Discovery of Evidence in Trade Secret Civil Litigation
Date Issued
2015
Date
2015
Author(s)
Huang, Kang-Hsuan
Abstract
Trade secrets have been gaining attention globally, among other intellectual property rights. The Taiwan Trade Secret Act came into force in 1996. An amendment thereon, which mainly consisted of the inclusion of penalties for violation of the Trade Secret Act, was made in 2013 in response to urgent calls for strict penalties by enterprises. In Taiwan, the infringement of trade secrets can be resolved via civil proceedings. However, plaintiffs claiming infringement usually have difficulty proving the misappropriation of trade secrets, impeding plaintiffs’ ability to obtain remedies. Meanwhile, what is of more importance is to prevent further disclosure of trade secrets during civil proceedings. In the U.S. legal system, “Discovery” under Federal Rules of Civil Procedure has been widely used to collect evidence in civil cases. Besides, parties will typically obtain a “Protective Order” from the court to prevent disclosing any trade secrets or other proprietary information during the case. This thesis will introduce the concepts of “Discovery” and “Protective Order” under the U.S. regime and a comparison between the U.S. and Taiwan civil procedure system, with a focus on trade secrets civil litigation. This thesis will then propose improvements that can be made in under Taiwan legal system. This thesis first introduces the protection of trade secrets from the perspective of substantive law, offering an overview of the current status of trade secret protection in the U.S. and Taiwan. In general, both the U.S. and Taiwan have been dedicated to reinforcing the protection of trade secrets through either legislative or judicial practices. Any information that satisfies the requirements of a trade secret can be legally protected, and any misappropriation of the information as such can be remedied via civil actions. Thus, the remaining issue is how to improve current procedure in order to facilitate greater protection of trade secrets in trade secrets civil litigation. “Discovery” under the Federal Rules of Civil Procedure is a procedure for the parties to exchange and to collect information to be presented at trial. The rules of Discovery have been amended for the purpose of preventing fishing expeditions. Nowadays, judges will supervise the procedure while the parties are scavenging for evidence. A “Protective Order”, whether initiated by the parties or the court, has been of great use to prevent inappropriate disclosure of any trade secrets, whether owned by the parties or third parties, during Discovery. However, courts have been taking different approaches when dealing with discovery of allegedly infringed trade secrets in the Discovery process. A majority of courts have required the plaintiff to specify the misappropriated trade secrets at an early stage of the pretrial procedure. Protective measures are also taken by court to maintain the confidentiality. The current Taiwan Code of Civil Procedure and Intellectual Property Case Adjudication Act allow the parties to gain access to evidence in trade secrets civil litigation. Amendments have been made to the above Acts to provide the parties with more effective protective measures. Therefore, the remaining issue will be how to utilize the regime according to the nature of trade secrets civil litigation and the purpose of different phases of the proceedings. As proposed in this thesis, if any party moves for preservation of evidence before the action is brought up, the court should consider the competition between the parties when making its decision, and this criterion should also apply when any party moves for protective measures before the action is initiated. In addition, in order to strike a balance between the need to examine trade secrets and the right to nondisclosure, the protective measures taken should prevent the disclosure of details of the alleged trade secrets before the parties. The court may, for instance, request an independent, neutral third party or the Technical Examination Officer to examine the trade secrets at issue. The need to strike a balance between the parties’ property rights and their right to prove in trade secrets infringement cases remains significant after the lawsuit is filed. In an attempt to ease the plaintiffs’ burden of proof in trade secrets litigation, the legislators passed Article 10-1 of Intellectual Property Case Adjudication Act, but the effect of this Article still remains to be seen. This thesis thus proposes that the U.S. approach to specifying trade secrets may be applicable under Article 10-1. Besides that, to urge the parties to provide evidence relevant to the claim of infringement, the court may encourage the parties to agree on mutual protective measures or impose sanctions if any party or third party fails to fulfill its obligation to provide evidence.
Subjects
trade secrets
misappropriation
trade secrets litigation
discovery
protective order
protective measure
preservation of evidence
provide evidence
Type
thesis
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