The Introduction to the Trade Secret Management Guidelines

The Introduction to the Trade Secret Management Guidelines

2024/09/09

Due to an open, collaborative culture and the need to balance knowledge sharing with protection, research academic institutions always face unique challenges in managing confidential information. However, trade secret protection is still essential for research academic institutions in order to safeguard their competitive advantages and valuable research results. Accordingly, the “Trade Secret Management Guidelines”, released by the Taiwan Intellectual Property Office (TIPO) on May 27, 2024, is specifically tailored for the trade secret protection in the research and academic circumstance.

Taking into account the essential differences between research academic institutions and enterprises, these guidelines use a phased and scalable approach to implement trade secret protection measures. With these guidelines, each research academic institution can evaluate its own size, research field, available resources, etc., and establish an appropriate trade secret management system to effectively identify, protect and manage its trade secrets.

The Trade Secret Management guidelines outline 13 measures for managing trade secrets, covering the entire life cycle of trade secret protection. In addition, these guidelines recommends that research academic institutions adopt a phased implementation strategy, starting from the "entry-level" stage focusing on basic measures, and gradually entering the "basic" and "enhanced" stages to improve each management measure. The following is an overview of each measure:

1.Distinguishing Trade Secrets

In order to facilitate the protection of trade secrets, institutions should distinguish what is trade secret information at the entry stage, whether it is self-developed or obtained from others. As progressing to the basic stage, institutions should define and provide examples of trade secrets they produce or acquire. When entering the enhanced stage, institutions should develop a process for identifying whether an information is a trade secret.

2.Access Control

To prevent unauthorized disclosure, institutions should control access to trade secrets. At the entry stage, institutions must set access permissions for trade secrets. As progressing to the basic stage, access should be granted based on the need for the information. When entering the enhanced stage, institutions need to adjust access permissions in response to job changes and personnel turnover.

3.Identification

Identifying trade secrets helps ensure that those accessing the information are aware of its confidentiality. At the entry stage, institutions need to identify information considered to be trade secrets, but there are no restrictions on the identification method. As progressing to the basic stage, institutions need to clearly define how trade secrets will be identified. When entering the enhanced stage, the key is to ensure that all contacts know that the information they come into contact with is a trade secret.

4.External Disclosure Review

In order not to affect subsequent research or applications, institutions should review the information that will be disclosed to the public. At the entry stage, institutions should ensure that information is reviewed by responsible personnel before it is disclosed to the public. As progressing to the basic stage, institutions need to identify which items should be reviewed. When entering the enhanced stage, institutions shall distinguish what should be reviewed based on the nature of the information disclosed to the public.

5.Circulation Control

Controlling the circulation of trade secrets can prevent them from being arbitrarily disclosed. At the entry stage, institutions should ensure that responsible personnel have consent to the circulation of trade secrets. As progressing to the basic stage, the key is whether the behavior of circulating trade secrets is recorded. When entering the enhanced stage, institutions should take countermeasures to prevent trade secrets from being leaked during the circulation process.

6.Reproduction Control

Controlling the reproduction of trade secrets can ensure that the use of trade secrets is limited to a controllable scope. At the entry stage, institutions should limit the reproduction of trade secrets. As progressing to the basic stage, the key is whether the behavior of reproducing trade secrets is recorded. When entering the enhanced stage, institutions should take measures to avoid the increased risk of leakage of trade secrets after the reproduction behavior.

7.Destruction

At the entry stage, institutions should ensure that the consent of the responsible personnel is obtained when destroying trade secret. As progressing to the basic stage, institutions should consider the impact of destruction before destroying trade secrets and ensure that records of destruction are retained. When entering the enhanced stage, the key is whether the trade secrets are destroyed in an irrecoverable way.

8.Usage record retention

Keeping the usage record of trade secrets can help provide evidence in litigation. At the entry stage, institutions should keep records of access and use of trade secrets. As progressing to the basic stage, institutions should further specify the items that need to be retained in the records. When entering the enhanced stage, institutions should ensure that the records retained are authentic and will not be arbitrarily tampered with. Therefore, if necessary, a third party agency can be entrusted with the preservation of evidence.

