February 2026
Preservative Measures for After-Resignation Business Strife Limitation and Trade Secrets Protection (Taiwan)
An after-resignation business strife limitation clause refers to an agreement between an employer and an employee under which, for the purpose of protecting the employer’s trade secrets and commercial interests, the employee agrees not to engage in similar or competing business activities for a certain period after resignation. Such clauses are particularly common in Taiwan’s technology industry, because employees often have access to key trade secrets during their employment, and if they immediately transfer to a competing enterprise after resignation, there is a risk of trade secrets infringement. The case between TSMC and its former senior vice president Wei-Jen Lo is a representative example. According to a press release of the Intellectual Property Court
[1]
, TSMC filed an application for an injunction maintaining a temporary status quo against the opposing party Wei-Jen Lo on November 25, ROC Year 114. According to relevant news reports, the application was presumably based on the fact that Wei-Jen Lo had access to a large amount of TSMC’s trade secrets during his employment, and that there was a high risk of leakage, disclosure, delivery, or transfer of TSMC’s trade secrets, and thus requested the court, during the agreed period of after-resignation business strife limitation between the parties, to prohibit Wei-Jen Lo from taking up employment with competing enterprises (such as Intel).
[2]
I. Overview of the Requirements for Applying for an Injunction and the Standards Adopted in Taiwan Court Practice
Where an employer and an employee have entered into an after-resignation business strife limitation agreement, and the employee violates such an agreement after resignation, the employer may, of course, initiate an action on the merits through judicial proceedings. However, if the employer must wait until a final and binding judgment on the merits before requiring the employee to cease the competitive conduct, it is often practically impossible to effectively prevent the leakage of trade secrets. In view of this risk, the employer may, pursuant to the relevant provisions of the Code of Civil Procedure and the Intellectual Property Case Adjudication Act, apply to the court for an injunction maintaining a temporary status quo prior to the conclusion of the action on the merits, the formation of a settlement, or the withdrawal of the application, so as to obtain an advance ruling prohibiting specific competitive conduct and thereby ensure that the purpose of trade secrets protection is not rendered futile.
With respect to the requirements for an injunction maintaining a temporary status quo, pursuant to Article 538, paragraph 1 of the Code of Civil Procedure, Article 52, paragraphs 1 and 2 of the Intellectual Property Case Adjudication Act, and Article 65, paragraph 1 of the Intellectual Property Case Adjudication Rules, such requirements may be summarized as follows:
1. The existence of a disputed legal relation [3] (to be preliminarily shown by the applicant);
2. The existence of facts demonstrating the necessity of preservation (to be preliminarily shown by
(1) preventing the occurrence of material harm; or
(2) avoiding imminent danger; or
(3) other similar circumstances.
When reviewing an application for an injunction maintaining a temporary status quo, the court shall conduct a balancing of interests with respect to the necessity of preservation, taking into account factors such as the likelihood of success on the merits and the impact of harm on both parties. In practice, when conducting such balancing (weighing), courts typically find that the harm suffered by the opposing party as a result of being prohibited from taking up employment with a competing company (i.e., the loss of salary during the period of after-resignation business strife limitation), as compared with the harm that the applicant may suffer, such as the leakage of trade secrets or the loss of competitive market advantage, is relatively minor and compensable by monetary damages. Moreover, the opposing party is, in most cases, still able to receive non-compete compensation, and the hardship faced is not unbearable. By contrast, if the applicant is not granted the injunction, the applicant may suffer material harm that is difficult to remedy, and courts therefore tend to find that there is indeed a necessity to apply for an injunction maintaining a temporary status quo (see, e.g., Supreme Court Ruling No. 101 Tai-Kang 206, Intellectual Property Court Ruling No. 104 Min-Zhan 16, Taiwan High Court Ruling No. 112 Lao-Kang 70, and Taiwan High Court Ruling No. 111 Lao-Kang 23).
According to prevailing practice, where the applicant can preliminarily show that an after-resignation business strife limitation agreement exists between the applicant and the opposing party, that the trade secrets satisfy the statutory requirements, and that the departing employee had knowledge of, access to, or obtained such trade secrets during employment and took up employment with a competing company after resignation, even if the disputed after-resignation business strife limitation clause may potentially be subject to grounds of invalidity, the court need only conduct a prima facie review; so long as it is not manifestly without any prospect of success, the requirement regarding the likelihood of success for an injunction maintaining a temporary status quo is deemed satisfied (see, e.g., Supreme Court Ruling No. 101 Tai-Kang 206, Intellectual Property Court Ruling No. 104 Min-Zhan 16, Taiwan High Court Ruling No. 109 Lao-Kang 104, and Taiwan High Court Taichung Branch Court Ruling No. 109 Kang 59). In other words, under current practice, the standards adopted by courts in balancing the interests of both parties tend to favor the applicant. The evidence submitted by the applicant need only be sufficient to form a preliminary conviction in the court’s mind that the applicant’s factual assertions are generally credible, and the applicant will then be deemed to have fulfilled the burden of preliminary showing (Intellectual Property Court Ruling No. 107 Min-Zhan-Kang 13).
