August 2017
Since evidence collection is often difficult for the infringed party with respect to trade secret infringement, the extent of substantiation by the claimant should be reduced on one hand, while the obligation of the respondent to provide a specific answer for clarification should be imposed on the other hand(Taiwan)
2017.01.04
Sean Liu
The Supreme Court rendered the 106-Tai-Shang-55 Civil Decision of January 4, 2017 (hereinafter, the "Decision"), holding that since evidence collection is often difficult for the party with respect to trade secret infringement, the extent of substantiation by the claimant should be reduced on one hand, while the obligation of the respondent to provide a specific answer for clarification should be imposed on the other hand.
According to the facts underlying this Decision, the Appellees were hired by the Appellant as a senior engineer and an advanced engineer who were in charge of developing handset products and possessed trade secrets relating to relevant product technologies and executed an employee's agreement on confidentiality obligation and consent to the transfer of intellectual property rights (hereinafter, the "Agreement at Issue"). After the Appellees terminated his employment, the Appellant found that they had sent its confidential business files (hereinafter, the "Files at Issue") to their email accounts via email (hereinafter, the "Emails at Issue") during July through November and during August of the same year, resulting in the leakage of its trade secrets concerning important technologies as developed and infringement of its intellectual property rights and interests. Therefore, the Appellant could assert a penalty equivalent to 50 times the average salary of each Appellee six months before the termination of their employment pursuant to the Agreement at Issue and obtain a decision that required the trade secrets at issue to be deleted.
According to the Decision, in a civil case involving trade secret infringement, one party typically faces great difficulties in evidence collection. If the other party cannot be compelled to produce evidence to the court and the party that claims alleged trade secret infringement is required to assume all burden of proof for the facts of infringement and the scope of damage, it will be difficult for the victims to receive their due remedies. Therefore, the extent of substantiation by the claimant should be reduced on the one hand, while the obligation to provide a specific answer for clarification should be imposed on the respondent.
According to the Decision, the Appellees had extensively emailed the Files at Issue to their external email accounts before they terminated their employment. In the investigation report produced by the Appellant, six Files at Issue were recovered with the remaining 12 unrecoverable. This was a fact affirmed by the original trial court. In that case, why did they still have to send the emails externally after they had tendered their resignation? If they had done so as part of their overtime work, they should have sent the results back to the company for such behavior to make sense. If it is determined that the Appellant has fulfilled its duty to provide explanation while the Appellees still deny, the Appellees should certainly be asked to decrypt their files and specify the circumstances of their overtime work in handling the files in order to fulfill their obligation to provide a specific answer. The original trial court was objectionable for its failure to explore this matter in depth before concluding, on the ground that the Appellant had failed to assume the burden of proof, that the Files at Issue were not trade secrets and were used for overtime work.
In addition, it was further pointed out in this Decision that whether the Appellees deleted the Files at Issue after they were emailed externally was a positive fact whose burden of proof should be assumed by the Appellees. Since the original trial court rashly concluded the Appellees' defense that the Files at Issue no longer existed was acceptable with no evidence produced by the Appellee to that effect, the original decision was reversed and remanded.
Sean Liu
The Supreme Court rendered the 106-Tai-Shang-55 Civil Decision of January 4, 2017 (hereinafter, the "Decision"), holding that since evidence collection is often difficult for the party with respect to trade secret infringement, the extent of substantiation by the claimant should be reduced on one hand, while the obligation of the respondent to provide a specific answer for clarification should be imposed on the other hand.
According to the facts underlying this Decision, the Appellees were hired by the Appellant as a senior engineer and an advanced engineer who were in charge of developing handset products and possessed trade secrets relating to relevant product technologies and executed an employee's agreement on confidentiality obligation and consent to the transfer of intellectual property rights (hereinafter, the "Agreement at Issue"). After the Appellees terminated his employment, the Appellant found that they had sent its confidential business files (hereinafter, the "Files at Issue") to their email accounts via email (hereinafter, the "Emails at Issue") during July through November and during August of the same year, resulting in the leakage of its trade secrets concerning important technologies as developed and infringement of its intellectual property rights and interests. Therefore, the Appellant could assert a penalty equivalent to 50 times the average salary of each Appellee six months before the termination of their employment pursuant to the Agreement at Issue and obtain a decision that required the trade secrets at issue to be deleted.
According to the Decision, in a civil case involving trade secret infringement, one party typically faces great difficulties in evidence collection. If the other party cannot be compelled to produce evidence to the court and the party that claims alleged trade secret infringement is required to assume all burden of proof for the facts of infringement and the scope of damage, it will be difficult for the victims to receive their due remedies. Therefore, the extent of substantiation by the claimant should be reduced on the one hand, while the obligation to provide a specific answer for clarification should be imposed on the respondent.
According to the Decision, the Appellees had extensively emailed the Files at Issue to their external email accounts before they terminated their employment. In the investigation report produced by the Appellant, six Files at Issue were recovered with the remaining 12 unrecoverable. This was a fact affirmed by the original trial court. In that case, why did they still have to send the emails externally after they had tendered their resignation? If they had done so as part of their overtime work, they should have sent the results back to the company for such behavior to make sense. If it is determined that the Appellant has fulfilled its duty to provide explanation while the Appellees still deny, the Appellees should certainly be asked to decrypt their files and specify the circumstances of their overtime work in handling the files in order to fulfill their obligation to provide a specific answer. The original trial court was objectionable for its failure to explore this matter in depth before concluding, on the ground that the Appellant had failed to assume the burden of proof, that the Files at Issue were not trade secrets and were used for overtime work.
In addition, it was further pointed out in this Decision that whether the Appellees deleted the Files at Issue after they were emailed externally was a positive fact whose burden of proof should be assumed by the Appellees. Since the original trial court rashly concluded the Appellees' defense that the Files at Issue no longer existed was acceptable with no evidence produced by the Appellee to that effect, the original decision was reversed and remanded.
