⭐️CIEL 2024 Year-end recap ⭐️

Session 3: “Regulatory Challenges in Trade Secrets: Rethinking the Penalty System for Trade Secret Infringements”

Deputy Director Kai-Ping Su served as the primary speaker, with Professor Hung-Yi Hsiao rom Soochow University School of Law acting as the discussant. As technological advancements continue to emphasize the importance of safeguarding trade secrets, this session explored criminal corporate liability under the Trade Secrets Act.

Deputy Director Su clarified that although Article 13-4 of the Act presumes corporate negligence, prosecutors are still required to prove that the information involved qualifies legally as a trade secret. Confidentiality is vital; the trade secret’s owner must show that they took objectively reasonable steps to protect the information and had a subjective intent to maintain its secrecy.

Su introduced the EONA framework—Existence, Ownership, Notice, Access—highlighting that plaintiffs typically need to demonstrate the existence of the information, their ownership, notification to defendants about its confidentiality, and defendants’ access to it. Taiwanese courts primarily assess whether defendants knew about the confidential nature of the information and whether plaintiffs/alleged victims implemented robust protective measures. If plaintiffs cannot prove“reasonable protective measures,” their cases are likely to fail.

Professor Hsiao pointed out that trade secret laws in Taiwan are sometimes exploited by companies to stifle competition or retaliate against former employees. Official statistics show a relatively high frequency of non-indictments and acquittals, indicating that criminal proceedings for trade secrets are used frequently but not necessarily the most effective deterrent.

Vice President and Director Wang-Ruu Tseng delivered closing remarks that responded to the main concerns raised in each session.

Regarding financial influencers, she stressed the importance of determining whether influencer behavior substantially differs from conventional marketing or advisory practices and whether additional regulations could impose disproportionate compliance costs.

Turning to fintech and consumer protection, she drew on her personal experience as a commissioner for the Financial Ombudsman Institution to illustrate how the “fair and reasonable” principle sometimes produces inconsistent outcomes due to subjectivity among individual commissioners.

Finally, addressing the session on trade secrets, she observed that trade secret law is frequently employed when non-compete clauses fail to bar employees from joining rival firms, yet the discussion showcased inherent limitations in the current legal framework, indicating a gap between statutory provisions and real-world applications.

The Center will continue researching these issues in order to foster improvements in Taiwan’s legal landscape!

Session 2: “Regulatory Challenges in Fintech: Rethinking the Scope of the Financial Consumer Protection Act”

This session was led by Deputy Director Yueh-Ping (Alex) Yang, with Associate Dean Chung-Jau Wu of the NTU College of Law as the discussant. Their exchange revolved around Taiwan’s Financial Consumer Protection Act (FCPA), particularly its relationship to the Consumer Protection Act, and how to extend current dispute resolution mechanisms like the financial ombudsman system to FinTech.

Deputy Director Yang observed that fintech-related consumer disputes have revealed ambiguities regarding the applicability of the FCPA. If a service falls outside the FCPA’s scope, consumers may have to rely on the Consumer Protection Act, though it is debatable whether this approach is entirely appropriate. More critically, the FCPA not only facilitates civil remedies but also carries administrative oversight by the Financial Supervisory Commission, providing a vital enforcement mechanism. Therefore, Yang suggested that the FSC incorporate several fintech services under the FCPA and eventually shift to a behavioral supervision model.

On the procedural side, he noted that FCPA disputes of fintech services might fall within the financial ombudsman system, but the ombudsman’s resources for handling these disputes might be limited. He, therefore, proposed exploring additional alternative dispute resolution methods for fintech disputes and clarified the uncertainty as to whether these ADR agreements could override the ombudsman’s statutory role.

Associate Dean Wu focused on procedural aspects, suggesting that the financial ombudsman system is part of a broader move toward non-judicial dispute resolution and emphasizing its strengths in efficiency and expertise. If the definition of “financial services” were broadened, the system should be fortified to handle a potentially greater caseload and possibly expanded to cover disputes not strictly categorized as “financial services,” thus reducing the burden on the courts.

The first conference hosted by NTU CIEL “Enterprise Law Innovation Conference: From Technological Innovation to Legal Innovation” was opened on December 11, 2024!

The conference combined the latest academic research and practical observations, focusing on legal issues at the intersection of finance and technology, attracting hundreds of people to participate. Participants included personnel from government units, financial industry players, technology industry players, law professors, and students.

The conference was opened with Vice President and Director Wang-Ruu Tseng  delivering the opening remarks.

Director Tseng first explained that the Center is the first university-level legal research institution at National Taiwan University. Its aim is to integrate resources across different colleges and universities and to engage internationally for more expansive and sustainable research outcomes. She also expressed special appreciation to Distinguished Alumnus Hong-Tu Tsai for his support in creating the Center.

Drawing on the slogan “Collaborate to Innovate, Innovate to Pioneer, Pioneer to Succeed!”, Director Tseng highlighted the Center’s commitment to pioneering research in corporate governance, financial technology and supervision, digital crimes, and family business succession, with next year’s primary focus set on financial technology and supervision. She concluded by thanking the conference participants for their enthusiasm and invited them to stay informed about the Center’s upcoming events and research findings, enabling the Center to become a major think tank offering concrete policy recommendations.

After the opening speech, the discussion on the topics of this event began:

Session 1: “Regulatory Challenges of Financial Influencers: Rethinking the Legal Framework for Financial Advisory and Promotional Activities”

Deputy Director Chao-Hung Chen was the speaker of the first session, with Professor Ying-Hsin Tsai from the NTU College of Law as the discussant. The discussion centered on legal and regulatory challenges brought by how the so-called fiinfluencers, who serve as a key conduit for disseminating financial information over social media.

Deputy Director Chen noted that younger demographics increasingly rely on digital media for investment ideas and financial tips. However, Taiwan’s current regulatory framework primarily governs financial institutions and does not directly address “finfluencers,” leaving influencer-driven activities in a grey area.

He offered two possible avenues: treating finfluencers’ behavior as marketing, an area that lacks comprehensive regulation in Taiwan and might benefit from comparative legal references; or viewing their activities as a form of investment advisory, which could fall under Article 4 of the Securities Investment Trust and Consulting Act and thus require compliance with specific rules.

Building on Dr. Chen’s analysis, Professor Tsai pointed out that some European countries have issued guidance addressing influencer compliance with market abuse regulations—for instance, Germany enforces regulations that influencers must observe. She added that Taiwan’s Securities Investment Trust and Consulting Association has recently updated its self-regulatory guidelines, requiring financial institutions working with influencers to scrutinize influencers’ statements and periodically reassess compliance. Both Dr. Chen and Professor Tsai emphasized, however, that self-regulation alone may be insufficient to address the complexities of this emerging phenomenon.