The Legislative Yuan Passes the Trade Secrets Act that Introduces a Confidentiality order for Invest

On December 31, 2019, Taiwan’s Legislative Yuan passed the partial amendment to the Trade Secrets Act. This amendment introduces a “confidentiality order for investigation”system to strengthen protection of trade secrets during investigation proceedings. A person who violates a confidentiality order shall be liable to imprisonment for a maximum of 3 years. The new law will prevent trade secret leak during investigation, increase corporations’ willingness to file a lawsuit, and enable prosecutors to effectively and quickly conclude their investigations. This amendment also increases protection of foreigners’ trade secrets, so as to attract foreign investment and boost business development. For example, an unrecognized foreign juristic person may file a complaint, initiate a private prosecution, or institute a civil lawsuit.

Below are key points of the “confidentiality order for investigation” system:

1. A prosecutor may, if she/he deems it necessary, issue a confidentiality order ex officio during the investigation.

2. A person subject to a confidentiality order shall not use the investigation information for purposes other than the investigation, or disclose such information to any person not subject to a confidentiality order.

3. A confidentiality order shall be issued in writing or verbally, and a trade secret owner shall be afforded an opportunity to make observations. Procedures to cancel or change a confidentiality order, and the relation between a confidentiality order and a court order to preserve confidentiality are also stipulated.

4. A person violating a confidentiality order shall be liable to imprisonment for a period not exceeding three years, and/or a fine not exceeding NT$1 million.