10.27.2022
Amendments to the National Security Act to Protect Trade Secrets of National Core Key Technologies in Taiwan
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BY CHIA-HSIUNG LIU
The amended National Security Act as promulgated on June 8, 2022 contains 20 provisions, in which five of the seven new provisions are entirely or at least partially related to protection of trade secrets of national core key technologies in Taiwan. The amended National Security Act has not yet become effective.
Before the amendment, the National Security Act prohibits improper disclosure, delivery or transmission of an official secret (documents, drawings, images, messages, articles or electromagnetic records) to a foreign country, Mainland China, Hong Kong, Macau, foreign hostile forces, or their dispatched persons. In other words, the National Security Act did not govern the protection of trade secrets of private companies, organizations, institutions, or groups, which were protected under the Trade Secrets Act. A trade secret of national core key technologies may be categorized as a trade secret under the Trade Secrets Act, but no particular legal penalties on a convicted offender. After the amendment, the protection of a trade secret of national core key technologies will be particularly governed under the National Security Act.
After the amendment of the National Security Act, there will be four types of trade secret related illegal scenarios under either the Trade Secrets Act or the amended National Security Act. A criminal offence of the first type will be prosecuted only upon the filing of a criminal complaint.
Table 1: trade secrets related illegal scenarios in Taiwan.
Article 9, Paragraph 1, of the amended National Security Act provides that the investigation of a confidentiality protective order under Articles 14-1 to 14-3 of the Trade Secrets Act shall also apply to an offense under Article 8 of the amended National Security Act investigated by a public prosecutor. Any person who violates the investigation confidentiality protective order under the amended National Security Act shall be sentenced to a maximum of 5 years imprisonment (longer than the maximum of 3 years imprisonment provided in the Trade Secrets Act), or a short-term imprisonment; a fine of no more than NT$ 1 million may be imposed (Article 10, Paragraph 1, of the amended National Security Act).
The amended National Security Act also provides that the Intellectual Property and Commercial Court has the jurisdiction over cases involving trade secrets of national core key technologies (Article 18, Paragraph 2, of the amended National Security Act) and that the cases may be tried by a professional tribunal or a dedicated division may be designated for the trial (Article 19 of the amended National Security Act).
The effective date of the amended National Security Act has not yet been prescribed, and the standards for determining what types of trade secrets involved in national core key technologies are currently being formulated by the National Science and Technology Council in cooperation with relevant authorities. We will keep you apprised of further development.
*Patent Attorney at Tai E International Patent & Law Office
The amended National Security Act as promulgated on June 8, 2022 contains 20 provisions, in which five of the seven new provisions are entirely or at least partially related to protection of trade secrets of national core key technologies in Taiwan. The amended National Security Act has not yet become effective.
Before the amendment, the National Security Act prohibits improper disclosure, delivery or transmission of an official secret (documents, drawings, images, messages, articles or electromagnetic records) to a foreign country, Mainland China, Hong Kong, Macau, foreign hostile forces, or their dispatched persons. In other words, the National Security Act did not govern the protection of trade secrets of private companies, organizations, institutions, or groups, which were protected under the Trade Secrets Act. A trade secret of national core key technologies may be categorized as a trade secret under the Trade Secrets Act, but no particular legal penalties on a convicted offender. After the amendment, the protection of a trade secret of national core key technologies will be particularly governed under the National Security Act.
After the amendment of the National Security Act, there will be four types of trade secret related illegal scenarios under either the Trade Secrets Act or the amended National Security Act. A criminal offence of the first type will be prosecuted only upon the filing of a criminal complaint.
