Guangyun Yuantai's trade secret case: How should the law judge the re-making of technical data before resignation and the mass resignation?

The AI liquid cooling market is growing rapidly, but a trade secret dispute has erupted between Guangyun and Yuantai Technology over liquid cooling technology data. The real legal core of such cases is not just about employees leaving to compete with other companies, but about what data the employees obtained, reproduced, or used before and after leaving, and whether the former company can prove that this data is protected by the Trade Secrets Act.

In March 2026, Guangyun Machinery Engineering Co., Ltd. and Yuantai Technology Co., Ltd. announced that the Shilin District Prosecutors Office had filed a public prosecution against former employees of Guangyun and Yuantai Technology, among others, regarding a trade secret dispute between the two parties.

According to news reports, prosecutors believe that the former head of Guangyun Thermal Technology Division and some team members allegedly copied the company's internal liquid cooling technology data before and after leaving the company. The data included information on liquid cooling cabinet configuration, water-cooled back door system, monitoring interface, coolant selection, and data center planning. Prosecutors also listed LINE conversations, electronic files on computers and storage devices, and subsequent product and technology usage as important evidence in the case.

However, it must be noted that a prosecutor's indictment does not equate to a court finding of guilt. Yuan Tai has also publicly stated that its technology has independent research and development and patent sources, and denied some of the media reports. Whether the information in the case constitutes Guangyun's trade secrets, and whether the defendant reproduced or used it without authorization, should still be determined by the court based on specific evidence.

This is also the most typical offense and defense in trade secret cases: what the two sides are really arguing about is often not just "whether or not they have obtained a file", but whether the file is a trade secret under the law, and whether the act of obtaining, reproducing or using it exceeds the original scope of authorization.

The company saying "this is confidential" is not enough: trade secrets must meet three requirements.

According to Article 2 of the Trade Secrets Act, trade secrets protected by law must simultaneously possess "secrecy," "economic value," and "reasonable confidentiality measures."

First, confidentiality means that the information is not something that people in the relevant industry or professional field can easily obtain. If it is just a publicly available website, product manual, publicly available patent, or technology that is generally known in the industry, it is difficult to become a trade secret simply because it is called "confidential" within the company.

Second, economic value refers to information that, because it is not publicly available, can bring actual or potential commercial benefits. For example, process parameters, product formulas, program source code, unpublished R&D results, cost data, and special customer information may have economic value if competitors obtain them and can shorten R&D time, reduce costs, or gain a competitive advantage.

Third, and this is often the key factor in determining the outcome of trade secret cases, is "reasonable confidentiality measures." Companies must genuinely protect information as a secret, rather than claiming it as confidential only after a dispute arises. For example, setting access permissions based on job duties, marking documents as confidential, managing account passwords, restricting USB or external storage devices, retaining download and access records, signing confidentiality agreements, and establishing handover and data deletion procedures upon leaving the company can all be important factors in the court's judgment.

Therefore, a trade secret lawsuit is not necessarily successful simply because the information is "important." The company must also explain which document it is, what the secret content is, why it has economic value, and what specific protective measures it has taken.

Employees have the right to view materials, so is it illegal for them to download them before leaving the company?

possible.

A crucial concept in trade secret cases is that while employees have the "right to read" information during their employment, this does not mean they can copy large amounts of data to their personal devices for their own use after leaving the company.

Section 13-1 of the Trade Secrets Act not only punishes acts of obtaining trade secrets by theft, misappropriation, fraud, etc., but also punishes acts of reproducing, using, or disclosing trade secrets without authorization or beyond the scope of authorization if a person originally knew or possessed trade secrets legally through a work relationship.

In some practical cases compiled by the Intellectual Property Office, there have been instances where employees, despite having access to company data, used external devices such as SD cards to reproduce and take away confidential information. The courts still considered this to be potentially unauthorized reproduction of trade secrets.

So the real question isn't: "I could see this file, so why couldn't I take it?"

Instead, the question is: "What is the purpose of the company authorizing you to access this information? Is it to complete your work for your current company, or does it also include allowing you to copy it to your personal devices, or even take it to another company for continued use?"

The two are completely different in law.

Why are LINE, Email, USB, and download records key to trade secret cases?

Trade secret infringements are usually not carried out publicly, so criminal investigations and civil lawsuits rely heavily on digital evidence.

Common pieces of evidence in practice include company server download records, cloud account access records, USB or external hard drive usage records, private email forwarding records, LINE or other communication software conversations, a large amount of data downloaded in a short period of time before leaving the company, documents from the former company appearing on a personal computer or equipment of the new company, and the degree of similarity between new products and existing technical data.

One of the reasons the Guangyun and Yuantai cases have attracted media attention is that news reports mentioned the prosecution's possession of LINE conversations, electronic files, and digital forensic results. If this type of evidence can be compared with the "time of resignation," "time of establishment of the new company," "time of product development," and "time of data access," it often forms a complete chain of evidence.

Conversely, the defendant may also argue that the information was originally publicly available, constitutes existing personal expertise, was obtained within the scope of authorization, or that the new company's technology originated from independent research and development, existing patents, or other legitimate sources of technology.

