IP Court affirmed judgment favorable to ASE in trade secret infringement case
Advanced Semiconductor Engineering Inc. (“ASE”) entrusted the manufacture of clean room suits (shoes) to Hugeteck Co., Ltd. (“Hugeteck”) in August 2013 with a non-disclosure agreement executed by and between them. Unexpectedly, ASE found that Hugeteck’s responsible person, Chen, filed patent application for ASE’s trade secrets and thus sued Hugeteck and Chen. During the first instance proceedings, Taiwan Ciaotou District Court heard this case and found Chen’s argument inadmissible that the clean room suits (shoes) were a result of his own idea and design, and therefore, imposed a penalty of TWD2 million on Hugeteck and 18-month prison sentence on Chen for violation of Trade Secrets Act. Hugeteck appealed this case to the appellate court, the IP Court, which then imposed a TWD1.8 million penalty on Hugeteck and sentenced Chen to imprisonment for 14 months and also granted 3-year probation on Chen for their violation of Trade Secrets Act, in view of the fact that ASE and Chen reached a settlement with Chen to have transferred the relevant patent to ASE without seeking considerations and proposed a damages payment of TWD3 million.
As addressed in the IP Court judgment, Chen had access to the design concept of the clean room suits (shoes) as a result of Hugeteck’s cooperation and NDA execution with ASE in August 2013. Subsequently in September and October 2013, Hugeteck failed ASE’s second inspection on the clean room suits (shoes) samples, for which ASE provided the sample of another supplier. Hence, Hugeteck had access to the knowledge regarding the overall design and sewing method of the clean room suits (shoes).
Further in December 2013, Hugeteck’s samples still failed ASE’s inspection for the third time. After the inspection failure in December 2013, Hugeteck, through ASE’s employees, had access to the trade secrets with respect to the conduction band design, static resistance, manufacturing drawing of the wrist and ankle of the clean room suits (shoes), the materials of webbing, and zipper and sewing method, etc. in April 2014. In May 2014, Hugetech announced that they pulled out of the purchase project of clean room suits (shoes) due to its successive failure in the sixth inspection. Subsequent to Hugeteck’s withdrawal, Chen, however, filed patent application with Taiwan IPO and successfully acquired two patents for “Conductive webbing-connecting one-piece type clean room garment” and “Conductive webbing-connecting clean room shoes” in September 2014. ASE was informed of Hugeteck’s success in patent application and thus filed a lawsuit against Hugeteck and Chen.
The IP Court ruled against Chen on the ground that Chen, for seeking illegal profits, had access to and took advantage of ASE’s trade secrets to successfully acquire a patent with clear knowledge that the clean room suits (shoes) orally described and presented to him by ASE’s employees and relevant emails and other information related thereto he had access to carried their economic value and confidentiality and were kept confidential by necessary measures as ASE’s trade secrets. Probation was granted to Chen in view of his settlement with ASE. (April 2019)