After the introduction in "The Battle on Trade Secrets Protection – Reasonable Protective Measures," we see that the essence of "reasonable protective measures" lies in "reminding." Reminding of what? Reminding employees that the information held is important, reminding them not to take documents away recklessly, reminding them to return the documents upon offboarding, etc.

Some companies may believe that the purpose of implementing "reasonable protective measures" is to 100% prevent the leakage of trade secrets. However, in my years of experience handling financial and intellectual property crimes, there's an old saying that aptly describes my observations: "The higher the wall, the smarter the thief." In other words, if someone has the will, there seems to be no data that can't be taken. Therefore, I want to emphasize once again that "reasonable protective measures" for trade secrets are about "reminding," and the level of protection—whether strict or lenient—should depend on each company's manpower, financial resources and available materials.

So, how can a company remind employees? This article offers a simple and easy-to-remember suggestion: companies should establish or review their protective measures based on "three phases,” i.e., focusing on managing employees during their "onboarding," "employment," and "offboarding" phases. It’s important to emphasize that there are many protective measures that can be established (or copied) at each stage, but companies shouldn’t strive for perfection from the start. Instead, they should proceed step by step, based on their internal culture (how importance this issue is to the company), interdepartmental coordination, manpower, financial resources, and available resources.

Next, let’s talk about suggestions for reasonable protective measures during the employee's "onboarding" phase. As mentioned earlier, there are many measures available online that can be referenced or copied, but at this stage, companies should pay attention to at least the following two points:

1. Customization of the confidentiality scope in employment contracts (confidentiality clauses) or confidentiality agreements:

In this part, I’d like to first ask readers a question: "Is 'I know confidentiality is important' the same as 'I know this information is a trade secret'?" Or to be blunt: "People shouldn't leak information" or "People need to keep information confidential"—aren’t these things we've known since we were students? Do we need to sign confidentiality agreements to know that? Therefore, the key to a confidentiality agreement should be that the company first inventories its trade secrets (creating a list), and then includes the general "names" or "categories" of the trade secrets from the list in the confidentiality clause. Only through this way that the effect of “reminding” employees can be achieved. Unfortunately, it’s common to see companies copying the definition of trade secrets from Article 2 of the Trade Secrets Act verbatim into their confidentiality clauses. To be honest, this has no reminding effect at all. Simply put, this is not considered a reasonable protective measure.

2. Knowing existing intellectual properties in possession by new employees and the related obligations:

Why is this important? Let’s first consider this example and see if Company A has any responsibility. Engineer A hopped from Company B to Company A to take on a similar job. Later, Company B discovered that Engineer A had illegally downloaded confidential information from Company B using a USB drive, and Company B immediately filed a complaint with the Investigation Bureau. After a search, the bureau found that the confidential information had already been used in Company A. Article 13-4 of the Trade Secrets Act states, "Where the representative of a juristic person, the agent, employee or any other staff of a juristic person or natural person commits any of the crimes prescribed in Article 13-1 or 13-2 in the course of business, not only the actor, but the juristic person or the natural person shall be punished with the fine prescribed in the Article. However, if the representative of a juristic person or natural person has done his/her utmost to prevent a crime from being committed, the juristic person or natural person shall not be punished." Coming back to this case, if Company A has not done everything possible to prevent the new employee, Engineer A, from infringing on others' trade secrets, it could also be criminally liable. Therefore, companies are advised to have new employees fill out forms like "Intellectual Property Obligations Questionnaire" to avoid potential risks.

This article was published in the Expert’s Commentary Column of the Commercial Times. https://www.chinatimes.com/newspapers/20240614000216-260209?chdtv

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