It should be noted that although an injunction maintaining a temporary status quo applies mutatis mutandis Article 536 of the Code of Civil Procedure, which allows the debtor to provide counter-security (i.e., to be exempted from performance of, or to revoke, a provisional measure upon provision of security), in this type of injunction maintaining a temporary status quo, courts in practice generally do not permit counter-security. The reason is that allowing the opposing party to provide counter-security would likely make it difficult to achieve the purpose of preventing the applicant from suffering material harm.
II. Enforcement of an Injunction Maintaining a Temporary Status Quo
In cases where an employer and an employee have entered into an after-resignation business strife limitation agreement, and the employee violates such an agreement after resignation, the employer may, with respect to the disputed legal relation, apply for an injunction maintaining a temporary status quo after providing a preliminary showing of the existence of such a legal relation and the necessity of maintaining the temporary status quo, in order to preserve the interests of the enterprise. If the court grants the application for an injunction maintaining a temporary status quo, the employer may, after receipt of the ruling granting such injunction, use the ruling as the basis for enforcement and apply to the enforcement court for compulsory enforcement within 30 days. [4]
However, taking the case between TSMC and its former senior vice president Wei-Jen Lo as an example, if he has in fact taken up employment with a competing enterprise in California, United States (such as Intel), even if TSMC successfully obtains a ruling granting an injunction maintaining a temporary status quo from a Taiwan court, how such a ruling may be practically enforced within the territory of California becomes a difficult issue in practice. In particular, under the legal regime of California, after-resignation business strife limitation is in principle prohibited; where an employer requires an employee to execute such a clause, the agreement is in principle invalid [5] , and regardless of where or when such an agreement was executed, it may not be enforced [6] . Under such circumstances, the injunction issued by a Taiwan court would likely face difficulties in being recognized and enforced in California, posing a significant challenge to the practical effectiveness of preservative procedures. Nevertheless, such a ruling still has deterrent and declaratory effects, and the employer may, in conjunction with other remedies (such as filing a damages action in Taiwan, or applying for preservation or enforcement against the departing employee’s assets in Taiwan), respond to the restrictions imposed by different jurisdictions on after-resignation business strife limitation clauses and ensure that trade secrets receive substantive protection.
[1] Press Release on the Case Assignment Result of the Application for an Injunction Maintaining a Temporary Status Quo in Intellectual Property and Commercial Court Case No. 114 Min-Zhan 19, Intellectual Property and Commercial Court, November 26, 2025, available at: https://ipc.judicial.gov.tw/tw/cp-663-2773504-c1b64-091.html (last accessed January 23, 2026).
[2] TSMC Formally Files Lawsuit Against Wei-Jen Lo Over Alleged Leakage of Trade Secrets to Intel, Central News Agency, available at: https://www.cna.com.tw/news/afe/202511250289.aspx (last accessed January 23, 2026).
[3] The so-called disputed legal relation is not limited to a legal relation that is already pending before a court; rather, any non-monetary claim that is continuous in nature and suitable to be the subject matter of a civil action, where a dispute arises between the parties or where such a relation is infringed, shall fall within this scope (see the holding of Supreme Court Ruling No. 108 Tai-Kang 213).
[4] The conclusion reached in Item 15 of the legal issues discussed at the 109th year legal seminar on civil enforcement matters of the High Court holds that, although Article 132, paragraph 3 of the Compulsory Enforcement Act only provides that where a creditor has received a ruling on provisional attachment or provisional injunction and more than 30 days have elapsed, the creditor may not apply for enforcement, an injunction maintaining a temporary status quo and rulings on provisional attachment or provisional injunction are all governed by the preservative procedures set forth in Part VII of the Code of Civil Procedure. Therefore, the enforcement of an injunction maintaining a temporary status quo is likewise subject, by application mutatis mutandis, to the 30-day limitation under Article 132, paragraph 3. See: https://tph.judicial.gov.tw/tw/lp-9034-051.html (last accessed January 23, 2026).
