Review of Singapore IP Dispute Resolution Development
Review of Singapore IP Dispute Resolution Development
Preface
In recent years, advantage of capital and productivity are not enough for company to stand out from the business battle. Innovation and creation become the driver of business growth. Intellectual Property (“IP”) Right turns out to be the power to boost international competitiveness.
In March 2013, Singapore submitted 10-year IP Hub Master Plan to guide Singapore’s development as a Global IP Hub in Asia. Six Strategies are identified from IP Hub Master Plan. This article focuses on strategy 4, developing Singapore as a choice venue for IP dispute resolution through a strong IP Court and deep IP alternative dispute resolution capabilities, to understand how Singapore attracts various stakeholders and hence create a hive of IP activities by adopting tailored processes to facilitate the resolution of IP cases and promoting alternative dispute resolution.
Key Points of IP Dispute Resolution
When it comes to IP issue, oblige will take either marketplace or area of IP application into account for choosing jurisdiction of dispute resolution. The major IP war occurs in America and China. Although Singapore deals with less IP case, the government considers itself as a transparent, efficient and neutral justice system, coupling with lots of transnational divisions in Singapore, which creates an opportunity to develop IP dispute resolution.
To achieve the goal, Singapore puts its hand to enhance capabilities of IP Court and IP alternative dispute resolution for bringing more IP litigations and IP alternative dispute resolution to Singapore.
1. Enhance Capabilities of IP Court
(1) Efficiencize Processes
In September 2013, the Registrar of the Supreme Court released Circular 2 of 2013 on the issuance of the IP Court Guide, which will apply to all cases under the IP docket of the Supreme Court with immediate effect. An IP Judge will be assigned to hear all interlocutory appeals, milestone pre-trial conferences (“PTCs”) and the trial on liability.
The IP Court Guide provides for two milestone PTCs before set down for trial whereby the lead counsel must personally attend to address the IP Judge on certain specified issues. All other PTCs will be heard by the senior assistant registrar managing the IP docket. Subject to certain exceptions, an assistant registrar will hear all interlocutory applications arising in each IP case.
In addition, to support the IP Court’s adjudication functions, the IP Court Guide provides for the appointment of assessors (for technical expertise) and amicus curiae (for legal expertise) for IP cases. Parties are encouraged to propose a single candidate by agreement. Otherwise, parties should agree on and propose a shortlist of candidates.
Due to improvement, it is more convenient for parties to track trail status. For IP Judges, they can get familiar with cases and related evidence through PCTs before entering trail process. On the whole, this change increases trail efficiency and quality.
(2) Set Up Singapore International Commercial Court
The Ministry of Law proposed amendments to the Constitution of the Republic of Singapore and the Supreme Court Judicature Act in October 2014. The new legislation and regulations laid the foundation of Singapore International Commercial Court (“SICC”), which was set up in January 2015.
The SICC, the only one International Commercial Court in Asia, is a division of the Singapore High Court and part of the Supreme Court of Singapore designed to deal with transnational commercial disputes including business issues and patent suits.
Key Features of the SICC:A. SICC matters will be heard by a Panel comprising High Court Judges, associate Judges and foreign associate Judges with extensive experience and highly regarded reputation.
B. A party may be represented by a registered foreign counsel without any involvement of local Singapore counsel if the matter in question is considered to be an “offshore case”. An “offshore case” is defined in the amended Rules of Court as a case which has no substantial connection to Singapore either because
(i) Singapore law is not the law applicable to the dispute and the subject matter of the dispute is not regulated by or otherwise subject to Singapore law, orC. The SICC will hear cases governed by Singapore law and by foreign law, with the Court taking judicial notice of the foreign law. In addition, the SICC is not bound by the domestic rules of evidence at all and may apply other rules of evidence whether they are found in a foreign law or otherwise, if the parties make an application for it.
(ii) The only connection between the dispute and Singapore are the parties’ choice of Singapore as the law applicable to the dispute and the parties’ submission to the SICC’s jurisdiction (“Singapore Law-only Connection”).
2.Strengthen Capabilities of IP Alternative Dispute Resolution
Singapore International Arbitration Center (“SIAC”) and the WIPO Arbitration and Mediation Center Singapore Office were set up respectively in 1991 and 2001 to strengthen capabilities of IP arbitration. On the basis of these two centers, in order to enrich alternative dispute resolution, Singapore also established Singapore International Mediation Center (“SIMC”) and launched the service of arbitration-mediation-arbitration (“Arb-Med-Arb”) in November 2014.
Arb-Med-Arb is a process where a dispute is referred to arbitration before mediation is attempted. If the parties are able to settle their dispute through mediation, their mediated settlement may be recorded as a consent award. If the parties are unable to settle their dispute through mediation, they may continue with the arbitration proceedings. Arb-Med-Arb is definitely a better way for parties to reach a consensus on a dispute since arbitration is more costly and mediation is less powerful.
Conclusion
The SIMC and the SIAC are now collectively working on mediation, Arb-Med-Arb and arbitration and providing various IP alternative dispute resolutions. Moreover, the SICC and IP Court are charged with IP litigation. These make Singapore a comprehensive IP dispute resolution system.
In the process of revolution, Singapore puts itself up to breakthrough as to amendments and the Supreme Court Judicature Act, which establish legitimacy of SICC. The government also defines IP dispute resolution services, such as SIMC’s mediation, Arb-Med-Arb, arbitration as well as SICC features. Nevertheless, other than SIAC, SICC decision may be difficult to enforce transnationally due to lack of legislation.
To sum up, Singapore earns recognition for aggressively proposing amendments and assigning responsibilities after setting IP target and evaluating obstacles; however, it is better to pay special attention to that if the market can keep up with administrative efficiency or if the IP strategy could accord with the demands of the market.
Chien-Shan Chiu Background In the era where inventions drive the economy, the ability to create, capture and protect these inventive ideas has become vital for a corporation to stay competitive and sustain profit growth. Various government policies have been implemented in order to stimulate inventions and to strengthen the ability to protect these inventions through effective use of intellectual property (“IP”) rights. For the past few years, the TIPS (Taiwan Intellectual Property Management System) project has been promoted extensively aiming to increase public awareness towards IP rights and to assist local companies to establish a systematic and comprehensive IP management system. Over the years, the TIPS project has received wide recognition and positive feedbacks, and many TIPS-implemented companies are ready for the next challenges. After an extensive research, the project proposes to follow the international trend of encouraging companies to make better and more disclosure of intangible assets that are not often shown in the traditional financial statements1 . Local companies with effective IP management system and strategy are encouraged to compile an “Intellectual Property Management Report” summarizing its business, R&D and IP management strategies as well as their accumulated IP assets. In order to compile an Intellectual Property Management Report, a company is advised to re-identify its intellectual property, re-think about its strength and weakness in every aspect and where necessary, the company may also need to re-conduct a market, technology trend or competitor’s analysis, through which it is believed that a better and more effective IP strategy will be re-formulated. Formulating a well-planned corporate strategy that takes into account various IP issues is one of the main reasons for introducing the corporate IP disclosure framework. Promoting the disclosure of IP-related information so that the management efforts, visions and true capabilities of a corporation can be fully disclosed and recognized is the second major reasons for introducing the corporate IP disclosure framework. This essay begins with a brief update on the yearly progress of the TIPS project, follows by a summary of the research report on corporate investors’ view on initiating a framework for enhancing disclosure of corporate IP-related information. The research report contains the result of a survey conducted between April and June this year (year 2009), consisting questions to uncover local investors’ view and attitudes towards corporate IP, and to identify kinds of IP-related information required when making an investment decision as well as to find out to what extend local investors would support the government’s initiative on promoting a corporate IP disclosure framework. Update on the Yearly Progress of the TIPS Project In order to facilitate the promotion of TIPS, several supplementary services have been introduced (fees and expenses are fully or partially subsidized by the government this year) : (1) Free On-Line Self-Assessment Tool; (2) On-Site Diagnostic and Consulting Service (selected companies were fully subsidized); (3) “Demonstrative” Model Companies (selected companies were partially subsidized); (4) IP Management Courses (partially subsidized); (5) On-Site Auditing (for the Conformance of TIPS requirements) and issuing of the TIPS Compliance Certification (fully subsidized) . To the end of 2009, 401enterprises have completed the on-line self-assessment questions; 93 companies have received on-site diagnostic and consultation services; 847 persons have taken the IP management courses; 64 enterprises have successfully obtained the certificates