Therefore, trade secret cases are rarely decided by a single confidentiality agreement; rather, they are judged by a combination of legal, technical, information security, and digital forensic evidence.

If trade secrets are intended for use in China, the criminal penalties will be more severe.

This is another important legal issue in this case.

Generally, violating Article 13-1 of the Trade Secrets Act, such as illegally obtaining, reproducing, using, or disclosing trade secrets for one's own or a third party's illegal benefit, is punishable by imprisonment for up to five years or detention, and may also be subject to a fine of between NT$1 million and NT$10 million.

However, if the perpetrator intends to use the trade secret in foreign countries, mainland China, Hong Kong or Macau, Article 13-2 of the Trade Secrets Act increases the criminal liability to imprisonment for a term of not less than one year but not more than ten years, and may also impose a fine of not less than NT$3 million but not more than NT$50 million. Attempted offenses are also subject to punishment.

Therefore, once a trade secret case involves facts such as overseas companies, overseas technology transfer, overseas exhibitions, overseas customers, overseas patent layout, or overseas production, prosecutors will usually conduct further investigations to determine whether there was an intention to use the product overseas.

The news report mentioned that the case involved participation in an exhibition in Shanghai, which is why "overseas use" is an important part of the legal evaluation of the case. As for whether it ultimately meets the elements of a crime under Article 13-2, it still depends on the court's determination after investigating the evidence.

In addition to criminal liability, the company may also face civil claims.

Trade secret infringement is not limited to criminal cases.

If trade secrets are infringed, the rights holder may request the removal and prevention of infringement in accordance with the Trade Secrets Law, or may request the infringer to bear liability for damages.

In cases of intentional infringement, the court may, at the request of the victim and based on the circumstances of the infringement, determine a higher amount of compensation within the scope prescribed by law, but the maximum amount shall not exceed three times the amount of the proven damages.

In addition, if a company's representative, employee, or other personnel violate trade secrets laws in the course of business, the company itself may also face corporate fines under certain circumstances.

Therefore, for enterprises, trade secret cases may involve multiple issues such as criminal investigation, civil claims, secrecy orders, digital identification, corporate governance, and business competition.

For a company, what's truly important is to preserve evidence "before something goes wrong."

A common problem in trade secret cases is that business owners are very certain that a certain document is "of course a company secret," but when they go to court, they cannot prove that they actually treated it as a secret in their daily lives.

An NDA alone is not necessarily enough.

More importantly for businesses, it's crucial to ensure that policies align with actual operations. For example, who can access specific folders, can employees send files to their personal email addresses, are external storage devices restricted, are confidential documents classified, are devices and permissions checked upon leaving a job, and are download and login records retained in the system?

The "reasonable confidentiality measures" referred to in court practice do not require companies to be absolutely unable to disclose information, but at least they must take measures that are sufficient to demonstrate their intention to keep information confidential and restrict others from accessing it arbitrarily, based on the company's size, the nature of the information, and their actual capabilities.

This is whyTrade secret protection and information securityWe cannot wait until employees leave and data has already been leaked before we begin to process it.

If a company discovers that an employee has unusually downloaded or sent data to a private email address or copied a large number of files using a USB drive before leaving the company, or that a competitor suddenly has a highly similar product after the employee leaves the company, the first step is usually not to directly delete the account or reinstall the computer, but to first preserve all relevant digital evidence, and then assess subsequent criminal prosecution, civil preservation and damage compensation strategies.

Frequently Asked Questions

Does an employee leaving a company to work for a competitor violate trade secret laws?

No. An employee leaving a company or joining a competitor does not automatically constitute an infringement of trade secrets. What truly needs to be determined is whether they obtained, reproduced, used, or disclosed the former company's trade secrets without authorization, and whether the relevant information meets the three legal requirements for trade secrets.

Is it always illegal for an employee to take away their work files?

Not necessarily, but the risk is very high. While employees may have legitimate access to data due to their job duties, if they copy data that is only intended for company business use to their personal devices, intending to use it themselves after leaving the company, they may have exceeded the original scope of authorization.

Does having an NDA with employees necessarily prove that something is a trade secret?

Not necessarily. NDA is important evidence, but the court will still examine whether the company actually took reasonable confidentiality measures such as access control, passwords, confidentiality marking, document management, and departure procedures.

Are customer lists, quotations, or technical drawings considered trade secrets?

It cannot be generalized. It is still necessary to determine on a case-by-case basis whether the information is confidential, whether its confidentiality generates economic value, and whether the company has taken reasonable confidentiality measures. Information that is publicly available or easily accessible in the industry is generally less likely to be protected by trade secret laws.

Is it really a serious criminal offense to take a company's trade secrets to China for use?

Yes. Article 13-2 of the Trade Secrets Act stipulates heavier penalties for those who intend to use trade secrets in foreign countries, mainland China, Hong Kong, or Macau, with a sentence of imprisonment for not less than one year but not more than ten years, and may also be subject to a heavy fine.

If a company discovers that a former employee has allegedly downloaded a large amount of company data, what should be the first step?

First, evidence should be preserved, including server logs, download logs, emails, cloud access records, USB usage data, communication records, and related devices. Do not delete or reinstall data on devices before evidence preservation is complete. Then, have a lawyer and information security or digital forensics professionals assess the next steps.