Why are business secrets important to a business? What is the importance of trade secrets and what are the measures to protect them?

According to Article 2 of the Trade Secrets Law: “Trade secrets as used in this Law refer to methods, technologies, processes, formulas, programs, designs or other information that can be used in production, sales or operations and meet the following requirements: 1. . It is not known to those generally involved in this type of information. 2. It has actual or potential economic value because of its confidentiality. 3. The owner has taken reasonable confidentiality measures." Therefore, business secrets must have " Confidentiality", "economic value" and the owner "taking reasonable confidentiality measures" are generally known as the "three elements of business secrets".

Business secrets are one of the most important assets of an enterprise in its commercial activities and have an important impact on the competitiveness and long-term development of the enterprise. In Taiwan, the protection of business secrets is an important issue of legal concern. In order to protect the company's business secrets, the following three elements need to be paid attention to:
1. Not known to ordinary persons involved in this type of information (confidentiality): The first requirement for a business secret is its confidentiality. This means that the information cannot be public and generally known, but is information that is known only to specific people or specific groups. These specific persons may be employees, partners or other entities within the company who are subject to a confidentiality agreement. It is crucial for businesses to ensure that internal personnel maintain appropriate confidentiality of business secrets.
2. Those that have actual or potential economic value because of their confidentiality (economic value): The second requirement for a business secret is that it has economic value. This means that the information has actual or potential financial benefit to the business. For example, a company may have a unique manufacturing method, new technology developed, market data or customer list, etc. If this information is leaked or obtained by competitors, it may result in loss of profits or weakening of the company's competitive advantage. Therefore, the economic value of a trade secret is an incentive to ensure its protection.
3. The owner has taken reasonable confidentiality measures (reasonable confidentiality measures): The third element of business secrets is that the owner has taken reasonable confidentiality measures. This means that enterprises must take a series of reasonable measures to ensure (1) the confidentiality and security of business secrets. These measures may include:
(2) Sign confidentiality agreements with employees to clearly stipulate confidentiality responsibilities and obligations for business secrets;
(3) Implement access control and information security systems within the enterprise to restrict employees to only access the information required for their work;
(4) Mark confidential documents or information with confidentiality labels to remind employees of the importance of keeping them confidential;
(5) Conduct regular employee training to improve employees’ awareness and emphasis on confidentiality measures;
(6) Monitor and track access to and use of business secrets, and promptly discover potential security risks.
(7) Overall, the protection of business secrets is crucial to the long-term development of an enterprise. In a highly competitive business environment, only by ensuring the confidentiality and economic value of business secrets and taking reasonable confidentiality measures can companies maintain competitive advantages and achieve long-term business success. For enterprises in Taiwan, establishing a complete business secret protection system and strengthening employees' awareness of confidentiality are important directions for business secret protection. At the same time, legal institutions should also continue to improve relevant laws and regulations, provide better protection mechanisms, and promote corporate innovation and competitiveness.

Most recent interpretations of "reasonable confidentiality measures" are as follows: "The owner of a trade secret has made reasonable efforts to prevent others from easily obtaining, using or disclosing the trade secret, that is,It is sufficient that the owner of a business secret has a subjective intention to protect it and has objectively taken measures to keep it confidential, but it is not necessary for the person to keep the secret confidential to the extent that "nothing is revealed". In other words, if the owner of a business secret can achieve the purpose of keeping it confidential by using methods or techniques that are generally possible in society, based on the nature of his or her human and financial resources and business information, and in a manner that is not easily accessible to anyone, then it is deemed to be "conforming" Reasonable confidentiality measures”(Intellectual Property Court Criminal Judgment No. 11 of the 105th Criminal Appeal, Criminal Judgment No. 14 of the Criminal Appeal of 107, Criminal Judgment No. 24 of the Criminal Appeal of 2010, Supreme Court Criminal Appeal No. 1608 of 108 No. Criminal Judgment Reference)

It should be noted that some of the above practical insights also emphasize that although the confidentiality measures taken by everyone do not need to be "watertight", they stillMust be "valid"Only in this way can the confidentiality of its information be maintained, andEmphasizing that the signing of a confidentiality agreement should not be used as the only criterion for determining "reasonable confidentiality measures", and attempts to outline the outline of reasonable confidentiality measures with examples, it is also worth referring to: "…For example: control those who have access to the business secret, mark documents with "confidential" or "restricted reading", lock the information on the business secret, set a password, and take security measures (such as restricting access to visitors) (stored in a confidential place), etc., and whether reasonable confidentiality measures have been taken, it is not necessary to sign a confidentiality agreement. If the owner of the business secret has objectively performed certain behaviors to make people understand that he has used the information as a business It is sufficient to protect the confidentiality of the information and control the information in a way that makes it difficult to be accessed at will. On the contrary, if a confidentiality agreement is signed, anyone can easily access the information. Even if a confidentiality agreement is signed, it will be difficult. The owner of the trade secret has taken reasonable measures to keep it confidential” (Refer to the Criminal Judgment No. 24 of the Intellectual Property Court in 107 Xingzhi Appeal).

Further reading:What should I do if an employee takes away company confidential information? Relevant provisions of the Trade Secrets Act.

Further reading:What should I do if a trademark infringement occurs? Legal measures that can be taken.

Further reading:What is patent litigation? What is the process of patent litigation?

The lawyers of our firm have focused on the fields of trade secret protection and information security for many years. They have represented many companies in many trade secret litigation cases, and have assisted many companies in reviewing information security levels and building information security systems. They have rich practical experience. , and work closely with information security consultants to provide the highest quality legal services based on rich experience.

 

Fidelity Law Firm – Business Secrets Specialist Lawyers
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