What are business secrets? Three major legal requirements for business secrets.

Three major legal requirements for business secrets

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".

"Confidentiality" among the three requirements for business secrets generally refers to the state in which information that can be used for production, sales or operations is "not known to those generally involved in such information." Practical opinions believe that the "secret nature" of business secrets belongs to the "relative concept of secrecy", and the number of people who know the secret is not limited to one person.Anyone with knowledge can determine the detailed content and scope of a certain piece of information, which has a certain degree of closure.,andThe owner of the secret treats the information as a secret both subjectively and objectively, which is not known to the general public, nor is it known to people in the relevant professional field (refer to the Supreme Court’s 107 Taizi Civil Judgment No. 2950); in addition, there are also practical opinions that the internal business secrets of an enterprise are , depending on the type of information involved, can be roughly divided into "commercial business secrets" used in operations and sales (including customer lists, product selling prices, transaction base prices, cost analysis) and "technical business secrets" related to production and manufacturing. ” (such as methods, technologies, processes, formulas, etc.), because the nature of the two is different, there should be different conditions and requirements to determine whether a certain information is confidential, andThe confidentiality of commercial information does not necessarily require that other peers or those generally involved in such information cannot obtain it or are completely unaware of it. If such information requires considerable investment of manpower, financial resources, and time, and has been screened, analyzed, and Organization can enable an enterprise to gain a competitive advantage in business operations, and can also be considered to have met the requirements of confidentiality.. (Refer to the Civil Judgment No. 52 of the Taiwan High Court in 102 Years of Heavy Labor).

The "economic value" among the three requirements for business secrets generally refers to the information obtained through the investment of time, labor, and cost. Its use does not need to be dependent on other information and exists independently.In addition to bringing tangible monetary income, it also includes economic benefits or competitive advantages such as market share, R&D capabilities, and leading time in the industry.(Reference to Supreme Court Civil Judgment No. 2950, 107 Taiwan), taking the question of whether a corporate competitor’s “offer price” has economic value as an example, the Supreme Court held that: “…ifAny quotation that is based on a competitor's product transaction price information (quotation) and is a lower amount in order to gain the opportunity to contract shall be deemed as violating the legal purpose of maintaining industrial ethics or competition order as stipulated in Article 1 of the same Act. Commodity transaction price information has economic value, to reconcile social and public interests. ” (Refer to the Civil Judgment No. 441 of the Supreme Court of the People’s Republic of China in 106)

The "reasonable confidentiality measures" among the three requirements for business secrets generally means that the owner of the information must take reasonable confidentiality measures to let third parties know that the owner intends to protect the information as secret. However, because of the requirements The room for interpretation is very wide, so have "reasonable confidentiality measures" been taken? It often becomes the focus of attack and defense for both parties in business secret litigation cases. Practical insights pointed out early on: “The so-called ‘reasonable confidentiality measures’There are no certain requirements, but should be considered on a case-by-case basis and judged based on general objective social experience. It is sufficient to make reasonable efforts based on the actual situation to enable others to objectively know the secret.. ” (Refer to the Civil Judgment No. 294 of the High Court in 2006). Subsequent practical opinions also tried to explain this requirement more specifically: “Article 2, Paragraph 3 of the Trade Secrets Act stipulates that “the owner has taken reasonable measures”. Confidentiality Measures" shall refer toThe owner shall classify and classify the intelligence information not known to the public according to business needs according to his or her human and financial resources, and according to the methods or techniques commonly available in society, and make it known to those with different levels of authorized positions.; This is particularly common in the protection of computer information, where every user has control measures such as authorized accounts and passwords. ” (Refer to the Civil Judgment No. 235 of the Supreme Court of the People’s Republic of China in 102)

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.

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