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Trade Secrets Management In Taiwan

By Chia-Yun Lu and Jeffrey A. Pade
August 01, 2023

A company's ability to innovate, exploit, and maintain proprietary trade secrets impacts internal operations and growth, as well as, more crucially, its ability to compete in the marketplace. Recognizing the value of trade secrets, many countries have successively enacted and amended laws to strengthen the protection of corporate trade secrets. In the case of Taiwan, its Trade Secrets Act became effective in 1996 (see, Trade Secrets Act (Taiwan) (promulgated and effective on Jan. 17, 1996, last amended on Jan. 15, 2020)) and was largely modeled after the U.S. Uniform Trade Secrets Act (see, UNIF. TRADE SECRETS ACT (last amended 1985), 14 U.L.A. 1 (2021). As such, it only provided civil liability for trade secrets misappropriation. Compare Taiwan Trade Secrets Act (last amended 2020), with Uniform Trade Secrets Act (last amended 1985) (both incorporating using similar definitions for actionable trade secrets misappropriation, including for "trade secret" and "improper means).

Taiwan later revised the Taiwan Trade Secrets Act in 2013 to criminalize trade secrets theft, which Taiwanese companies recognized as a significant milestone in deterring such theft. Thus, Taiwan's passage of both civil and criminal trade secrets liability created greater awareness and recognition of trade secrets as valuable corporate assets. But Taiwanese companies needed guidance on how to maintain and manage this new type of intellectual property asset as, under Taiwan law (like that in the U.S.), corporations that own trade secrets bear the burden of maintaining their secrecy. Trade secrets management is still an unfamiliar area for many companies across Asia.

The Science & Technology Law Institute (the Institute) compiled the "2015 Intellectual Property Management Report of Taiwan-listed Companies," a study in which it concluded that the biggest intellectual property risk faced by Taiwanese companies is leakage of trade secrets (47.12%). See, The Institute for Information Industry, the Science & Technology Law Institute, "Taiwan's first trade secrets management standard to assist companies in reviewing management and effective implementation" (April 6, 2023). Comprehensive analysis also revealed that intellectual property managers regard trade secrets protection as their most challenging issue, particularly the inability to identify and protect corporate trade secrets. Id.

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