Delta’s former senior executive sentenced to 2 years in prison for trade secrets theft

　In 2023, a corporate espionage case broke out at Taiwan-based tech giant, Delta Electronics, Inc. (hereinafter “Delta”).  In the case, Delta’s former senior executive, surnamed Juan, stole the confidential information pertaining to the R&D project in collaboration with Tesla for the “wall-mounted AC charging station” (hereinafter the “technology at issue”) and passed on the information to his new employer, a Chinese technology company, which caused tremendous loss to Taiwan’s tech industry.  Taiwan Taoyuan District Court heard this case and rendered a judgment, sustaining Juan’s violation of the Trade Secrets Act and sentenced Juan to two years in prison for the intent to use the stolen information in China.  

　Taoyuan District Court sustained Juan’s violation of the Trade Secrets Act based on the findings summarized below:  Juan copied the files containing the information pertaining to the technology at issue developed by Delta, and these files were Delta’s trade secrets with confidentiality and economic value and were well and reasonably protected.  By the excuse of working overtime, Juan made a backup of these files to a cloud drive.  He also made backup copies of these files on his personal computer by the pretext that he was trying to prevent loss of these files in case of the failure of the hard drive in the computer provided by Delta.  In addition, Juan defended himself by saying that he indiscreetly copied these files to the computer provided by his new employer while copying the publicly accessible relevant laws and regulations for dictionary purpose.  Based on the foregoing, Juan argued that he held no subjective intent to violate the Trade Secrets Act.  

　Moreover, the judge ruled that Juan’s act of making copies of Delta’s confidential files to his personal computer obviously violated Delta’s information security policy.  According to Delta’s policy, employees are prohibited from taking documents home for overtime work, storing them on personal storage devices, as well as uploading them to any personal cloud drives.  As such, if Juan violated the policy by storing confidential files in his personal computer for overtime work, he should have removed and deleted those files after completing his work or upon resignation and signing the resignation letter.  There is no justification for deliberately violating Delta’s confidentiality measures and failing to remove those files and also retaining them for a long period of time.  The foregoing makes it clear that Juan’s defensive arguments are to evade his liability and therefore should be inadmissible.  

　In addition, if the relevant laws and regulation Juan mentioned were readily and publicly available to anyone, Juan could have accessed to those laws and regulation through search online or any other legal channels during his employment in China, and as such, it is totally unreasonable for Juan to copy those laws and regulations together with Delta’s confidential files onto his computer provided by his new Chinese employer.  In terms of empirical rules and the laws of logic, it is more likely that Juan copied both those laws and regulation together with Delta’s confidential files in the same folder as his reference materials during his employment in China for ease of access and retrieval, and he made up the foregoing plausible pretexts out of panic when confronting the prosecutor and the police who found out the actual situation through examining the seized items.  

　Based on the foregoing findings, Taiwan Taoyuan District Court held that Juan, as a former R&D staff member at Delta, clearly knew that the said technical information is Delta’s trade secrets and the use of it, if any, would not only cause adverse impact on Delta’s competitiveness in the electric vehicle charging station market but also forcefully hit the backbone of Taiwan’s high-tech industry.  Despite of this, Juan, however, still intended to use the said information in China to infringe upon Delta’s trade secrets.  According to Delta’s statements, the said confidential information is independently developed by Delta and also the result of Delta’s long-term and persistent tests and verification so as to hold uniqueness and technical superiority in the field of charging station for electric vehicles.  Therefore, the said information is classified as Delta’s top trade secret, which is not known or accessible to those not directly involved in such information, and hence, there should be an extremely slim chance for other manufacturers or suppliers to develop a design completely identical to Delta’s said technology in terms of the specification and technology.  

　Delta estimated the value of the trade secret involved in this case to be TWD134.95 million spent in R&D and production, while the project for Tesla’s second-generation wall-mounted AC charging station generates annual revenue of up to USD160 million.  Juan’s foregoing acts cause Delta’s tremendous business loss in every year.  In consideration of the extremely huge infringement upon legal interests and loss caused by Juan’s foregoing acts and his post-offense incomplete repentance and failure to compensate Delta’s loss or to gain Delta’s understanding, Taiwan Taoyuan District Court sentenced Juan to 2-year imprisonment for violation of the Trade Secrets Act.  (Released 2024.07.30)
/CCS