Table 1: trade secrets related illegal scenarios in Taiwan.
| Type | Provision(s) | Situation |
| Penalty | ||
| 1 | Article 13-1, Paragraph 1, of the Trade Secrets Act | Any person committing an act falling under any of the following circumstances for the purpose of illicit gain for himself/herself or for a third person, or inflicting a loss on the holder of a trade secret: 1. Obtaining trade secrets by way of theft, embezzlement, fraud, duress, unauthorized reproduction, or other improper methods, or using and disclosing them after the obtainment; 2. Without authorization or beyond the scope of authorization, reproducing, using or disclosing trade secrets that are known to or held by him; 3. Failing to delete, destroy or conceal trade secrets that are held by him, after the owner of the trade secrets has informed that such trade secrets should be deleted or destroyed; or 4. Obtaining, using or disclosing trade secrets with the knowledge that such trade secrets known to or held by others fall under the circumstances in the preceding three paragraphs |
| shall be sentenced to a maximum of 5 years imprisonment or short-term imprisonment and, in addition thereto, a fine between NT$ 1 million and NT$ 10 million. | ||
| 2 | Article 13-2, Paragraph 1, of the Trade Secrets Act | Any person committing a crime as prescribed in Article 13-1, Paragraph 1 of the Trade Secrets Act for the purpose of using trade secrets in a foreign country, Mainland China, Hong Kong, or Macau |
| shall be sentenced to imprisonment between 1 year and 10 years and, in addition thereto, a fine between NT$ 3 million and NT$ 50 million. | ||
| 3 | Article 3, Paragraph 2, and Article 8, Paragraph 2, of the amended National Security Act | Any person intending to engage in any of the acts under Article 3, Paragraph 1 of the National Security Act for the purpose of using trade secrets of national core key technologies in a foreign country, Mainland China, Hong Kong, or Macau |
| shall be sentenced to imprisonment between 3 years and 10 years and, in addition thereto, a fine between NT$ 5 million and NT$ 50 million. | ||
| 4 | Article 3, Paragraph 1, and Article 8, Paragraph 1, of the amended National Security Act | Any person engaging in the following acts for a foreign country, Mainland China, Hong Kong, Macau, foreign hostile forces, or various organizations, institutions, or groups established or substantially controlled by them or persons dispatched by such organizations, institutions or groups: 1. Obtaining trade secrets of national core key technologies by way of theft, embezzlement, fraud, duress, unauthorized reproduction, or other improper methods, or using and disclosing them after the obtainment; 2. Without authorization or beyond the scope of authorization, reproducing, using or disclosing trade secrets of national core key technologies that are known to or held by him; 3. Failing to delete, destroy or conceal trade secrets of national core key technologies that are held by him, after the owner of the trade secrets has informed that such trade secrets should be deleted or destroyed; or 4. Obtaining, using or disclosing trade secrets of national core key technologies with the knowledge that such trade secrets known to or held by others fall under the circumstances in the preceding three paragraphs |
| shall be sentenced to imprisonment between 5 years and 12 years and, in addition thereto, a fine between NT$ 5 million and NT$ 100 million. |
Article 9, Paragraph 1, of the amended National Security Act provides that the investigation of a confidentiality protective order under Articles 14-1 to 14-3 of the Trade Secrets Act shall also apply to an offense under Article 8 of the amended National Security Act investigated by a public prosecutor. Any person who violates the investigation confidentiality protective order under the amended National Security Act shall be sentenced to a maximum of 5 years imprisonment (longer than the maximum of 3 years imprisonment provided in the Trade Secrets Act), or a short-term imprisonment; a fine of no more than NT$ 1 million may be imposed (Article 10, Paragraph 1, of the amended National Security Act).
The amended National Security Act also provides that the Intellectual Property and Commercial Court has the jurisdiction over cases involving trade secrets of national core key technologies (Article 18, Paragraph 2, of the amended National Security Act) and that the cases may be tried by a professional tribunal or a dedicated division may be designated for the trial (Article 19 of the amended National Security Act).
The effective date of the amended National Security Act has not yet been prescribed, and the standards for determining what types of trade secrets involved in national core key technologies are currently being formulated by the National Science and Technology Council in cooperation with relevant authorities. We will keep you apprised of further development.
*Patent Attorney at Tai E International Patent & Law Office
