Former employee to pay TWD31 million for downloading former employer’s trade secrets

The former vice president of Schmidt Scientific Taiwan Ltd. (“Schmidt Scientific”), Lin, who had signed an intellectual property and confidentiality agreement with Schmidt Scientific before leaving the company.  However, before termination of his employment, Lin had downloaded trade secrets of Schmidt Scientific, including a lot of agency and distributorship agreements and also instigated one customer of Schmidt Scientific (“Company D”) to terminate its agency agreement with Schmidt Scientific and turn to cooperating with Lin’s new employer company.  Lin also prompted four employees of Schmidt Scientific to jump ship to be hired by Lin’s new employer.  Schmidt Scientific brought a lawsuit to claim damages against Lin on the ground that Lin violated the non-compete agreement signed with Schmidt Scientific and thus caused significant loss thereto.

Taiwan Taipei District Court tried heard this case initiated by Schmidt Scientific, finding Lin in violation of the non-compete agreement signed by and between Schmidt Scientific, for which Lin should pay for Schmidt Scientific’s loss of expected profits and default penalty in a total amount of TWD31 million based on the reasoning that the trade secrets Lin had downloaded are those accessible only to the management level of vice president and that the four employees jumping ship to Lin’s new employer are still responsible for the sale, service, maintenance, repairing of Company D’s products, which is obviously the result of intentional manipulation.  This case is appealable.  (November 2015)
/CCS