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Taiwan Cabinet expected to review Trade Secrets Act

Publication Date : 17-10-2012


Taiwan's Executive Yuan is expected to review on October 25 proposed amendments to the Trade Secrets Act, officials at the Intellectual Property Office (IPO) said yesterday in response to complaints that the government and existing regulations are not adequate to safeguard the interests of corporations.

The inadequacy was highlighted in a recent case in which two former executives of AU Optronics Corp. had allegedly stolen technological secrets regarding advanced display panels and had given them to a competing firm in mainland China.

IPO officials said proposed revisions to the act were submitted to the Cabinet in mid-August for review.

If approved by the Cabinet and ratified by the Legislative Yuan, people convicted of industrial espionage will face penalties under criminal law with imprisonment ranging from six months to five years plus a fine of NT$500,000 to NT$50 million (US$17,000  to US$1.7 million)

Jail terms and fines can be even stiffer when trade and technological secrets are transmitted outside the country, they said.

AU Optronics (AUO) is the second-largest panel producer in Taiwan, and it has been a supplier for companies including Acer, HTC and Apple.

The company revealed that two former research executives stole key trade secrets and sold them to a competitor in China.

Economic Minister Shih Yen-shiang confirmed earlier yesterday that those convicted of industrial espionage would face tougher penalties following the case which broke Monday.

The minister said he supported a quick handling of the case by the Ministry of Justice's Investigation Bureau (MJIB), but acknowledged that the probe could face legal restrictions under existing rules.

AUO Chairman Lee Kun-yao had suggested at a seminar in the presence of President Ma Ying-jeou last year that Taiwan should follow the example of the Industrial Espionage Act in the United States to better protect corporate secrets.

Under current regulations, courts can only hand down jail sentences of up to one year on charges of revealing confidential information by electronic means.

The two suspects named by local media were Lien Shui-chih and Wang Yi-fan, who were reported to have sold key active-matrix organic light-emitting diode (Amoled) technology and other information to China Star Optoelectronics Technology Co., China's second-largest panel maker and a subsidiary of television maker TCL Group.

AUO said that it had filed a lawsuit against the two former employees with the Hsinchu District Court. Reports said the move would not help retrieve the secrets, but might serve as a warning to executives planning similar actions to steal and sell corporate secrets for money and get high-paying positions at panel producers in China.

The two suspects left AUO and joined China Star last year, according to local reports.

According to AUO, the two suspects had downloaded information regarding advanced technologies and sent them to private email accounts. The company also found an email from a China Star executive on one of its computers, reports said.
Wang now serves as the Chinese company's chief of Amoled development, while Lien was appointed deputy director of the Industrial Research Institute at TCL. Both currently enjoy exceptionally high salaries, according to local reports.

The two were reportedly given three-year contracts with US$2.5 million and NT$5 million as annual salaries.

Investigators of the MJIB detained the suspects and questioned them about the alleged theft when both men returned to Taiwan for the Mid-Autumn Festival break from mainland China last month.

Both of them denied any guilt and were released.

Restrictions against their travelling abroad have ended, meaning they can leave Taiwan.

But the Hsinchu Prosecutors Office said it could re-impose the ban if warranted by the investigation. Both men have so far cooperated with the authorities, prosecutors said.

They did not say if the two are still in Taiwan.

*US$1=29.1 Taiwan dollar


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