MSSCORPS Co. Ltd., TMSCORPS Co. Ltd., Integrated Service Technology Inc. and Pu Shih To Delicacy Co. Ltd.

Case:

Key Words:

business secrets, non-compete

Reference:

Fair Trade Commission Decision of May 3, 2007 (the 808th Commissioners' Meeting)

Industry:

Other Technical Testing and Analysis Services (7129)

Relevant Laws:

Article 19(1),(3) and (5), 22 and 24 of the Fair Trade Law

Summary:

1. After the employees of Material Analysis Technology Inc. (hereinafter called "complainant"), Mr. Chen, Jung-Chin and Mr. Wen, Jen-Chi, left their company in 2005, they were hired by MSSCORPS Co. Ltd. (hereinafter called "MSSCORPS") within two years. On behalf of MSSCORPS, Mr. Chen did not only conduct business transactions with the trading counterparts of the complainant, but also recruited talents from the complainant grossly by defaming the complainant in the words, "The complainant has no competitiveness after Mr. Chen left office." In the same way, Mr. Wen provided the information of the trading counterparts for MSSCORPS. Then, the complainant issued letters to inform Mr. Chen and Mr. Wen that they violated the non-compete clause in the employment contracts. Mr. Wen responded to the complainant that he was employed by Pu Shih To Delicay Co. Ltd. (hereinafter called "Pu Shih To") at that time and did not violate such a clause. After the complainant conducted an investigation, it is found that Pu Shih To and TMSCORPS Co. Ltd. (hereinafter called "TMSCORPS") had the same business address. Thus, the complainant believed that this arrangement was obviously to help Mr. Wen to avoid violating the non-compete clause. Additionally, MSSCORPS and "National Nano Device Laboratories"(hereinafter called "NDL"), National Chiao Tung University, signed a Strategic Alliance Cooperation Agreement on May 8, 2006; the content of its press release and the content of "Operation Plan" of the complainant were however identical – this matter obviously showed that Mr. Chen and Mr. Wen provided this knowledge based on their working experiences in the complainant. In the same way, no technicians in MSSCORPS had ever worked or conducted researches in the technology industries, TFT-LCD and LCOS; therefore, MSSCORPS, by stating untrue messages, conducted unfair competition. In conclusion, MSSCORPS, TMSCORPS, Integrated Service Technology Inc. and Pu Shih To violated Articles 19(1), (3) and (5), 22, and 24 of the Fair Trade Law.
2. Findings of FTC after investigation:
1. Findings of FTC after investigation: Without warnings, Tokyo Electron Ltd. (hereinafter called "TED") reduced the cases in considerable quantities entrusted to the complainant and planned to cease its cooperation with the complainant. Although this matter was related to the circumstance that Mr. Chen, Jung-Chin made the statement about the loss of samples to TED, his statement was true and the complainant admitted that the statement was related to this case. It was also found that the complainant cleared the matter up with TED then and both parties continued to cooperate. Additionally, the fact that NDL turned to form a strategic alliance with MSSCORPS might be a result of MSSCORPS' endeavor. The fact that enterprises strive for trading opportunities is attributed to general conditions of business operation; and in terms of the existing evidence, it would be difficult to find that they violated Articles 19(1) or (3) of the Fair Trade Law.
2. The complainant additionally indicated that MSSCORPS stole its "Operation Plan" and signed a Strategic Alliance Cooperation Agreement with NDL – these matters were evidenced in the news release published by NDL. After examining the content of the news in casu, the purpose of the news was to explain MSSCORPS' business lines and fields of profession; the content of the news, to some extent, was identical with the content of the brief introduction of the complainant. Therefore, it would be difficult to find that such information had practical or potential economic values. As such information was general knowledge known by people working in the said type of information technology business; it would be also difficult to regard such information as "business secrets." Additionally, the complainant claimed that the complained acquired the information of the trading counterparts of the complainant from Mr. Wen, Jen-Chi who gave the name cards to the complained. As a name card only contained the basic information, name, the name of the company and telephone number and hence it did not expose sensitive information concerning competition, the trading relationship between the complainant and the companies, it would be difficult to identify that such a name card contained commercial information which had economic values and the information which was easily obtained in industries, and that MSSCORPS violated Article 19(5) of the Fair Trade Law.
3. Additionally, the findings of FTC investigation showed that no concrete evidence had yet been found to prove that Mr. Chen, Jung-Chin disseminated the speech, "The complainant has no competitiveness after Mr. Chen left office" to the trading counterparts of the complainant, and such enterprises had not ceased to trade with the complainant. Additionally, although Mr. Chen's statement on the loss of samples to TED was attributed to a fact, it would be still difficult to find that the complained parties violated Article 22 of the Fair Trade Law.
4. As for the claim that in order to seize the trading opportunities with the trading counterparts of the complainant, the complained parties jointly helped Mr. Chen, Jung-Chin and Mr. Wen, Jen-Chi to avoid the non-compete clause as provided under the employment contracts, the decision on whether two people violate the clause is still unsure as the issue falls under the scope of civil law and the case is pending at the civil court. In addition, the issue is different from the issue concerning commercialized products and services – it is attributed to employment contracts and rights and benefits of employees. Additionally, the complained parties conduct an act which is to assist its employees in related litigations and such an act also falls under their work conditions. Therefore, it is still difficult to find that the complained parties violate Article 24 of the Fair Trade Law.

Appendix:
MSSCORPS Co. Ltd.'s Uniform Invoice Number: 27853425
TMSCORPS Co. Ltd.'s Uniform Invoice Number: 27378288
Integrated Service Technology Inc.'s Uniform Invoice Number: 89845410
Pu Shih To Delicay Co. Ltd.'s Uniform Invoice Number: 27638566

Summarized by Chen, Haw-Kae; Supervised by Liou, Chi-Jung