for the compliance of TIPS and more than 299 enterprises have either completed or in the middle of implementing TIPS. Summary of the Research Report on Corporate Investor s’ View on Introducing a Corporate IP Disclosure Framework Even though it is clear that the idea of encouraging corporations to disclose non-financial information has started few decades ago in Europe and are currently being vigorously promoted by many major countries, we believe that in order to facilitate smooth promotion of the new IP disclosure framework, it is important to find out the local investors’ views and attitudes towards IP and to know how investors see the role of IP can play in a local corporation. Hence a survey was conducted at the initial stage of preparing the new corporate IP disclosure framework in Taiwan. The survey was sent via both mails and emails to 357 corporations, including venture capital firms; trust, investment consulting or management firms; security corporations, financial institutions and banks. More than one set of survey questionnaires could be distributed in one corporation to be filled by investors/analysts that are specialized in investing different industrial sectors. As a result, a total of 495 set of questionnaires were distributed.. Basic Data The survey was conducted between April to June 2009. At the end of June, a total of 150 investors/analysts responded which equals to a 33% response rate. Most of the survey respondents specialized in investing in various industrial sectors which include: semi-conductor; telecommunication; electronic components; 3C products; IT; optical; biotechnology; pharmaceuticals; new energy resources; media; creative and culture and traditional manufacturing industries. Around 50% of the survey respondents have more than 5 years’ experience in investment; among them, 23% of the survey respondents have more than 10 years’ investment experience. Investors recognize the importance of IP A remarkable 94% of the survey respondents recognized that the ability to create, protect, manage and exploit IP has become an essential element for a company to stay competitive and sustain growth in today’s market environment. 88% of the survey respondents believe that companies with more or better IP assets are more likely to generate profits and 91% believe that such companies are more likely to survive in this ever-increasing competitive environment. Yet, 94% of the survey respondents agreed that not only a company should actively create IP assets, but the ability to exploit and thus extract value from the accumulated IP assets is what makes a company stand out among the others. Taking a step further, the survey result reveals that the respondent investors believe a company with effective and well-planned IP strategy is likely to: – Enhance its market competitiveness (84%); – Raise its overall corporate value (71%); – Maintain its market position (55%); – Increase its profitability (32%); – Affect its share price (30%); – Assist investors in evaluating such company’s managerial ability and performance (29%) as well as evaluating its future growth potential (28%). IP-related information influences investors’ investment decisions Given that most investors see the ability to create, manage and exploit IP assets as well as having a well-planned IP strategy are crucial for the survival of a company, 82% of the survey respondents indicate that IP-related information has been considered when making an investment decision. Furthermore, 85% of the survey respondents think that they will place greater emphasis on IP in assessing companies in the future. Indicators that used to assess/evaluate a company Most often used IP-related indicators identified by the survey respondents when making investment decisions are: – Core technology and its market competitiveness (77%) – Research ability (experience and achievement) (73%) – IP protection and management measures (41%) – IP strategy (align with overall corporate strategy and market/technology characteristics) (40%) – Ability to fully utilize self-owned IP assets (38%) – R&D expenditure and investment (35%) – No. of IP assets (35%) – Time taken for competing products to enter into the market (33%) – Cost of maintaining IP assets (19%) Ratio of intangible assets as to the overall corporate value (19%) : 20% of the survey respondents indicated that they have turned down investment in the past for inadequate IP awareness of the target companies. List of local companies with good and effective IP strategy The survey respondents were asked to name local Taiwanese companies which in their mind have most effective and sound IP strategy. Taiwan Semiconductor Manufacturing Company (TSMC), Foxconn, United Microelectrc (UMC), HTC, Acer are the top 5 most named companies given by the survey respondents. Having good quality of patents (such as essential or new technology patents); detailed and complete patent map; sound IP strategy; brand and professional IP/legal department are cited as the reasons that impress these investors. Inadequacy of public available IP-related information While most investors acknowledge the importance of IP and take into account various IP-related indicators when making investment decisions, 76% of the survey respondents expressed that currently, the amount of IP-related information disclosed by companies are not sufficient for them to make an informed investment decision. When a question asking the survey respondents to identify the channels by which they obtained their desired IP-related information, the results were quite spread out. 45% of the survey respondents relied on asking the top managers directly; 43% relied on annual report; media and news (35%); website (34%); industrial journals (25%); competitors (15%) and other private channels (15%). It appears that various sources were used but no particular source provides sufficient information. Indeed, a remarkable 91% of the survey respondents believe that if there are more channels provided for corporations to disclose their internal IP information, more accurate assessment of the corporate value can be made. Support government’s initiative of promoting IP reporting framework Further, 73% of the survey respondents expressed their willingness to support the government’ s initiative of encouraging local companies to disclose their IP-related information. In relation to the initiation and promotion of the corporate IP disclosure framework, 64% of the survey respondents responded that it would be better to adopt a voluntarily disclosure policy and decide whether to switch to mandatory disclosure later; 22% think that only a voluntarily disclosure policy should be adopted followed by 14% of the survey respondents who believe that the government should adopt a mandatory disclosure policy from the start. When the survey respondents were asked to provide suggestions to facilitate the promotion of the corporate IP disclosure framework, the following suggestions were picked by the survey respondents: – Provide valuation tools to assist investors in assessing and analyzing IP related information (40%); – a central platform to collect and display all the complied IP management reports (21%); – lists of compulsory items to be disclosed in the report (21%); and – regulate the frequency of updating the contents of the report (15%). Conclusion Based on the results of the survey, we can conclude that the local investors’ view and attitude towards IP are similar to those in overseas. Majority of the investors (> 90%) see IP as valuable tools that could assist companies to create profits and sustain growth in today’s competitive market. While most of the investors (82%) have taken into account relevant IP information when making investment decisions, 76% of the survey respondents expressed that the amount of corporate IP-related information disclosed by companies are insufficient for them to make informed investment decisions. This is an important message that local companies should pay particular attention. It is hoped that through the introduction of the corporate IP disclosure framework, more adequate corporate IP information will be disclosed to assist investors in making better and accurate investment decisions. Consequently, a company’s true capabilities, managerial efforts and the intangible assets created upon can thus be fully appreciated and reflected on its market value. 1 Various national and institutional initiatives addressing the disclosure of corporate intellectual assets are currently being promoted vigorously at the international level such as Japan’s “IA based Management Report, (METI)”; Denmark’s “Intellectual Capital Statement (MSTI)”; European Union’s “Guidelines on Intangibles, MERITUM project”; U.S.’s “EBR 2.0 (Enhance Business Reporting Consortium)”; and The World Intellectual Capital/Assets Initiative (WICI) is currently working on developing a voluntary global framework for measuring and reporting corporate performance.
A Preliminary Study on The Legal Effect of the Blockchain-Generated Data in TaiwanA Preliminary Study on The Legal Effect of the Blockchain-Generated Data in Taiwan I. Preface Governments around the world have set various regulations and guidelines to deal with the increasing application of blockchain technology, trying to keep the law up to date with technological development and the latest trends. Among them, the application of blockchain technology to regulations has become a hot topic. Because of its features, such as immutable, easy to verify and transparently disclosed, it can improve the efficiency of law enforcement and reduce cost. Moreover, decentralization and the verification mechanism generated by mathematical computation can avoid the disputes arising from the existing system, in which the mechanism is set up and controlled by independent institutions, and thus the credibility could be universal. The international trend also shows the importance attached to the application of blockchain technology in the legal field. In 2017, the “Legal Services Innovation Index”, a study conducted by the Michigan State University College of Law and Google evaluated the level of innovation of law firms according to the search data on innovation indicators of the world’s major law firms. Blockchain has the highest number of clicks among all indices, and the average number of clicks of blockchain is more than twice that of AI.[1] In addition, there are international cases regarding the connection between the blockchain technology and legal provisions as well as the real cases that used blockchain technology to handle legal matters.