Posting Tested Cellphone Photos on Facebook Held Violation of Secrecy, Engineer is sentenced to 6-month imprisonment and ordered to pay TWD2,500,000 in damages.

Samsung Electronics Taiwan Co., Ltd (“Samsung Taiwan”) entrusted the Hsinchu lab of Sporton International Inc. (“Sporton”) in 2012 to conduct the testing of the prototype of the Samsung Galaxy S III cell phone, which model was not yet launched on the market then.  An engineer named Hong from Sporton's Hsinchu lab had some photos of the tested prototye posted on his Facebook page.  This infuriated Samsung Taiwan.  Sporton then sued Hong and Hong was sentenced to six months in prison for violating secrecy and ordered to pay Sporton TWD2.5 million in damages.  [See Taiwan Hsinchu District Court criminal judgment of case 102-Shen-Zhi-Yi-Zi No. 2 of 25 March 2013 / Taiwan Hsinchu District Court civil judgment of case 101- Lao-Su-Zi No. 24 of 12 November 2012.]

According to the judgment, Hong, formerly working at Sporton’s Hsinchu lab, was responsible for testing the yet-to-be-released Galaxy S III prototype back in April 2012.  He took four photos of the prototype, posted them on Facebook and wrote “I saw it at Taiwan Lab today”, “Seems it will be on the market soon”.  This triggered discussions on the Internet which alerted Samsung Taiwan.  On information of the unauthorized divulgence having stemmed from Sporton's Hsinchu lab, Samsung Taiwan demanded Sporton to look into the matter and the investigation that followed led to Hong.  Hong at first firmly denied until Sporton showed him the relevant evidence including his Facebook account name when Hong confessed he had done what he did out of curiosity but he never intended to violate any person's right.

According to Sporton, this event shocked Samsung at grave cost of Sporton.  Samsung decided that no purchase order shall be placed with Sporton for three months and refused to pay Sporton the price of USD31,000 for the testing job.   Further, this event seriously harms Sporton's business reputation, according to Sporton.  Sporton expressed that each of its new hires must sign a confidentiality agreement on the first day of their employment, which requires that they keep confidential throughout their employment and thereafter all information relating to the company and the clients or pay TWD5 million to the company.  Sporton therefore sued Hong claiming TWD5 million for his breach of confidentiality.

The judge holds that by unauthorizedly photographing and posting the photos of the tested cell phone, Hong violates the trade secrets of Samsung Taiwan in addition to his confidentiality agreement with Sporton.  In consideration of the photos divulging only the external appearance of the prototype and the interface of the links shown on the screen with no description of the functions of the cell phone, the judge finds Hong’s offense has resulted in insignificant impact on either the market expectation or the sales but the goodwill of Sporton.  However, taking into account of Hong being a father having to raise his child, the court reduces the award of Sporton's claim to TWD2.5 million.  With respect to the criminal charge, the court finds that Hong used computer equipment to divulge business secret known to or held by him by virtue of his functions and duties and therefore sentences him to 6 months' imprisonment pursuant to Article 273-1, the first sentence of paragraph one of Article 299, Article 317, Article 318-2, and the first sentence of paragraph one of Article 41 of the Code of Criminal Procedure.  (2013.03)

Note: Applicable statute to the case:
Article 317 of the Criminal Code:
A person who is required by law, order, or contract to preserve the commercial or industrial secrets of another which is known to or held by him by virtue of his functions and duties and who divulges the secret without reason shall be sentenced to imprisonment for not more than one year, detention, or a fine of not more than one thousand yuan.

Article 318-2 of the Criminal Code:
The punishment against a person who commits, by using a computer or relating equipment, the offenses specified in Articles 316 to 318 shall be increased by up to one half.