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September 24, 2017

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Cabinet expected to consider changes to Trade Secrets Act

The China Post news staff--The Executive Yuan is expected to review on Oct. 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.

Stiffer Penalties

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.

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