TSCM Wins Case Against Former Exec for Leaking Trade Secrets to Samsung

The trade secret lawsuit brought by Taiwan Semiconductor Manufacturing Company Ltd. (TSMC) against the former senior R&D director, LIANG Meng-Song (Liang) is concluded by the Taiwan Supreme Court’s ruling in favor of TSMC that Liang, who was accused of disclosing classified trade secret to TSMC’s archrival, Samsung, is barred from working for Samsung until the end of 2015 and disclosing TSMC’s trade secrets and any information relating to TSMC’s R&D personnel so as to avoid Samsung’s intentional recruiting talents from TSMC, which ruling is final with binding effects. 

The Supreme Court’s ruling against Liang is a crucial and precedent setting one because this is the first time that the Taiwanese court makes a ruling prohibiting a former executive of a company from working for that company’s competitor particularly after his/her non-compete agreement with the former employer has run out. 

The fact triggering this lawsuit is that Liang left TSMC in 2009 and started to teach at the Sungkyunkwan University, whose major backer is Samsung.  After his non-compete agreement with TSMC expired in February 2011, Liang took a job position as R&D chief technology officer at Samsung in July of the same year.  This move caused TSMC to file a lawsuit with Taiwan IP Court against Liang to allege that Liang leaked TSMC’s trade secrets and raised with the IP Court three claims prohibiting Liang from (1) disclosing the trade secrets he had known during his employment at TSMC, (2) disclosing the information relating to TSMC’s R&D personnel to Samsung, (3) working for Samsung in any form through the rest of the year.

The IP Court decided in the first instance to grant TSMC’s first and second claims and held the third claim groundless by the rationale that the non-compete clauses for two years signed between TSMC and Liang had already expired in February 2011.  TSMC appealed this case to the higher court. 

Based on the fact that the private research university where Liang taught as a professor is Samsung-affiliated, the IP Court reversed the original decision and handed down a judgment in favor of TSMC at the second instance proceeding and forbad Liang to work for nor render service of any kind to Samsung until the end of this year.  Liang then appealed to the Supreme Court and the appeal was dismissed by the Supreme Court by the final ruling.  (August 2015)
/CCS