[2] An organization, such as the Global Legal Blockchain Consortium (GLBC), work with enterprises, law firms, software development units, and schools to study the standards formulation and application methods of the application of blockchain technology to law-related matters. [3] This article will first discuss the legal enforceability of data generated by the blockchain technology through international cases, then review Taiwan’s current status and the legal enforceability of the data generated by the blockchain technology and to explore possible direction for regulatory adjustment if the government intends to ease the restriction on the application of blockchain in the fields of evidence authentication and deposition. II. International cases 1. US case: adjust the existing regulations and recognize the enforceability of blockchain technology The amendment HB2417[4] to the Arizona Electronic Transactions Act (AETA) signed by Arizona in April 2017 defines the blockchain technology and smart contracts and recognizes their legal effect on signatures, records and smart contracts. HB2417 defines “blockchain technology” as a “distributed, decentralized, shared and replicated ledger, which may be public or private, permissioned or permissionless, or driven by “tokenized crypto economics or tokenless” and provides that the “data on the ledger” is protected with cryptography, is immutable and auditable and provides an uncensored truth.” It’s worth noting that although, by definition, the data is true, it is uncensored truth in nature, which emphasizes the originality of the data. A “smart contract” is an “event driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger that can take custody over and instruct transfer of assets on that ledger.” Under the original AETA regulations, records or signatures in electronic form cannot be deprived of legal validity and enforceability merely because they are in electronic form. To eliminate the legal uncertainty of any blockchain related transactions and smart contracts related to digital assets, HB 2417 states that a signature that is secured through blockchain technology is considered to be in an electronic form and to be an electronic signature, and a record or contract that is secured through blockchain technology is considered to be in an electronic form and to be an electronic record. The statute also provides that smart contracts may exist in business, and a contract relating to a transaction may not be denied legal effect, validity or enforceability solely because that contract contains a “smart contract term.” This makes the enforceability of electronic signing and electronic transactions made by Arizona’s blockchain technology equivalent to that of the signature and contract made by the traditional written format. In the following year, the Ohio governor signed the amendment SB220[5] to the Uniform Electronic Transactions Act (UETA) in August 2018, which took effect from November. The focus of the amendment is the same as that in Arizona. Although, unlike HB 2417, SB220 does not define blockchain technology, the added content can still guarantee the enforceability of electronic signatures and contracts made by the blockchain technology. The focus of the two amendments in the US is to supplement and revise the laws and regulations made in the past so that they are applicable to the transaction method under blockchain technology and have the same effect as other recognized methods. This reduces the uncertainty related to blockchain technology at the regulatory and commercial application level, and is expected to attract the blockchain related companies, investors and developers. 2. Case of China: The enforceability of blockchain technology in evidence deposition is recognized in line with courts’ new type of judgment. In September 2018, the Supreme People's Court implemented “The Provisions on Several Issues Concerning the Trial of Cases by Internet Courts,”[6] in which Paragraph 2 of Article 11 mentions that where the authenticity of the electronic data submitted by a party can be proven through electronic signature, trusted time stamp, hash value check, blockchain or any other evidence collection, fixation or tamper-proofing technological means, or through the certification on an electronic evidence collection and preservation platform, the Internet court shall make a confirmation. It shows that the Internet court can recognize the evidence deposited by blockchain technology, and its enforceability is equivalent to that of other technologies if its authenticity can be proved. Paragraph 1 of the same article also proposes the basis for review and judgment on the relevant standards for the broad definition of electronic evidence recognition. “The authenticity of generation, collection, storage and transmission process of the electronic data shall be examined and judged, and the items to be reviewed include whether the hardware and software environments such as the computer system based on which electronic data is generated, collected, stored and transmitted are safe and reliable; whether electronic data originator and generation time are specified, and whether the contents shown are clear, objective and accurate; whether the storage and safekeeping media of electronic data are definite, and whether the safekeeping methods and means are appropriate; whether electronic data extractor and fixer, and electronic data extraction and fixation tools and methods are reliable, and whether the extraction process can be reproduced; whether the contents of electronic data are added, deleted, modified or incomplete, or fall under any other circumstance; and whether electronic data can be verified in specific methods.” The judgment is based on a clear review. It is a supplement to the notarization process, which was the solo judgment basis for the enforceability of digital evidence. In addition, the rules on proof are clearly set out in Article 9, which covers two situations: online and offline. For offline evidence, the parties can convert it into electronic materials by scanning, re-shooting and duplicating, and then upload it to the litigation platform. For online evidence, it can be divided into two situations. One is the online electronic evidence possessed by the party, which can be imported to the litigation platform by providing links or uploading materials. The other is that the Internet court can obtain the structural information of the relevant cases from the e-commerce platform operators, Internet service providers and electronic data deposition and retrieve platform, and import it to the litigation platform to directly provide the information to both parties so that they can select and prove their claims. In this way, the court can use technical means to complete the migration and visual presentation of information. Before the Supreme People's Court enforced the provisions, the Hangzhou Internet Court of China recognized the enforceability of electronic evidence under the blockchain technology when hearing a copyright dispute in June 2018. The court's judgment pointed out that after reviewing the impartiality, technical level and evidence preservation methods of the blockchain evidence deposit service provider, the enforceability of the evidence is recognized, and thus the case was deemed infringement.[7] Beijing Dongcheng District Court also reviewed the blockchain deposition technology in an infringement of information network communication in September of the same year, including data generation, deposition, preservation, and recognized the enforceability of electronic evidence made by the blockchain technology. The court adopted the electronic evidence[8]. The Beijing Internet Court allows evidence deposition of the litigation files and evidence uploaded to the electronic litigation platform through the Balance Chain of evidence deposition established by the blockchain technology when handling the litigation cases online. This can prevent tampering and ensure the safety of litigation while keeping possible litigation evidence to facilitate verification in the future. While the Balance Chain is going online, the supporting standards, including the Beijing Internet Court Electronic Evidence Platform Access and Management Standards, the Enforcement Rules of the Beijing Internet Court Electronic Evidence Platform Access and Management Standards, the Application Form for Beijing Internet Court Electronic Evidence Deposition Access and the Instruction on the Beijing Internet Court Electronic Evidence Deposition Access Interface, are released simultaneously. These supporting standards prescribe the requirement of receivers, the requirement for the electronic information system of the receiver and the requirement for the juridical application of the evidence platform in details from the practical point of view so that the potential receivers can interconnect in a compliant manner while ensuring the quality of the connected data. III. Taiwan’s current situation In the above cases, the United States amended the laws and regulations related to the electronic transaction by increasing the scope of the terms, such as electronic forms of records, signatures and transactions so that the records, signatures and transactions made by the blockchain technology is as effective as that of other technologies. According to Article 9 of the Taiwanese Electronic Signatures Act, the enforceability of the data generated by blockchain technology shall still be judged case by case in terms of the technology for electronic documents, signature and transaction formation, and its applicability or exclusion shall be determined by laws or administrative agencies. In China, the role of electronic data is discussed in the relevant standards used by the Internet Court to examine the cases. Regarding the definition of electronic materials, electronic records and electronic documents, Paragraph 1 of Article 2 of the Taiwanese Electronic Signatures Act defines electronic document as a record in electronic form, which is made of “any text, sound, picture, image, symbol, or other information generated by electronic or other means not directly recognizable by human perceptions, and which is capable of conveying its intended information.”