Taiwan Officially Charges Six HTC Employees For Leaking Trade Secrets
December 28, 2013

Taiwan Officially Charges Six HTC Employees For Leaking Trade Secrets

redOrbit Staff & Wire Reports - Your Universe Online

Former HTC Vice President of Product Design Thomas Chien was among six employees indicted Friday for allegedly leaking trade secrets, accepting kickbacks and misreporting expenses, The China Post and other media outlets have reported.

During its investigation into the matter, the Taipei District Prosecutor's Office found enough evidence to formally charge Chien for leaking HTC’s upcoming icon designs, according to Engadget’s Richard Lai.

Those designs are believed to be from the unreleased Sense 6.0, and were reportedly leaked during a presentation made by the ex-VP to prospective business partners for a new company they planned to form.

“There's no mention on whether the other party was tied to the Chinese government, as previously rumored, but the meeting was known to have taken place in Beijing back in June,” Lai said. Furthermore, the probe into Chien’s conduct also found he and his co-conspirators managed to acquire approximately $1.12 million “in the form of false expense claims plus rebates from a supplier,” he added.

Chien and others were arrested back in August following an internal probe at HTC. HTC research and development director Bill Wu and design team senior manager Justin Huang, who were identified as targets of the investigation over the summer, were also along those charged, noted GIGAOM's Alex Colon.

Furthermore, according to The China Post, senior design and innovation manager Huang Hung-yi, manufacturing design department manager Hung Chung-yi, and employee Chen Shih-tsou were also indicted. Three HTC suppliers – Chang Chun-yi, Chen Jung-yuan and Chen Chung-kui – were also charged in the case.

“Prosecutors are seeking the maximum penalty for Chien,” who stands accused of violating of Article 13 of the country’s Trade Secrets Act, “saying he showed no remorse during the investigation and put up specious arguments in an attempt to justify his illegal actions,” The China Post said.

“Prosecutors said that all of them, except Hung Chung-yi, confessed in a remorseful manner to breaking the law, and therefore the court should be lenient with them,” the news outlet added. “In light of the fact that Justin Huang and Huang Hung-yi have settled their disputes with HTC and have been forgiven by the company, prosecutors recommended suspended sentences for the pair.”

This will reportedly be the first case tried under the revised Trade Secrets Act, which was strengthened in February and now allows for a maximum penalty of five years in prison and fines of more than $300,000. In cases where illegal gains exceed the $300,000 mark, however, those fines could be tripled, and when corporate trade secrets are leaked to China or foreign countries, the jail time could be doubled and the fines upped to over $1.6 million.

“Meanwhile, Chien's action has also constituted a breach of trust stipulated in the Securities and Exchange Act, which carries a prison sentence ranging from three to 10 years,” The China Post added.