The Intellectual Property Court rendered the 106-Xing-Zhi-Shang-Su-42 Criminal Decision on August 30, 2018 (the “Decision”) in which it held that industrial or commercial secrets under the Criminal Code require a certain degree of confidentiality, and the owners of confidential information are required to take certain measures to protect such information so that others cannot easily learn of its contents .
The Complainant in this case asserted that the Defendant divulged company financial information that the Complainant had stored on a computer. The prosecutor decided to indict the Defendant for criminal disclosure of industrial or commercial secrets. However, the original decision acquitted the Defendant on the ground that no password or protection measures were implemented in place for such information, which means such information cannot be considered industrial or commercial secret. The prosecution thus appealed the case.
According to the Decision, the offense of divulging industrial or commercial secrets under Article 317 of the Criminal Code was formulated in 1935 and has not been amended to date, while the Trade Secrets Law, of which Article 2 specifically stipulates the elements constituting a trade secret, was formulated and promulgated on January 17, 1996. When the law was subsequently amended on January 30, 2013, the criminal liabilities were additionally stipulated under Article 13-1 through 13-4 with penalties of up to five years or one to ten years, which are more severe than the penalty for divulging industrial or commercial secrets under Article 317 of the Criminal Code. In light of the legislative process of the above provisions and the fact that the definition of “trade secrets” under the Trade Secrets Law and the definition for “industrial or commercial secrets” under Article 317 of the Criminal Code are different, the court thus held that there should be differences in the essence of the industrial or commercial secrets do not need to adopt the same high threshold standards for trade secrets under the Trade Secrets Law so as protect the rights and interests of the parties. However, in spite of the different scope of protection, some level of protective measures must still be implemented for industrial or commercial trade secrets so that others cannot easily learn about the contents of such confidential information. If it is not possible to determine if the owner of confidential information has taken any such protective measures to prevent access or disclosure to others, it is certainly difficult to conclude that the information meets the confidentiality elements.
It was therefore pointed out in this Decision that since Complainant’s information, whether stored in a public area computer or a personal computer, was never protected with a password or any other measure, the confidentiality elements are not met. Even if Defendant’s conduct of not setting a password for such information (as an employee of Complainant) was questionable, it does not change the fact that the elements for divulging industrial or commercial secrets under the Criminal Code were not satisfied, thus the prosecution’s appeal was still rejected.