[9] In addition, Article 4 states “With the consent of the other party, an electronic record can be employed as a declaration of intent. Where a law or regulation requires that information be provided in writing, if the content of the information can be presented in its integrity and remains accessible for subsequent reference, with the consent of the other party, the requirement is satisfied by providing an electronic record. By stipulation of a law or regulation or prescription of a government agencies, the application of the two preceding paragraphs may be exempted, or otherwise require that particular technology or procedure be followed. In the event that particular technology or procedure is required, the stipulation or prescription shall be fair and reasonable, and shall not provide preferential treatment without proper justifications.” [10] The electronic records, regardless of the type of technology, are given the same effect as paper documents with the consent of both parties. In litigation, electronic records, electronic evidence or similar terms are not found in the Criminal Code of the Republic of China, the Civil Code, the Code of Criminal Procedure and the Taiwan Code of Civil Procedure. The adoption of electronic records often refers to Paragraph 2 of Article 220 of the Criminal Code of the Republic of China[11]. An audio recording, a visual recording, or an electromagnetic recording and the voices, images or symbols that are shown through the computer process and are sufficient evidence of intention shall be considered a document. The content that is considered meaningful is that the identity of the person expressing the content is identifiable according to the content and can be used to prove legal relationship or fact in social life. The relevant standards for proof under the electronic evidence follow Article 363 of the Taiwan Code of Civil Procedure[12]. For non-documentary objects which operate as documents, including those are accessible only through technological devices or those that are practically difficult to produce their original version, a writing representing its content along with a proof of the content represented as being true to the original will be acceptable. However, the way of proof or recognition standards are not sufficiently described. Or according to Paragraph 2 of Article 159-4 of the Code of Criminal Procedure, “documents of recording nature, or documents of certifying nature made by a person in the course of performing professional duty or regular day to day business, unless circumstances exist making it obviously unreliable. In addition”, and Paragraph 3 “ Documents made in other reliable circumstances in addition to the special circumstances specified in the preceding two Items.” [13] In fact, the Juridical Yuan started to promote the electronic litigation platform (including online litigation) in 2016, and has launched the online litigation business by gradually opening the application for different types of applicants and litigation.[14] However, there is no description on the technical type and inspection standards of electronic evidence. Moreover, only the litigation evidence is uploaded. There is no evidence deposition before litigation for comparison during litigation. Under Taiwan’s laws and regulations, electronic evidence and its proving method is not significantly different from other types of evidence. The judgment of evidence shall still depend on judges’ recognition on the evidence. Taking the practice of criminal litigation as an example, it can be viewed at three levels[15]: 1. The submission of the evidence. If the evidence is collected illegally, not following a statutory method or is not logically related to the pending matters, it will be excluded. This is the way to determine whether the evidence is eligible to enter the evidence investigation process. 2. In the investigation of evidence, the method of investigation (e.g., whether it is legal), the determination of relevance and the debate on evidence (e.g., to confirm the identity of the person producing the electronic evidence, whether the electronic evidence is identical to the original version without addition, deletion or alteration) are investigated during the investigation procedure. 3. The debate on evidence is to determine the power of the evidence by considering the relationship among the elements that constitute the whole and whether the evidence can prove the connection among all elements. In addition, whether the electronic evidence is consistent with the original version is often based on Article 80 of the Notary Act, "When making notarial deeds, notaries shall write down the statements listened to, the circumstances witnessed, and other facts they have actually experienced. The means and results of the experience shall also be stated in the notarial deeds.” [16] A notary shall review the electronic evidence and record the inspection process and the inspection results to demonstrate its credibility. VI. Conclusions and recommendations According to the latest 2050 smart government plan[17] announced in the Executive Yuan’s 3632nd meeting held on December 27, 2018, the government is planning to connect the database of each government agency through blockchain technology, and the plan also includes establishment of digital identification. It is foreseeable that there will be more and more electronic materials, documents and records connected by blockchain technology in the future. When it comes to improve management efficiency and reduce the barriers to introduce this technology to various sectors, it is necessary to adjust the related regulations. At present, there are no statutory provisions for the technology that assist the use of the electronic evidence involved in traditional litigation channels or online platforms, including using blockchain for evidence deposition and authentication . This also poses uncertainty to the judges when they make judgments. If we consider the continuous development and breakthrough of technology, which is relatively faster than the legislative process, and the traditional tangible transactions and contracts are still the majority in life, Taiwan has defined electronic materials, electronic records and electronic documents in the Electronic Signatures Act to ensure and strengthen the legal rights and benefits under the adoption of the technology. In addition, the Electronic Signatures Act also reserves the right to determine whether the technology is applicable to the laws and regulations or administrative agencies. In other words, the technology behind electronic materials, records and documents are not specified, and the aforementioned electronic materials have the same effect as the contracts and signature as the traditional written format. However, there are no standards to specify which standards are valid for evidence deposition and authentication for electronic materials on the level of deposition and authentication. In the future, when improving the relevant functions of the online litigation platform, the Juridical Yuan can also consider using technologies, such as blockchain or timestamps to provide evidence deposition service, which is expected to enhance the efficiency of evidence verification for online litigation in the future and prevent wasting review resources on invalid evidence for a better operation mode. This is in line with the government's policy direction. By providing support and demonstration of emerging technologies, not only limited to blockchain, on the legal level, it can reduce the public’s uncertainty and risk on introducing or applying the technology to legal process. This is very helpful in realizing a large scale application of the technology. [1] Legal Services Innovation Index, Phase 1, Version 1.0, https://www.legaltechinnovation.com/law-firm-index/ (last visited on Jan. 11, 2019). [2] For example, Arizona's Arizona Electronic Transactions Act (AETA) and Ohio’s Uniform Electronic Transactions Act (UETA) described the electronic signature and the enforceability of contracts under blockchain technology; in China, Beijing Internet Court provides litigation files and litigation evidence deposition service based on blockchain technology for future litigation. [3] The Global Legal Blockchain Consortium website, https://legalconsortium.org/ (last visited on Jan. 11, 2019). [4] H.B. 2417, 53th Leg., 1st Regular. (AZ. 2017). [5] S.B. 220, 132ND General Assembly. (OH. 2017-2018). [6]“The Provisions on Several Issues Concerning the Trial of Cases by Internet Courts,” the Supreme People's Court of the People’s Republic of China http://www.court.gov.cn/zixun-xiangqing-116981.html (last visited on Jan. 11, 2019). [7] Tencent Research Institute, <The era of judicial blockchain has arrived? ——from the two cases of blockchain electronic deposition>, October 23, 2018, https://ek21.com/news/1/132154/ (last visited on Jan. 11, 2019). [8] Securities Daily, <Beijing Dongcheng District Court confirmed the evidence collection by blockchain for the first time-- application of "blockchain + justice" for new opportunities in history> October 20, 2018, https://www.jinse.com/bitcoin/258170.html (last visited on Jan. 11, 2019). [9] Paragraph 1 of Article 2 of the Electronic Signatures Act [10] Article 4 of the Electronic Signatures Act [11] Paragraph 2 of Article 220, “A writing, symbol, drawing, photograph on a piece of paper or an article which by custom or by special agreement is sufficient evidence of intention therein contained shall be considered a document within the meaning of this Chapter and other chapters. So shall be an audio recording, a visual recording, or an electromagnetic recording and the voices, images or symbols that are shown through computer process and are sufficient evidence of intention.” [12] Article 363 of the Taiwan Code of Civil Procedure, “The provisions of this Item shall apply mutatis mutandis to non-documentary objects which operate as documents. Where the content of a document or an object provided in the preceding paragraph is accessible only through technological devices or it is practically difficult to produce its original version, a writing representing its content along with a proof of the content represented as being true to the original will be acceptable. The court may, if necessary, order an explanation of the document, object, or writing representing the content thereof provided in the two preceding paragraphs.” [13] Paragraph 2 of Article 159-4 of the Code of Criminal Procedure [14] Liberty Times, <The Juridical Yuan is promoting “E-litigation.” Two new systems are on the road.” August 1, 2018, http://news.ltn.com.tw/news/society/breakingnews/2506118 (last visited on Jan. 11, 2019). [15] Chih-Lung Chen, “Seminar on the Reform of the Code of Criminal Procedure 3: Revision Direction of Rule of Evidence,” The Taiwan Law Review, Issue 52, Page 71-73 (1999). [16] Article 80 of the Notary Act. [17] BlockTempo, <The Executive Yuan Announced the Smart Government New Plan: the Taiwan Government will Use Blockchain Technology to Establish Information Exchange Mechanism of Various Agencies>, January 2, 2019, https://www.blocktempo.Com/taiwan-gv-want-to-use-blockchain-tech-build-data/ (last visited on Jan. 11, 2019).
