposing party or a third party, a party can request the court to compel its production, although the court has discretion over such requests. Failure to comply may lead to fines.

In criminal cases, prosecutors may seek search warrants for evidence collection. The defendant¡¯s counsel is permitted, during the detention hearing proceedings only, to review the case file and evidence, make copies and take photographs or video. Once prosecution is initiated, all evidence and litigation files will be submitted to the court for the judge¡¯s examination.

Restrictions on disclosure. During criminal investigations, prosecutors can issue a confidentiality protective order to the parties involved ¨C including their counsel, expert witnesses and other witnesses ¨C pursuant to article 14-1 of the TSA, requiring them to keep confidential any information they access during the investigation, with violations potentially leading to imprisonment or fines.

During the trial stage for both civil and criminal cases, according to articles 36 and 66 of the IPCAA, courts may, on petition of a party or third party, also issue confidentiality orders to the opposing party, their counsel, expert witnesses and witnesses to safeguard trade secrets. Violating such orders can result in criminal penalties.

Additionally, the court may impose restrictions or prohibitions on the opposing party¡¯s ability to review, transcribe, photograph or reproduce the relevant files if litigation files or evidence contains trade secrets or confidential business information of either party, or of a third party.

Trial procedures

Non-public trials. According to the Code of Civil Procedure, the Code of Criminal Procedure and the IPCAA, if litigation files or evidence contains trade secrets or confidential business information, the court may, on the motion of a party or a third party, or with both parties¡¯ consent, close the proceedings to the public.

Burden and standards of proof. In civil proceedings, the party making a claim must in principle prove its allegations based on the ¡°preponderance of evidence¡± standard, meaning the claim is more likely true than not. For interim remedies in trade secret cases, the petitioner only needs to explain the facts, but the proof standards vary; provisional attachment and disposition require a preponderance of probability, while preliminary injunctions necessitate a higher standard, reflecting a high likelihood of misappropriation.

In criminal proceedings, a lower standard is used to initiate prosecution, requiring only sufficient evidence of suspicion. However, for a guilty verdict, the standard rises to ¡°beyond a reasonable doubt¡±, which means that the evidence presented must be convincing to the extent that it leaves no doubt in the mind of the average person as to its truth.

Appeal. In both civil and criminal cases, parties can appeal first-instance decisions to the IP Court within 20 days of the judgment. Appeals of second-instance decisions to the Supreme Court are permitted only on the grounds that the judgment of the lower court is in contravention of the law.

Trends and conclusion

Given Taiwan¡¯s pivotal role in the global information and communication technology, and semiconductor sectors, its trade secret laws have progressively evolved to meet the demands of a rapidly advancing high-tech economy.

Notable legislative developments include the 2013 enhancement of criminal liabilities under the Trade Secrets Act, the 2019 amendments designed to strengthen protections for foreign enterprises and streamline secrecy order procedures, and the 2022 amendment to the National Security Act aimed at safeguarding ¡°national core key technologies¡±.

These developments collectively serve to underscore Taiwan¡¯s clear and sustained commitment to robust trade secret protection.

LEE AND LI, ATTORNEYS-AT-LAW
8F, No.555, Sec. 4, Zhongxiao E Rd,
Taipei 11072, Taiwan, ROC
5F, Science Park Life Hub,
No.1 Industry E 2nd Rd.
Hsinchu Science Park, Hsinchu 30075
Taiwan, ROC
Tel: +886 2 2763 8000; +886 3 579 9911
Email: attorneys@leeandli.com

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