9.Designating Responsibility for Implementation

Setting up responsible personnel can help ensure that the trade secret management mechanism is effectively implemented. At the entry stage, institutions simply need to ensure there is someone responsible for driving trade secret management. As progressing to the basic stage, institutions shall assign dedicated personnel to be responsible for trade secret management. When entering the enhanced stage, institutions must establish a dedicated unit to coordinate the protection of trade secrets through a clear division of powers and responsibilities.

10.Confidentiality and Ownership Arrangements

Signing confidentiality and ownership agreements can ensure that internal personnel who may have access to trade secrets understand their confidentiality obligations. At the entry stage, institutions only need to sign a written confidentiality agreement with those who may have access to trade secrets. As progressing to the basic stage, institutions shall clearly define the items that must be included in the confidentiality and ownership agreement. When entering the enhanced stage, institutions need to further evaluate whether to adjust the contents of confidentiality and ownership agreements in response to job changes and personnel turnover.

11.Promotion and Training

Through promotion and training, institutions can gradually improve personnel's awareness of confidentiality and help them understand the key points of trade secret management. At the entry stage, institutions can promote the importance of trade secret management and provide appropriate training to all personnel. As progressing to the basic stage, institutions should establish promotional materials, explain the management objectives and specific practices in the training, and conduct an evaluation of effectiveness. When entering the enhanced stage, institutions need to adjust the content required for training based on differences in units, objects, trade secret characteristics, etc.

12.Departure Management

At the entry stage, institutions should remind departing personnel of their confidentiality obligations. As progressing to the basic stage, institutions shall further require the departing personnel to hand over the trade secrets they held during their tenure. When entering the enhanced stage, institutions need to conduct exit interviews with important departing personnel to ensure that they clearly understand their confidentiality obligations.

13.Confidentiality and Ownership Arrangements with External Parties

Signing confidentiality and ownership agreements with external parties can help prevent institutions mired in unnecessary controversies. At the entry stage, institutions only need to sign confidentiality agreement with external parties before providing trade secrets to them. As progressing to the basic stage, institutions shall clearly define the items that must be included in the confidentiality and ownership agreement. When entering the enhanced stage, institutions needs to confirm with external parties and reach a consensus on the management measures that both parties need to take.

The Trade Secret Management guidelines provide a comprehensive framework for research academic institutions in Taiwan to protect their trade secrets. Regardless of the size of the research academic institutions or the field it focuses on, as long as they follow the above-mentioned 13 measures and adjusts according to their current management situations, they can gradually establish a trade secret management system that meets their own needs.

※The Introduction to the Trade Secret Management Guidelines,STLI, https://stli.iii.org.tw/en/article-detail.aspx?no=105&tp=2&i=171&d=9241 (Date:2025/02/10)
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(3) Protective orders (as to confidential information) As most IP litigation cases involve matters concerning confidential information or trade secrets, which are often crucial for the survival of an enterprise, the Intellectual Property Case Adjudication Act introduces a protective order into practice to preserve the confidentiality of specific information given by parties to the suit or a third party. A party to the suit or a third party can apply to the court to issue a protective order restraining the accessibility to the protected confidential information and restraining those who have accessed to the confidential information from disclosing it to others. Any intentional violation of the protective order is subject to a criminal liability. It is expected that by introducing the protective order, confidential information or trade secret holder may become more willing to reveal such information, which may assist improving the accuracy of resolving the disputes between parties. 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The overwhelming success of the TIPS project evidenced by the number of enterprises implementing the system indicates that Taiwanese companies are self-motivated, able to see the importance of intellectual property as their main source of competiveness and are ready and willing to move into the next stage of “innovative” management. It is believed that through the government’s pragmatic and foresight policies coupled with the adventurous and hard work spirits possessed by the local enterprises, Taiwan will eventually reach its goal of becoming a “green silicon island”, creating another “economic miracle”. Along with Singapore, Hong Kong and South Korea. http://www.asianinfo.org/asianinfo/taiwan/pro-economy.htm (last visited: 12/31/2008) TIPS website: http://www.tips.org.tw/ http://www.taie.com.tw/English/970520a.pdf (last visited: 12/3132008) http://www.taie.com.tw/English/970520a.pdf (last visited: 12/3132008)

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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