Introduction to Essential Data Governance and Management System(EDGS)Introduction to Essential Data Governance and Management System(EDGS) 2022/12/30 I. Background Along with organizations face the industrial, social and economic level of Digital Transformation trend brought by the development of emerging technology or the occurrences of disasters or emergencies(such as COVID-19), and so on. Inducing the increasing demand for transformation of digital governance and management. Including the board of directors and the top managements’ decision making, supervision to internal audit, internal control etc. It is necessary to establish and implement the digitized management measure of content or process step by step. Strengthening the reality, integrity and full disclosure of data, in order to improve the efficiency of organizational decision making, execution, supervision and management. Although implementing the digitization process, brings convenience and efficacy to the organization, accompanied by risks. Digital data has characters of being easy to modify and spread. This often results in difficulty for the original version owner in proving the originator’s identity and then impacts rights protect. Additionally, when cooperating with others, the organizations may provide essential digital data to others, or receive others’ essential digital data. When data breaches or controversies occur, it is required to have measures assisting in the identification or prove the origin of the data. In order to delineate the responsibilities and enhance mutual trust. Essential Data Governance and Management System(hereinafter referred to as, EDGS) is a management model which is to be introduced at the discretion of each organization. Looking forward to improve the degree of the ability in organizations’ digital and governance level progressively. Starting to improve the protected process of the digital data in the first place, reinforcing the long-term preservation of validity of the essential digital data. In order to guarantee the evidence capacity and reinforce the probative value by the time litigations has been instituted or the related competent authority investigates. II. Setting Objectives The purpose of EDGS is to help organizations consolidate with existing internal auditing, internal control or other management process and then implement tweaks that establish an organizations’ essential data governance and management system that meets the requirements of EDGS. In order to attain the following benefits(as shown in Figure 1 below): a. Improve the digitalization level of governance and management in internal control, internal auditing or surveillance. b. Improve organizations’ cooperation, trust and the chance of digital transformation. c. Reinforce organizations to identify and manage the self-generated, provided or received external digital data. d. Reinforce organizations’ validity of evidence presented in litigation or the inspection certification of competent authority. Figure 1: Setting Objectives of EDGS III. Scope of Application EDGS is designed to be applicable to all organizations, regardless of their type, size, and the products or services they provide. In addition, the requirement of EDGS are centered on the organizations’ essential data governance and management system process (as shown in Figure 2 below). The so-called organizations’ essential data governance and management system process refers to from the digital data process of generation, protection and maintenance to the digital evidence preservation information process of acquisition, maintenance and verification by setting management objectives in accordance with the management policies established by the organization. Figure 2: The Conceptual Flow Chart for the Organizations’ Essential Digital Data Governance and Management System Process IV. Process of Application EDGS encourages organizations to link and reinforce the existing “process management” approach and “PDCA management” cycle(as shown in Figure 3 below) in developing, implementing and improving their essential data governance and management system. Figure 3: The “PDCA management” Cycle of EDGS V. Table of Contents Chapters 0 to 4 of EDGS are the description of the system structure, scope of application, definition of terms and consideration factors; Chapters 5 to 10 are important management items. 0. Introduction 0.1. General Description 0.2. Target 0.3. Process Management 0.4. Management Cycle 0.5. Setting Objectives 0.6. Compatibility with other management systems 1. Scope of Application 2. Version Marking 3. Definition of Terms 3.1 Organization 3.2 Digital record 3.3 Identification Technology 3.4 Metadata 3.5 Hash Function 3.6 Hash Value 3.7 Time-Stamp 4. Organization Environment 4.1 Internal and External Issues 4.2 Stakeholders 5. Management Responsibility of Digital Governance and Management 5.1 Management Commitment 5.2 Management Policy 5.3 Management Objective Planning 5.4 Management Accountability and Communication 6. System Planning 6.1 Basic Requirements 6.2 Response to Risks and Opportunities 6.3 Change Planning 7. Support 7.1 Resources 7.2 Personnel 7.3 Equipment or System Environment 7.4 Communication Channels 8. Practice Process of Essential Digital Data Governance and Management 8.1 Generation, Maintenance and Protection of Digital Data 8.2 Acquisition, Maintenance and Verification of Digital Evidence Preservation Information 9 Performance Evaluation 9.1 Basic Requirements 9.2 Data Analysis 9.3 Internal Audit 9.4 Management Review 10 Improvement For the full text of the EDGS(Chinese Version), please refer to： https://stli.iii.org.tw/publish-detail.aspx?d=7198&no=58
Recent Federal Decisions and Emerging Trends in U.S. Defend Trade Secrets Act LitigationI. Introduction The enactment of the Defend Trade Secrets Act of 2016[1] (the “DTSA”) marks a milestone in the recent development of trade secret law in the United States (“U.S.”).[2] Recent federal decisions and emerging trends in DTSA litigation regarding the following issues deserve the attention of Taiwanese companies who might be involved in DTSA litigation in U.S. federal courts (“federal courts”): (1) whether the DTSA displaces any other civil remedies provided by the existing trade secret laws; (2) whether a plaintiff should pay attention to any pleading standard when bringing a DTSA claim in federal court; (3) whether a federal court will easily grant an ex parte application for seizure order under the DTSA (an “ex parte seizure order”); and (4) whether the DTSA applies to trade secret misappropriations that occurred before the DTSA came into effect. This article provides insights into these developments and trends, and concludes with their implications at the end. II. The DTSA does not displace any other civil remedies provided by the existing trade secret laws, and federal courts may nonetheless turn to pre-DTSA laws and decisions for guidance The DTSA states that it does not “preempt” or “displace” any other civil remedies provided by other federal and state laws for trade secret misappropriation.[3] Prior to the enactment of the DTSA, the civil protection and remedies of trade secrets in the U.S. have traditionally been provided under state laws.[4] The DTSA provides federal courts with original jurisdiction[5] over civil actions brought under the DTSA, giving trade secret owners an option to litigate trade secret claims in federal courts.[6] As a result, the DTSA adds a layer of protection for trade secrets and creates a federal path for plaintiffs to pursue civil remedies.[7] Some commentators point out that federal courts, when hearing DTSA claims, construing DTSA provisions or analyzing DTSA claims, oftentimes turn to state laws and decisions existing prior to the enactment of the DTSA for guidance.[8] Various decisions show that federal courts tend to look to local state laws and pre-DTSA decisions when hearing DTSA claims or making decisions.[9] This suggests that pre-DTSA trade secret laws and prior decisions remain an indispensable reference for federal courts. III. A plaintiff should pay careful attention to the plausibility pleading standard when bringing a DTSA claim in federal court A plaintiff's pleading in his complaint must satisfy the plausibility pleading standard when the plaintiff brings a DTSA claim in federal court.[10] Otherwise, the plaintiff's complaint may be dismissed by the federal court.[11] Filing a motion requesting dismissal of the plaintiff's complaint[12] on the grounds of the plaintiff's failure of stating plausible claims for relief is thus a defense that a defendant may employ to defeat the plaintiff's claim in the early stage.[13] The DTSA opens the door of federal courts to trade secret plaintiffs to pursue civil remedies,[14] but the DTSA does not “guarantee unfettered access to the federal courts.”[15] When filing a DTSA lawsuit in federal court, a plaintiff must state “the grounds for the court's jurisdiction,” the plaintiff's claims (entitlement to relief), and the plaintiff's “demand for the relief sought” in his complaint.[16] The claim and statement pled by the plaintiff in his complaint must meet the “plausibility” threshold.[17] In other words, at the pleading stage, a plaintiff should plead facts sufficiently demonstrating that all prerequisites of his claim (e.g., jurisdiction and venue,[18] elements of a claim required by the DTSA,[19] etc.) are satisfied when bringing a DTSA claim in federal court.[20] For instance, in addition to claiming the existence of his trade secret, a plaintiff should state how his trade secret was misappropriated through improper means.[21] However, in the context of trade secrets, the plausibility pleading standard can be challenging to a plaintiff because it is never easy to balance between “satisfying the required pleading standard” and “avoiding disclosing too much information about the trade secret in a pleading.”[22] Let's take pleading the existence of a trade secret as an example. Under the plausibility pleading regime, a plaintiff is required to plead all relevant facts of trade secret (elements)[23] defined by the DTSA to affirmatively prove the existence of his trade secret.