Lu T'ien-pao et al. (seven respondents in total) of Ripo International Bio-technology Co., Ltd. were complained for stealing another company's trade secrets in violation of the Fair Trade Law

Chinese Taipei

Case:

Lu T'ien-pao et al. (seven respondents in total) of Ripo International Bio-technology Co., Ltd. were complained for stealing another company's trade secrets in violation of the Fair Trade Law

Key Words:

trade secret, technology concepts, improper means

Reference:

Fair Trade Commission Decision of September 12, 2002 (the 566th Commissioners' Meeting); Letter (91) Kung Erh Tzu No. 0910009140

Industry:

In-Vitro Diagnostic Reagent Manufacturing (1825)

Relevant Law:

Article 19(v) of the Fair Trade Law

Summary:

1. A complaint was filed with the Fair Trade Commission (FTC) by Genexis Bio-Science of Taiwan Co., Ltd. (hereinafter Genexis, or “the complainant”) accusing Ripo International Bio-technology Co., Ltd. (hereinafter “Ripo”, or “the respondent”) of violating the Fair Trade Law. According to Genexis, it commissioned outfitting and installation work on its facilities to Lu T'ien-pao, the chairman of the Association of the Joint Force of Police and Citizens for Public Security, and members Chang Fu-mei, Ou Pi-yu, Hsieh Jung-chih, Ou Chih-kuo, Hsieh Mei-ling, and Weng Wu-pin in 2000, with Lu as the team leader. Genexis claimed that it later discovered in August 2001 that the company's confidential documents and manufacturing process were incorporated in the respondent's business plan for the establishment of Ripo International Bio-technology Co., Ltd. The stolen materials, along with names and titles of Genexis's research staff that the respondent included in their R & D group without the complainant's permission, were submitted as part of application materials to the Tainan Science-based Industrial Park to set up operations in the Park.

2. The FTC found as follows after investigation: Beginning in February 2000, Lu T'ien-pao et al. began participating in plant setup work for Genexis, and were then involved in the company's business. In August 2001, however, the complainant discovered that they had established another company named Ripo International Bio-technology Co., Ltd. The complainant further discovered that the operations proposal that Ripo submitted to the Tainan Science-based Industrial Park for a place in the Park contained information and technology that originally belonged to Genexis. The respondent was alleged to have improperly included in its management team names and titles of people working for Genexis. And the technology concepts of the “holistic hemo-diagnostic meter,” the complainant further claimed, were plagiarized from Genexis. These circumstances, in addition to existing financial disputes between the parties, led to the eventual split-up of the parties' cooperative relationship. In its defense, Ripo argued that the roster of the management group and relevant technologies contained in the business plan were the company's tentative proposal. After evaluation, the plan to set up operations in the Tainan Science-based Industrial Park had already been abandoned. Ripo had, on the other hand, sought R&D cooperation with the Industrial Technology Research Institute, and, accordingly, Ripo maintained, its technologies were acquired through due licensing unrelated to Genexis.

It was found that the disputed concept, a “holistic hemo-diagnostic meter,” which, if fully realized, would supposedly enable the detection of multiple diseases through the examination of a few drops of blood, was still a concept under development by both parties, and not yet a mature technology. The technological concepts the complainant claimed were stolen could therefore be said to be an R&D focus worth exploring at best, and the business plan a tentative one during the company's establishment stage.

3. In summary, the aforesaid concept cannot be found to constitute a trade secret. In its defense and as proof of the sources of its technologies, Ripo also produced the contract that it entered into with the Industrial Technology Research Institute and relevant research papers. As there was insufficient evidence to prove that the respondent acquired the complainant's trade secrets by coercion, inducement with profit, or other improper means, the respondent's violation of Article 19(v) of the Fair Trade Law may not be found.

Appendix:

Genexis Bio-science of Taiwan Co., Ltd.'s Uniform Invoice Number: 16356456

Ripo International Bio-technology Co., Ltd.'s Uniform Invoice Number: 13035489

Summarized by Lin, Chia-Ti; Supervised by Lin, Gin-Lan