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J. Kitty Huang Chien-Shan Chiu Background In order to provide insight into intellectual property (IP) awareness, the status quo as well as potential hardship and demands arise over IP management, STLC was commissioned by IDB (Industrial Development Bureau) to conduct a survey study in June 2010. In this article, we provide briefings on the contents, research methodology and major findings of this study. About the research The survey questionnaire was sent by means of emails or posts to a total of 1000 business establishments randomly generated from the registration data facilitated by the Ministry of Economic Affairs. This was also the first time that such a survey has been envisaged on such a comprehensive scale, covering businesses located around Taiwan with the aim being to produce an in-depth analysis into IP management in various industries including manufacturing, precision machineries, photonics, bio-medicals, info-techs, semiconductors etc. Sixty-five percent of the respondents have less than fifty employees and the overall response rate achieved was 13.1%.1 A continuing need to strengthen IP awareness is required The first section of the questionnaire dealing with IP awareness gauged respondent companies IP knowledge and understanding through a series of questions relating to IP law and practice. When asked whether formal registration was necessary to obtain a range of intellectual property rights (IPRs), over 70% of companies replied with correct answers, namely patents, designs and trademarks. However, through other questions at a more advanced level, the responses revealed a general lack of knowledge in IP law and hence a continuing need to strengthen IP awareness is required. For instance, overall 70% of companies know that obtaining patents will require formal registration, yet surprisingly even of these over 50% incorrectly thought the manners of patent utilization, such as making products, will not result in infringing others IPRs. This result arguably suggests that respondents are in the main unaware that a patent does not give the patent owner the right to exploit the patented invention himself, but rather, he has only the “exclusive right” to stop others from doing so. For another instance, whilst 32% of respondents inaccurately thought that a formal registration is required to obtain copyrights, nonetheless this does not equate to the result being a near 70% of companies have a full and correct knowledge in regard to copyright. When faced with a slightly more obscure question of who would own the copyright in commissioned work (such as website creation) in the absence of a contract, 26% of companies didn’t know and 30% answered incorrectly. On the same token, though only 10% of respondents erroneously believed that trade secrets would require a formal registration, when asked whether the company’s client list may be a trade secret, the number of correct replies (61%) drops sharply when compared to the previous one. Though intended as a question to discriminate at the upper levels of trade secret awareness, the replies are more likely to reflect a lack comprehension of the subject among Taiwanese companies. The important message arise from the overall scales in the first section of the survey is that the need for IP awareness promotion and enhancement amongst companies in Taiwan still exists. Lack of IP expertise is a major barrier In the second section of the questionnaire companies were asked a series of questions which were intended to measure the status quo through the extent of IP management practices. Perhaps one would agree that the issue of perceptions of the importance of IP to a company is greatly linked to how effective it manages them. When asked to indicate reasons as to why IP is important to their business, the replies were rather polarized. The two most popular reasons were “means to differentiate from competitors” (33%) and “to prevent infringement” (30%). The distinction between the two is clearly that the former reason is relatively active and strategic whilst the latter is perceived to be passive and defensive. On the other hand, “to retrieve the cost of R&D” (4%) and “to attract more investors” (5%) are least likely to be seen as the reasons why IP is important to them. The results may suggest that generally speaking, Taiwanese companies tended not to utilize their IP to generate revenues nor correlate them with the business strategies, but rather, see them more of a shield to avoid infringement. Companies were asked what IPRs they own and the most common ones are trademarks (21%) and utility patents (20%), with invention patents (14%) being the third on the rank. In contrast only 2% of respondent companies own copyrights. While such result may be attributed to the overall structure of the industry, it may also link to the observation that most companies not merely lack the comprehension of copyrights but may also not be aware of owning such IPR. Furthermore, it is also surprising to find that 45% of respondents do not own any IPRs. The absence of IPRs within these companies is perhaps a key indication of poor awareness and inactive management of IPRs amongst many Taiwanese companies. To measure the extent of IP management is not easy as the intensity of it differs both by sector and by size. Therefore, the task is achieved through 9 questions designed on the concept of PDCA (plan-do-check-act) process which would allow the respondents to review and find out any inadequacy in their IP management as they proceed. One would expect that those companies with effective IP management would take care to evaluate the various IPRs required at different time intervals. Whilst all of the answer choices are considered to be “important timings”, for example “when planning for new