[24] In other words, a plaintiff needs to state sufficient facts indicating that the information in dispute has economic value while not being known to the public, and reasonable steps have been taken to maintain the secrecy of that information,[25] all of which plausibly suggest that the information in dispute qualifies as a trade secret.[26] Federal courts do not require a plaintiff to disclose his trade secret in detail in his complaint.[27] Nevertheless, a plaintiff should be able to provide the “general contour” of the alleged trade secret that he seeks to protect.[28] Federal courts would be reluctant to see that a plaintiff, merely “identify[ing] a kind of technology” or “point[ing] to broad areas of technology,” or barely asserting that the misappropriated information is confidential, then “invit[ing] the court to hunt through the details in search of items meeting the statutory definition.”[29] Instead of simply alleging that the subject matter at issue involves a trade secret, a plaintiff's complaint should contain descriptions identifying the plaintiff's trade secret.[30] For instance, in his pleading, a plaintiff has to tell what information is involved and what efforts have been made to maintain the confidentiality of such information.[31] For further example, a plaintiff should provide documents or information constituting the alleged trade secret rather than merely listing general topics or categories of information.[32] IV. Obtaining a DTSA ex parte seizure order is challenging as federal courts tend to take a conservative approach to prevent abuse of this ex parte seizure remedy Since the DTSA came into effect, federal courts rarely grant an ex parte application for seizure order under the DTSA.[33] The provision for ex parte seizure orders is a controversial part of the DTSA[34] as it allows a court, upon ex parte application and if all DTSA requirements are met, to issue a civil order “for the seizure of property necessary to prevent the propagation or dissemination of the trade secret.”[35] So far federal courts have been hesitant to order DTSA ex parte seizures and are giving great deference to the statutory text of the DTSA seizure order provision.[36] Only when a federal court finds it “clearly appears from specific facts” that certain requirements are met[37] and only in “extraordinary circumstances”[38] may a federal court issue an ex parte seizure order.[39] When being confronted with an ex parte application for seizure order under the DTSA, federal courts tend to favor a conservative approach to prevent the abuse of this ex parte seizure remedy.[40] If any alternative equitable relief is available to achieve the same purpose, federal courts will likely find it unnecessary to issue an ex parte seizure order.[41] In addition, a plaintiff's mere assertion that the defendant, if given notice, would destroy evidence or evade a court order, but without showing that the defendant “had concealed evidence or disregarded court orders in the past,” will likely be insufficient to persuade the court to issue an ex parte seizure order.[42] Furthermore, federal courts will decline to order an ex parte seizure if a plaintiff fails to meet his burden demonstrating that the information in dispute constitutes a trade secret.[43] All of the foregoing suggests that one will likely face an uphill struggle in federal court when seeking to obtain an ex parte seizure order under the DTSA.[44] Though federal courts sparingly order DTSA ex parte seizures, to date at least one federal court did issue a published DTSA ex parte seizure order, which appeared in Mission Capital Advisors, LLC v. Romaka.[45] In Romaka, the defendant allegedly downloaded the plaintiff's client and contact lists to the defendant's personal computer without the plaintiff's authorization; the plaintiff filed an ex parte motion seeking to seize some properties containing the plaintiff's trade secrets or enjoin the defendant from disclosing that information.[46] During the trial, the defendant neither acknowledged receipt of the court's prior orders[47] nor appeared before the court as ordered,[48] all of which together with other facts in Romaka convinced the court that other forms of equitable relief would be inadequate and the defendant would likely evade or otherwise disobey the court order.[49] After reviewing the facts of this case along with DTSA requirements item by item, the Romaka court found it clearly appears from specific facts that all requirements for an ex parte seizure order under the DTSA are met,[50] and thus, issued a said seizure order as requested by the plaintiff.[51] Romaka gives us some hints about what circumstances would cause a federal court to order a DTSA ex parte seizure.[52] This case tells us that evading or disregarding court-mandated actions is likely demonstrating to the court a propensity to disobey a future court order and may probably increase the likelihood of meriting a DTSA ex parte seizure order.[53] Moreover, echoing other decisions rendered by federal courts, Romaka reveals that federal courts tend to approach ex parte seizure order applications in a gingerly way.[54] Federal courts take a conservative approach toward ex parte seizure order to curtail abuse of such order[55] does not mean that no injunctive relief is available to victims of trade secret misappropriation. Injunctive relief provided by other federal laws or state laws[56] is nonetheless available to those victims.[57] As long as the facts of the case before the court meet all elements required for injunctive relief, it is not rare for federal courts to grant injunctive relief other than an ex parte seizure order.[58] V. The DTSA might apply to a pre-DTSA trade secret misappropriation that continues after the DTSA became effective The DTSA expressly states that it applies to any trade secret misappropriation that “occurs on or after the date of the enactment” of the DTSA.[59] Therefore, the DTSA does not apply to trade secret misappropriations that began and ended before the effective date of DTSA.[60] In practice, it is possible that a federal court will dismiss a plaintiff's DTSA claim if the plaintiff fails to state that the alleged trade secret misappropriations (either in whole or in part) took place after the DTSA came into effect.[61] Federal courts have begun addressing or recognizing that the DTSA might apply to trade secret misappropriations that occurred prior to and continued after the enactment date of the DTSA.[62] However, a plaintiff should “plausibly” and “sufficiently” plead in his claim that some parts of the alleged continuing misappropriation of trade secrets occurred after the DTSA became effective.[63] Some critics opine that, in the case of a continuing trade secret misappropriation that took place before and continued after the DTSA was enacted, the available recovery shall be limited to “post-DTSA misappropriation.”[64] By being mindful of the foregoing, maybe someday a plaintiff will bring a DTSA claim for a pre-DTSA misappropriation of trade secrets that continues after the DTSA is in effect.[65] In this kind of litigation, one should pay attention to whether the plaintiff has plausibly and sufficiently alleged the part of misappropriation that occurred after the enactment date of the DTSA.[66] When a plaintiff fails to plausibly and sufficiently alleges the post-DTSA misappropriation part, the defendant stands a chance to convince the court to dismiss the plaintiff's claim.[67] VI. Conclusion To sum up, recent federal decisions and emerging trends in DTSA litigation provide the following implications to Taiwanese companies who might be involved in DTSA litigation in federal court: 1. The DTSA does not preempt or displace any other civil remedies provided by other federal laws and state laws.[68] Rather, the DTSA adds a layer of protection for trade secrets and creates a federal path for plaintiffs to pursue civil remedies.[69] Federal courts tend to turn to local state laws and pre-DTSA decisions for guidance when hearing DTSA claims or making decisions.[70] Do not ignore pre-DTSA trade secret laws or prior decisions as they remain an indispensable reference for federal court. 2. A plaintiff's pleading must satisfy the plausibility pleading standard when the plaintiff brings a DTSA claim in federal court.[71] Whether the plaintiff's pleading satisfies the plausibility pleading standard is likely one of the hard-fought battles between the parties in the early stage of the litigation. The plausibility pleading regime does not require a plaintiff to disclose his trade secrets in detail in his complaint.[72] However, a plaintiff should be able to describe and identify his trade secrets.[73] 3. Seeking to secure a DTSA ex parte seizure order in federal court will likely face an uphill battle.[74] Obtaining alternative injunctive relief would be easier than obtaining a DTSA ex parte seizure. When being confronted with an ex parte application for seizure order under the DTSA, federal courts tend to favor a conservative approach to prevent the abuse of this ex parte seizure remedy.[75] Notwithstanding the foregoing, as long as the facts of the case before the court meet all elements required for injunctive relief, it is not rare for federal courts to grant injunctive relief other than an ex parte seizure order.[76] 4. The DTSA might apply to trade secret misappropriations that occurred prior to and continued after the enactment date of the DTSA.[77] When a DTSA litigation involves this kind of continuing misappropriation, one of those hard-fought battles between the parties during litigation will likely be whether the plaintiff has plausibly and sufficiently stated the part of misappropriation that occurred after the DTSA came into effect.[78] When a plaintiff fails to plausibly and sufficiently alleges the post-DTSA misappropriation part, the defendant stands a chance to convince the court to dismiss the plaintiff's claim.