[5] Pursuant to Article 16600(a) of the California Business and Professions Code, “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” In addition, pursuant to Article 16600.1(a) of the same Code, “It shall be unlawful to include a noncompete clause in an employment contract, or to require an employee to enter a noncompete agreement, that does not satisfy an exception in this chapter.”
[6] Pursuant to Article 16600.5(a) of the California Business and Professions Code, “Any contract that is void under this chapter is unenforceable regardless of where and when the contract was signed.” In addition, Article 16600.5(b) of the same Code provides that “An employer or former employer shall not attempt to enforce a contract that is void under this chapter regardless of whether the contract was signed and the employment was maintained outside of California.”
I. Overview of the Requirements for Applying for an Injunction and the Standards Adopted in Taiwan Court Practice
Where an employer and an employee have entered into an after-resignation business strife limitation agreement, and the employee violates such an agreement after resignation, the employer may, of course, initiate an action on the merits through judicial proceedings. However, if the employer must wait until a final and binding judgment on the merits before requiring the employee to cease the competitive conduct, it is often practically impossible to effectively prevent the leakage of trade secrets. In view of this risk, the employer may, pursuant to the relevant provisions of the Code of Civil Procedure and the Intellectual Property Case Adjudication Act, apply to the court for an injunction maintaining a temporary status quo prior to the conclusion of the action on the merits, the formation of a settlement, or the withdrawal of the application, so as to obtain an advance ruling prohibiting specific competitive conduct and thereby ensure that the purpose of trade secrets protection is not rendered futile.
With respect to the requirements for an injunction maintaining a temporary status quo, pursuant to Article 538, paragraph 1 of the Code of Civil Procedure, Article 52, paragraphs 1 and 2 of the Intellectual Property Case Adjudication Act, and Article 65, paragraph 1 of the Intellectual Property Case Adjudication Rules, such requirements may be summarized as follows:
1. The existence of a disputed legal relation [3] (to be preliminarily shown by the applicant);
2. The existence of facts demonstrating the necessity of preservation (to be preliminarily shown by
(1) preventing the occurrence of material harm; or
(2) avoiding imminent danger; or
(3) other similar circumstances.
When reviewing an application for an injunction maintaining a temporary status quo, the court shall conduct a balancing of interests with respect to the necessity of preservation, taking into account factors such as the likelihood of success on the merits and the impact of harm on both parties. In practice, when conducting such balancing (weighing), courts typically find that the harm suffered by the opposing party as a result of being prohibited from taking up employment with a competing company (i.e., the loss of salary during the period of after-resignation business strife limitation), as compared with the harm that the applicant may suffer, such as the leakage of trade secrets or the loss of competitive market advantage, is relatively minor and compensable by monetary damages. Moreover, the opposing party is, in most cases, still able to receive non-compete compensation, and the hardship faced is not unbearable. By contrast, if the applicant is not granted the injunction, the applicant may suffer material harm that is difficult to remedy, and courts therefore tend to find that there is indeed a necessity to apply for an injunction maintaining a temporary status quo (see, e.g., Supreme Court Ruling No. 101 Tai-Kang 206, Intellectual Property Court Ruling No. 104 Min-Zhan 16, Taiwan High Court Ruling No. 112 Lao-Kang 70, and Taiwan High Court Ruling No. 111 Lao-Kang 23).
According to prevailing practice, where the applicant can preliminarily show that an after-resignation business strife limitation agreement exists between the applicant and the opposing party, that the trade secrets satisfy the statutory requirements, and that the departing employee had knowledge of, access to, or obtained such trade secrets during employment and took up employment with a competing company after resignation, even if the disputed after-resignation business strife limitation clause may potentially be subject to grounds of invalidity, the court need only conduct a prima facie review; so long as it is not manifestly without any prospect of success, the requirement regarding the likelihood of success for an injunction maintaining a temporary status quo is deemed satisfied (see, e.g., Supreme Court Ruling No. 101 Tai-Kang 206, Intellectual Property Court Ruling No. 104 Min-Zhan 16, Taiwan High Court Ruling No. 109 Lao-Kang 104, and Taiwan High Court Taichung Branch Court Ruling No. 109 Kang 59). In other words, under current practice, the standards adopted by courts in balancing the interests of both parties tend to favor the applicant. The evidence submitted by the applicant need only be sufficient to form a preliminary conviction in the court’s mind that the applicant’s factual assertions are generally credible, and the applicant will then be deemed to have fulfilled the burden of preliminary showing (Intellectual Property Court Ruling No. 107 Min-Zhan-Kang 13).