skills/products/business” and “when further investment in IP would enhance defense (such as infringement prevention); yet the results revealed that over 60% of the companies did not perform such evaluation at whatever timing. This may suggest that in general, companies in Taiwan are inadequately concerned with the evaluation process within their management of IP. Such a result may consequently make them ignoring means to prevent infringement (such as checking competitors’ IPRs and prior-art search) or pay attention to regulation updates. Effective IP management indisputably requires certain monetary inputs. Companies were asked whether they have regularly spent on obtaining and maintaining IPRs the firm owns, and remarkably only about 36% of respondents answered this question. In addition the companies were asked about how much they spent on “application fees”2,“incentives offered to inventors”, “spending on HR” and “other expense”. Only a paltry 6% of all respondent companies spent on all the abovementioned categories and mostly up to the amount of NT$100,000 (roughly USD$3300) per each. Linked with the spending on IPRs is perhaps whether companies have designated staff responsible for managing IPRs or have a separate IP department. Again, 70% of respondents replied negatively to this question and only 10% of some larger companies (with over 200 employees) have specific personnel or department designated to assume this responsibility. The results may indicate a general lack of expertise in managing IPRs as a barrier to leveraging full value of them as well as making proper legal decision in the event of IP related disputes Companies were asked how to protect their IPRs through a variety of methods of protection though the majority (over 72%) didn’t implement any of them. The most highly identified method being “protect core skills by patents”, however, only 35% of companies adopted such protection. Furthermore, roughly 76% of the companies did not conduct training in IP issues for employees, and over 75% did not attempt to assess the efficiency of their management of IP. The explanation to the above is conceivably a general lack of IP expertise due to inadequate monetary inputs as well as perceived high costs for IP specialists within the company. The results ultimately reflect an inefficient execution of IP management in the massive Taiwanese companies. Most companies have only limited resources The final aspect of IP management that has been surveyed is the hardships occurred and accordingly the resources sought to solve them. When asked what are the major difficulties in the process of managing IP, the most common answers were “high expenditure on filing and maintenance” (18%), “lack of professional advice” (15%) and “regulatory complexity” (15%). These results are arguably all related to the facts already discussed in the afore-mentioned paragraphs. In general, the survey revealed that most companies have only limited resources and therefore highly demand external aids such as government funding or projects to help soften the hardships and improve their management skills. Accordingly, “unifying resources for enhancing IP management through a mutual platform” (22%) and “facilitate industry peer networks” (21%) being the most popular resources sought. Furthermore, 14% of the respondents indicated their urge to receive “on-site expert assistance”, and a remarkable 90% of the respondents have never been aware of the TIPS (Taiwan Intellectual Property Management System) project, which is one initiated by the government to help companies set up a systematic IP management system. As a result, efforts to promote the TIPS project should be further devoted as the initial step to assist companies strengthen their IP awareness and management skills. Conclusion The results of the survey present the status quo of IP management amongst the companies in Taiwan which is proportionally consistent with their IP awareness as well as hardships and resources sought. The present study shows what one might expect, that is larger companies tend to be more IP aware and have greater resources to manage their IPRs, whilst the rest of others (especially SMEs) are in the main inadequately aware of IP, which is crucial to enhance active IP management within and throughout their firms. While various resources are highly demanded, perhaps the government should firstly take steps to promote that awareness within and throughout their organizations. Linked with this is the second important point which is that further promotion of the TIPS project should be aimed at not only enhancing IP awareness but also assisting companies to better manage their IPRs. IP management is essential to preserve IP created by companies and the TIPS system would enable companies to foster and strengthen key aspects of IP management such as conduct training in IP issues for employees, evaluate various IPRs required, etc. Some of the complementary measures as such expert consultations and TIPS networks or seminars would also help to alleviate some of the hardships encountered in the process of managing IP. On the other hand, like the “Survey on Business Attitudes to Intellectual Property” being conducted yearly in Hong Kong since year 2004, it is suggested that the present survey research or the alike to be continually carried out to assist promoting IP awareness within Taiwan industry. Finally, we would like to thank everyone who contributed to this survey research and hope that it provides valuable insight into the goals originally proposed. 1.The survey resulted in 157 replies from which 26 of them were nullified by false or incomplete answers. 2.Application fees” include fees occurred from exploring inventions up to application and maintenance, which also include attorney fees.

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