[79] [1] The Defend Trade Secrets Act of 2016, Pub. L. No. 114-153, 130 Stat. 376 (May 11, 2016) (mostly codified in scattered sections of 18 U.S.C. §§1836-1839 [hereinafter the “DTSA”]. [2] Mark L. Krotoski, Greta L. Burkholder, Jenny Harrison & Corey R. Houmand, The Landmark Defend Trade Secrets Act of 2016, at 3 (May 2016); Bradford K. Newman, Jessica Mendelson & MiRi Song, The Defend Trade Secret Act: One Year Later, 2017-Apr Bus. L. Today 1, 1 (2017). [3] 18 U.S.C. §1838. [4] S. Rep. No. 114-220, at 2 (2016) [hereinafter “S. Rep.”]; Kaylee Beauchamp, The Failures of Federalizing Trade Secrets: Why the Defend Trade Secrets Act of 2016 Should Preempt State Law, 86 Miss. L.J. 1031, 1033, 1045 (2017); Zoe Argento, Killing the Golden Goose: The Dangers of Strengthening Domestic Trade Secret Rights in Response to Cyber-Misappropriation, 16 Yale J. L. & Tech. 172, 177 (2014); James Pooley, The Myth of the Trade Secret Troll: Why the Defend Trade Secrets Act Improves the Protection of Commercial Information, 23 Geo. Mason L. Rev. 1045, 1045 (2016); John Conley, New Federal Trade Secret Act and Its Impact on Life Sciences, Genomics L. Rep. (Aug. 12, 2016), https://www.genomicslawreport.com/index.php/2016/08/12/new-federal-trade-secret-act-and-its-impact-on-life-sciences/; Newman, Mendelson & Song, supra note 2, at 1. [5] 18 U.S.C. §1836(c). [6] Krotoski, Burkholder, Harrison & Houmand, supra note 2, at 7; Beauchamp, supra note 4, at 1033, 1045, 1072; Lily Li & Andrea W. Paris, Help! What Are My (Immediate) Defenses to a Federal Trade Secret Claim?, 58-Sep Orange County Law. 52, 52 (2016); Newman, Mendelson & Song, supra note 2, at 1. [7] Conley, supra note 4. [8] William M. Hensley, Post-Enactment Case Law Developments under the Defend Trade Secrets Act, 59-Jul Orange County Law. 42, 44 (2017); Robert B. Milligan & Daniel Joshua Salinas, Emerging Issues In the Defend Trade Secrets Act's Second Year, Seyfarth Shaw LLP: Trading Secrets (June 14, 2017), https://www.tradesecretslaw.com/2017/06/articles/dtsa/emerging-issues-in-the-defend-trade-secrets-acts-second-year/; Jeffrey S. Boxer, John M. Griem, Jr., Alexander G. Malyshev & Dylan L. Ruffi, The Defend Trade Secrets Act – 2016 In Review, Carter Ledyard & Milburn LLP (Jan. 19, 2017), http://www.clm.com/publication.cfm?ID=5579; Rajiv Dharnidharka, Andrew D. Day & Deborah E. McCrimmon, The Defend Trade Secrets Act One Year In – Four Things We've Learned, DLA Piper (May 30, 2017), https://www.dlapiper.com/en/us/insights/publications/2017/05/defend-trade-secrets-act-four-things-learned/; Joshua R. Rich, The DTSA After One Year: Has the Federal Trade Secrets Law Met Expectations?, McDonnell Boehnen Hulbert & Berghoff LLP, Vol. 15 Issue 3 Snippets 6, 7 (Summer 2017). [9] HealthBanc International, LLC v. Synergy Worldwide, 208 F.Supp.3d 1193, 1201 (D.Utah 2016); Phyllis Schlafly Revocable Trust v. Cori, No. 4:16CV01631 JAR, 2016 WL 6611133, at *2-5 (E.D. Mo. Nov. 9, 2016); Panera, LLC v. Nettles, No. 4:16-cv-1181-JAR, 2016 WL 4124114, at *4 fn.2 (E.D. Mo. Aug. 3, 2016); Henry Schein, Inc. v. Cook, 191 F.Supp.3d 1072, 1077, 1079-1080 (N.D.Cal. 2016); Engility Corp. v. Daniels, No. 16-cv-2473-WJM-MEH, 2016 WL 7034976, at *8-10 (D. Colo. Dec. 2, 2016); M.C. Dean, Inc. v. City of Miami Beach, Florida, 199 F. Supp. 3d 1349, 1353-1357 (S.D. Fla. 2016); GTO Access Systems, LLC v. Ghost Controls, LLC, No. 4:16cv355-WS/CAS, 2016 WL 4059706, at *1 fn.1, *2-4 (N.D. Fla. June 20, 2016); Earthbound Corp. v. MiTek USA, Inc., No. C16-1150 RSM, 2016 WL 4418013, at *9-10 (W.D. Wash. Aug. 19, 2016); Kuryakyn Holdings, LLC v. Ciro, LLC, 242 F.Supp.3d 789, 797-800 (W.D. Wisc. 2017). [10] Michelle Evans, Plausibility under the Defend Trade Secrets Act, 16 J. Marshall Rev. Intell. Prop. L. 188, 190 (2017); Eric J. Fues, Maximilienne Giannelli & Jon T. Self, Practice Tips for the Trade Secret Holder: Preparing a Complaint Under the Defend Trade Secrets Act, Inside Counsel (June 14, 2017), https://www.finnegan.com/en/insights/practice-tips-for-the-trade-secret-holder-preparing-a-complaint.html; David R. Fertig & Michael A. Betts, The Defend Trade Secrets Act: Jurisdictional Considerations—Part I, 29 No. 7 Intell. Prop. & Tech. L.J. 3, 3-5 (2017) [hereinafter “Considerations—Part I”]. [11] M.C. Dean, 199 F. Supp. 3d at 1357; Chatterplug, Inc. v. Digital Intent, LLC, No. 1:16-cv-4056, 2016 WL 6395409, at *3 (N.D. Ill. Oct. 28, 2016); Raben Tire Co. v. McFarland, No. 5:16-CV-00141-TBR, 2017 WL 741569, at *2-3 (W.D. Ky. Feb. 24, 2017). [12] Fed. R. Civ. P. 12(b). [13] Jessica Engler, The Defend Trade Secrets Act at Year One, 12 No. 4 In-House Def. Q. 20, 22 (2017). [14] Conley, supra note 4. [15] Fertig & Betts, Considerations—Part I, supra note 10, at 3. [16] Pleading the grounds for the court's jurisdiction, the plaintiff's claim (entitlement to relief), and the plaintiff's demand for the relief sought are requirements for the pleading under Article 8 of the Federal Rules of Civil Procedure (the “FRCP”). Fed. R. Civ. P. 8(a). The FRCP applies to “all civil actions and proceedings in the United States district courts.” Fed. R. Civ. P. 1. Thus, the FRCP requirements also apply to DTSA civil actions brought in federal courts. Evans, supra note 10, at 190; Fues, Giannelli & Self, supra note 10; Fertig & Betts, Considerations—Part I, supra note 10, at 3-4. [17] In Bell Atlantic Corporation v. Twombly, the U.S. Supreme Court interpreted Article 8(a) of the FRCP, introduced the concept of “plausibility pleading,” and established the plausibility pleading standard. Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 547, 570 (2007). Under the plausibility pleading standard, a plaintiff is not required to provide “detailed factual allegations” in his complaint, but he needs to state the grounds of his claim (entitlement to relief), which should be “more than labels and conclusions.” Id. at 555, 570. At least, the plaintiff's complaint should contain enough facts showing that the plaintiff's claim is “plausible on its face.” Id. Two years after Twombly, in Ashcroft v. Iqbal the U.S. Supreme Court expressly affirmed that the plausibility pleading standard established in Twombly applies to “all civil actions.” Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009). Accordingly, the plausibility pleading standard applies to all DTSA claims brought in federal courts. Evans, supra note 10, at 190; Fues, Giannelli & Self, supra note 10; Fertig & Betts, Considerations—Part I, supra note 10, at 3-5. It is worth mentioning that some commentators are of the opinion that federal pleading stands are often higher than those required under state laws. Boxer, Griem, Jr., Malyshev & Ruffi, supra note 8. [18] Gold Medal Prods. Co. v. Bell Flavors & Fragrances, Inc., No. 1:16-CV-00365, 2017 WL 1365798, at *5-8 (S.D. Ohio, Apr. 14, 2017). See also Fertig & Betts, Considerations—Part I, supra note 10, at 4; David R. Fertig & Michael A. Betts, The Defend Trade Secrets Act: Jurisdictional Considerations—Part II, 29 No. 8 Intell. Prop. & Tech. L.J. 12, 12 (2017) [hereinafter “Considerations—Part II”]. [19] McFarland, 2017 WL 741569, at *2-3; M.C. Dean, 199 F. Supp. 3d at 1357; Digital Intent, 2016 WL 6395409, at *3. See also Fertig & Betts, Considerations—Part I, supra note 10, at 3-5. [20] Fues, Giannelli & Self, supra note 10; Fertig & Betts, Considerations—Part I, supra note 10, at 5; Fertig & Betts, Considerations—Part II, supra note 18, at 13-14. [21] Boxer, Griem, Jr., Malyshev & Ruffi, supra note 8. [22] Id. [23] 18 U.S.C. §1839(3). [24] McFarland, 2017 WL 741569, at *2. [25] Fues, Giannelli & Self, supra note 10. [26] Engler, supra note 13, at 21-22. Providing help in identifying the trade secret in question by requesting as much detail as possible is a common point shared by the plausibility pleading standard in the U.S., and the “Case Detail Explanation Form” (to be filled out by the complainant or the victim) attached to Article 6 of the “Guideline for Handling Major Trade Secret Cases in the Prosecuting Authority” in Taiwan. However, they apply to different circumstances: 1. The plausibility pleading standard in the U.S. sets forth the threshold requirements to be met by a plaintiff in his pleading when the plaintiff brings a civil claim in federal court and applies to all federal civil actions. On the other hand, the aforementioned Case Detail Explanation Form in Taiwan is a form to be filled out by the complainant or the complainant's agent. This Form provides a reference to prosecutors for the investigation of major trade secret cases (criminal cases), but it does not serve as the basis for a prosecutor to determine whether to prosecute a case. 2. The plausibility pleading standard is not only followed by those bringing a federal civil action but also adopted by federal courts when hearing civil cases. Contrarily, the aforementioned Case Detail Explanation Form in Taiwan is provided to prosecutors as a reference for investigation. A prosecutor is not bound to prosecute a case simply based on the information provided in this Form. Likewise, this Form and the information provided therein are not binding on any court in Taiwan. A commentator noted that the Ministry of Justice in Taiwan referred to the “Prosecuting Intellectual Property Crimes (Manual)” of the U.S. Department of Justice when adopting the “Guideline for Handling Major Trade Secret Cases in the Prosecuting Authority” on April 19, 2016. “Article 6 indicates that the complainant or the victim should first fill out the Case Detail Explanation Form, which would help the prosecution authority not only figures out whether the allegedly misappropriated trade secret meets the elements of secrecy, economic value, and secrecy measures under law, but also evaluates whether it is necessary to resort to compulsive measures”. Ti-Chu Chen (陳砥柱), Guideline for Handling Major Trade Secret Cases in the Prosecuting Authority, Louis & Charles Attorneys at Law (遠東萬佳法律事務所) (July 14, 2016), http://www.louisilf.com/zh-tw/posts/2016-07-14 (last visited Dec. 31, 2017). See also Prosecuting Intellectual Property Crimes (Manual) (4th ed. 2013), available at: https://www.justice.gov/sites/default/files/criminal-ccips/legacy/2015/03/26/prosecuting_ip_crimes_manual_2013.pdf. However, the cover of the “Prosecuting Intellectual Property Crimes (Manual)” expressly states that its contents are provided as “internal suggestion to Department of Justice attorneys.” Id. Therefore, the contents of this manual theoretically are not binding on any federal court. [27] Mission Measurement Corp. v. Blackbaud, Inc, 216 F.Supp.3d 915, 921 (N.D.Ill. 2016). [28] Digital Intent, 2016 WL 6395409, at *3. [29] McFarland, 2017 WL 741569, at *2; Blackbaud, 216 F.Supp.3d at 921; Ciro, 242 F.Supp.3d at 798. [30] Evans, supra note 10, at 191. Some federal court decisions show that requesting the plaintiff to provide sufficient facts describing the trade secret in question is not something newly developed following the enactment of the DTSA. Rather, it has been the position held by federal courts before the DTSA came into effect. AWP, Inc. v. Commonwealth Excavating, Inc., Civil Action No. 5:13cv031., 2013 WL 3830500, at *5 (W.D. Va. July 24, 2013); Events Media Network, Inc. v. Weather Channel Interactive, Inc., Civil No. 1:13–03 (RBK/AMD), 2013 WL 3658823, at *3 (D. N.J. July 12, 2013); Council for Educational Travel, USA