It should be noted that although an injunction maintaining a temporary status quo applies mutatis mutandis Article 536 of the Code of Civil Procedure, which allows the debtor to provide counter-security (i.e., to be exempted from performance of, or to revoke, a provisional measure upon provision of security), in this type of injunction maintaining a temporary status quo, courts in practice generally do not permit counter-security. The reason is that allowing the opposing party to provide counter-security would likely make it difficult to achieve the purpose of preventing the applicant from suffering material harm.
II. Enforcement of an Injunction Maintaining a Temporary Status Quo
In cases where an employer and an employee have entered into an after-resignation business strife limitation agreement, and the employee violates such an agreement after resignation, the employer may, with respect to the disputed legal relation, apply for an injunction maintaining a temporary status quo after providing a preliminary showing of the existence of such a legal relation and the necessity of maintaining the temporary status quo, in order to preserve the interests of the enterprise. If the court grants the application for an injunction maintaining a temporary status quo, the employer may, after receipt of the ruling granting such injunction, use the ruling as the basis for enforcement and apply to the enforcement court for compulsory enforcement within 30 days. [4]
However, taking the case between TSMC and its former senior vice president Wei-Jen Lo as an example, if he has in fact taken up employment with a competing enterprise in California, United States (such as Intel), even if TSMC successfully obtains a ruling granting an injunction maintaining a temporary status quo from a Taiwan court, how such a ruling may be practically enforced within the territory of California becomes a difficult issue in practice. In particular, under the legal regime of California, after-resignation business strife limitation is in principle prohibited; where an employer requires an employee to execute such a clause, the agreement is in principle invalid [5] , and regardless of where or when such an agreement was executed, it may not be enforced [6] . Under such circumstances, the injunction issued by a Taiwan court would likely face difficulties in being recognized and enforced in California, posing a significant challenge to the practical effectiveness of preservative procedures. Nevertheless, such a ruling still has deterrent and declaratory effects, and the employer may, in conjunction with other remedies (such as filing a damages action in Taiwan, or applying for preservation or enforcement against the departing employee’s assets in Taiwan), respond to the restrictions imposed by different jurisdictions on after-resignation business strife limitation clauses and ensure that trade secrets receive substantive protection.
[1] Press Release on the Case Assignment Result of the Application for an Injunction Maintaining a Temporary Status Quo in Intellectual Property and Commercial Court Case No. 114 Min-Zhan 19, Intellectual Property and Commercial Court, November 26, 2025, available at: https://ipc.judicial.gov.tw/tw/cp-663-2773504-c1b64-091.html (last accessed January 23, 2026).
[2] TSMC Formally Files Lawsuit Against Wei-Jen Lo Over Alleged Leakage of Trade Secrets to Intel, Central News Agency, available at: https://www.cna.com.tw/news/afe/202511250289.aspx (last accessed January 23, 2026).
[3] The so-called disputed legal relation is not limited to a legal relation that is already pending before a court; rather, any non-monetary claim that is continuous in nature and suitable to be the subject matter of a civil action, where a dispute arises between the parties or where such a relation is infringed, shall fall within this scope (see the holding of Supreme Court Ruling No. 108 Tai-Kang 213).
[4] The conclusion reached in Item 15 of the legal issues discussed at the 109th year legal seminar on civil enforcement matters of the High Court holds that, although Article 132, paragraph 3 of the Compulsory Enforcement Act only provides that where a creditor has received a ruling on provisional attachment or provisional injunction and more than 30 days have elapsed, the creditor may not apply for enforcement, an injunction maintaining a temporary status quo and rulings on provisional attachment or provisional injunction are all governed by the preservative procedures set forth in Part VII of the Code of Civil Procedure. Therefore, the enforcement of an injunction maintaining a temporary status quo is likewise subject, by application mutatis mutandis, to the 30-day limitation under Article 132, paragraph 3. See: https://tph.judicial.gov.tw/tw/lp-9034-051.html (last accessed January 23, 2026).
[5] Pursuant to Article 16600(a) of the California Business and Professions Code, “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” In addition, pursuant to Article 16600.1(a) of the same Code, “It shall be unlawful to include a noncompete clause in an employment contract, or to require an employee to enter a noncompete agreement, that does not satisfy an exception in this chapter.”
[6] Pursuant to Article 16600.5(a) of the California Business and Professions Code, “Any contract that is void under this chapter is unenforceable regardless of where and when the contract was signed.” In addition, Article 16600.5(b) of the same Code provides that “An employer or former employer shall not attempt to enforce a contract that is void under this chapter regardless of whether the contract was signed and the employment was maintained outside of California.”