v. Czopek, Civil No. 1:11–CV–00672, 2011 WL 3882474, at *4 (M.D. Pa. Sept. 2, 2011); DLC DermaCare LLC v. Castillo, No. CV–10–333–PHX–DGC, 2010 WL 5148073, at *4 (D. Ariz. Dec. 14, 2010). [31] Blackbaud, 216 F.Supp.3d at 921. [32] Ciro, 242 F.Supp.3d at 800. [33] Engler, supra note 13, at 21; Hensley, supra note 8, at 44. [34] Hensley, supra note 8, at 44; Newman, Mendelson & Song, supra note 2, at 2-3; Rich, supra note 8, at 6; Engler, supra note 13, at 20. [35] 18 U.S.C. §1836(b)(2)(A). [36] Newman, Mendelson & Song, supra note 2, at 3. [37] Under the DTSA, a court may, only in “extraordinary circumstances,” issue an ex parte seizure order when “find[ing] that it clearly appears from specific facts that”: (1) “an order issued pursuant to Rule 65 of the Federal Rules of Civil Procedure or another form of equitable relief would be inadequate to achieve the purpose of this paragraph because the party to which the order would be issued would evade, avoid, or otherwise not comply with such an order;” (2) “an immediate and irreparable injury will occur if such seizure order is not issued;” (3) “the harm to the applicant of denying the application outweighs the harm to the legitimate interests of the person against whom seizure would be ordered of granting the application and substantially outweighs the harm to any third parties who may be harmed by such seizure;” (4) “the applicant is likely to succeed in showing that the information is a trade secret and the person against whom seizure would be ordered misappropriated the trade secret of the applicant by improper means or conspired to use improper means to misappropriate the trade secret of the applicant;” (5) “the person against whom seizure would be ordered has actual possession of the trade secret and any property to be seized;” (6) “the application describes with reasonably particularity the matter to be seized and, to the extent reasonable under the circumstances, identifies the location where the matter is to be seized;” (7) “the person against whom seizure would be ordered, or persons acting in concert with such person would destroy, move, hide, or otherwise make such matter inaccessible to the court, if the applicant were to proceed on notice to such person;” and (8) “the applicant has not publicized the requested seizure”. 18 U.S.C. §1836(b)(2)(A)(ii). [38] 18 U.S.C. §1836(b)(2)(A)(i). [39] Engler, supra note 13, at 21; Michael T. Renaud & Nick Armington, DTSA and Ex Parte Seizure – Lessons from the First Ex Parte Seizure Under The DTSA, Mintz Levin Cohn Ferris Glovsky and Popeo PC (Aug. 21, 2017), https://www.globalipmatters.com/2017/08/21/dtsa-and-ex-parte-seizure-lessons-from-the-first-ex-parte-seizure-under-the-dtsa; Matthew Werdegar & Warren Braunig, One Year On: the Federal Defend Trade Secrets Act, Daily J. (Apr. 26, 2017), available at: https://www.keker.com/Templates/media/files/Articles/Keker%20(DJ-4_26_17).pdf. [40] Newman, Mendelson & Song, supra note 2, at 3; Dharnidharka, Day & McCrimmon, supra note 8; Werdegar & Braunig, supra note 39. [41] OOO Brunswick Rail Mgmt. v. Sultanov, No. 5:17-cv-00017, 2017 WL 67119, *2 (N.D. Cal., Jan. 6, 2017); Magnesita Refractories Company v. Mishra, CAUSE NO. 2:16-CV-524-PPS-JEM, 2017 WL 365619, at *2 (N.D. Ind. Jan. 25, 2017). [42] Baleriz Carribean Ltd. Corp. v. Calvo, Case 1:16-cv-23300-KMW, at 7 (S.D.Fla. Aug. 5, 2016). See also Renaud & Armington, supra note 39. A commentator opines that federal courts are reluctant to issue an ex parte seizure order against someone who has never concealed evidence or disregarded court orders before. Engler, supra note 13, at 21. [43] Digital Assurance Certification, LLC v. Pendolino, Case No: 6:17-cv-72-Orl-31TBS, at *1-2 (M.D.Fla. Jan. 23, 2017). [44] Engler, supra note 13, at 21; Dharnidharka, Day & McCrimmon, supra note 8. [45] Mission Capital Advisors, LLC v. Romaka, No. 16-cv-05878-LLS (S.D.N.Y. July 29, 2016). Some commentators consider Romaka the very first case in which a federal court ordered a DTSA ex parte seizure after the DTSA became effective. Renaud & Armington, supra note 39. [46] Romaka, No. 16-cv-05878-LLS, at 1-3. [47] Id. at 2. [48] Id. [49] Id. [50] In Romaka, the federal district court found the followings after reviewing the facts of this case along with the requirements under the DTSA: (1) “[a]n order issued pursuant to Rule 65 of the Federal Rules of Civil Procedure or another form of equitable relief would be inadequate because [the defendant] would evade, avoid, or otherwise not comply with such an order;” (2) “[a]n immediate and irreparable injury to [the plaintiff] would occur if such seizure is not ordered;” (3) “[t]he harm to [the plaintiff] of denying the application outweighs the harm to the legitimate interests of [the defendant];” (4) “[the plaintiff] is likely to succeed in showing that the information at issue is a trade secret based on [the plaintiff's] averments;” (5) “[the plaintiff] is likely to succeed in showing that [the defendant] has misappropriated [the plaintiff's trade secret] by improper means;” (6) “[the plaintiff] is likely to succeed in showing that the [defendant] has actual possession of the [plaintiff's trade secrets]; (7) “[d]espit the risk that [the defendant] would make the [plaintiff's trade secret] inaccessible to the court, or retain unauthorized copies, [the plaintiff] is proceeding on notice;” and (8) “[the plaintiff] is likely to succeed in showing, and has represented, that it has not publicized the requested seizure.” Id. at 2-4. [51] Id. at 4. In Romaka, the plaintiff also applied for the seizure of its proprietary information other than its client and contact lists. However, the Romaka court denied the plaintiff's request for the seizure of other proprietary information because the plaintiff failed to describe “with sufficient particularity” such information and related facts, such as “confidentiality and irreparable harm.” Id. [52] Renaud & Armington, supra note 39. [53] Id. [54] Newman, Mendelson & Song, supra note 2, at 3; Engler, supra note 13, at 21; Renaud & Armington, supra note 39. [55] Newman, Mendelson & Song, supra note 2, at 3. [56] For instance, the injunctive remedies available under the DTSA. 18 U.S.C. §1836(b)(3). For further example, a preliminary injunction or a temporary restraining order available under the FRCP. Fed. R. Civ. P. 65(a), (b). [57] As stated above, the DTSA does not preempt or displace any other remedies provided by other federal laws and state laws for trade secret misappropriation. 18 U.S.C. §1838. [58] Cook, 191 F.Supp.3d at 1077, 1076-1077, 1079; Daniels, 2016 WL 7034976, at *10-11, 14; Nettles, 2016 WL 4124114, at *4. See also Newman, Mendelson & Song, supra note 2, at 2-3; Rich, supra note 8, at 6; Boxer, Griem, Jr., Malyshev & Ruffi, supra note 8. [59] DTSA §2(e), Pub. L. No. 114-153, 130 Stat. 376, 381-382. [60] Werdegar & Braunig, supra note 39; Krotoski, Burkholder, Harrison & Houmand, supra note 2, at 14; Engler, supra note 13, at 21. [61] Avago Technologies U.S. Inc. v. Nanoprecision Products, Inc., Case No. 16-cv-03737-JCS, 2017 WL 412524, at *9 (N.D.Cal. Jan. 31, 2017); Cave Consulting Group, Inc. v. Truven Health Analytics Inc., Case No. 15-cv-02177-SI, 2017 WL 1436044, at *5 (N.D. Cal. Apr. 24, 2017); Physician's Surrogacy, Inc. v. German, Case No.: 17CV0718-MMA (WVG), 2017 WL 3622329, at *8-9 (S.D. Cal. Aug. 23, 2017). See also Tara C. Clancy, April Boyer & Michael R. Creta, Emerging Trends in Defend Trade Secrets Act Litigation, National Law Review (Sept. 26, 2017), https://www.natlawreview.com/article/emerging-trends-defend-trade-secrets-act-litigation; Milligan & Salinas, supra note 8. [62] Cook, 191 F.Supp.3d at 1076-1079; Allstate Insurance Company v. Rote, No. 3:16-cv-01432-HZ, 2016 WL 4191015, at *1-5 (D. Or. Aug. 7, 2016); Syntel Sterling Best Shores Mauritius Limited v. Trizetto Group, Inc., 15-CV-211 (LGS) (RLE), 2016 WL 5338550, at *6 (S.D.N.Y. Sept. 23, 2016); Adams Arms, LLC v. Unified Weapon Systems, Inc., Case No. 8:16-cv-1503-T-33AEP, 2016 WL 5391394, at *6 (M.D. Fla. Sept. 27, 2016); Brand Energy & Infrastructure Services, Inc. v. Irex Contracting Group, CIVIL ACTION NO. 16-2499, 2017 WL 1105648, at *3-8 (E.D. Pa. Mar. 24, 2017); Sleekez, LLC v. Horton, CV 16–09–BLG–SPW–TJC, 2017 WL 1906957, at *5-6 (D. Mont. Apr. 21, 2017). See also Rich, supra note 8, at 8. [63] Unified Weapon Systems, 2016 WL 5391394, at *6; Horton, 2017 WL 1906957, at *5-6. See also Milligan & Salinas, supra note 8; Werdegar & Braunig, supra note 39. A recent federal court decision reveals that federal courts will likely dismiss a DTSA claim if a plaintiff makes no specific allegations other than a “conclusory allegation” of the continuing trade secret misappropriation. Hydrogen Master Rights, Ltd. v. Weston, 228 F.Supp.3d 320, 338 (D.Del. 2017). See also Engler, supra note 13, at 23. [64] Unified Weapon Systems, 2016 WL 5391394, at *6. See also Rich, supra note 8, at 8. [65] Engler, supra note 13, at 23. [66] Milligan & Salinas, supra note 8. [67] Engler, supra note 13, at 23. [68] 18 U.S.C. § 1838. [69] Conley, supra note 4. [70] Synergy Worldwide, 208 F.Supp.3d at 1201; Cori, 2016 WL 6611133, at *2-5; Nettles, 2016 WL 4124114, at *4 fn.2; Cook, 191 F.Supp.3d at 1077, 1079-1080; Daniels, 2016 WL 7034976, at *8-10; M.C. Dean, 199 F. Supp. 3d at 1353-1357; Ghost Controls, 2016 WL 4059706, at *1 fn.1, *2-4; MiTek USA, 2016 WL 4418013, at *9-10; Ciro, 242 F.Supp.3d at 797-800. [71] Evans, supra note 10, at 190; Fues, Giannelli & Self, supra note 10; Fertig & Betts, Considerations—Part I, supra note 10, at 3-5. [72] Blackbaud, 216 F.Supp.3d at 921. [73] Digital Intent, 2016 WL 6395409, at *3. See also Evans, supra note 10, at 191. [74] Engler, supra note 13, at 21; Dharnidharka, Day & McCrimmon, supra note 8. [75] Sultanov, 2017 WL 67119, at *2; Mishra, 2017 WL 365619, at *2; Calvo, Case 1:16-cv-23300-KMW, at 7; Pendolino, 2017 WL 320830, at *1-2. See also Newman, Mendelson & Song, supra note 2, at 3; Engler, supra note 13, at 21; Renaud & Armington, supra note 39; Werdegar & Braunig, supra note 39. [76] Newman, Mendelson & Song, supra note 2, at 2-3; Rich, supra note 8, at 6; Boxer, Griem, Jr., Malyshev & Ruffi, supra note 8. [77] Cook, 191 F.Supp.3d at 1076-1079; Rote, 2016 WL 4191015, at *1-5; Trizetto Group, 2016 WL 5338550, at *6; Unified Weapon Systems, 2016 WL 5391394, at *6; Irex Contracting Group, 2017 WL 1105648, at *3-8; Horton, 2017 WL 1906957, at *5-6. See also Rich, supra note 8, at 8. [78] Milligan & Salinas, supra note 8. [79] Engler, supra note 13, at 23.
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