Differences between cultures is often used to explain away international business disputes. While culture may play a part, Taiwan businesses are finding that in the international arena, companies are more than willing to play hardball when it comes to protecting themselves from industrial espionage, according to a number of legal professionals.
A US federal judge on Jan. 5 handed down sentences on two officials of the Taiwan-based Four Pillars Enterprise Ltd (
In addition, the judge has also ordered the company to pay the maximum fine allowable under the Economic Espionage Act -- US$5 million.
According to press reports in the US, Yang Pin-yen apologized for his actions immediately after being sentenced on Thursday. Officials of Four Pillars and the company's legal counsel in Taian, however, said the same day that accusations against the Yangs of attempting to steal trade secrets from the California-based adhesive manufacturer, Avery Dennison were false.
They claimed the Yangs' convictions under the Act could put all Taiwan businessmen who have formed -- or who are thinking of forming -- business relationships with US companies in danger.
The fear is that this is a test case of the Espionage Act and further prosecutions could be forthcoming.
The legal councilors said they believe that cultural differences had not been seriously taken into account during the judicial process.
"They don't understand the Eastern way of doing business," said Pun Jin-fang (
When Avery Dennison officials learned in 1996 that Victor Lee, a research engineer at the company, was passing company secrets to Four Pillars, they informed the FBI, who then arrested the engineer.
Lee later agreed to work undercover to help snare the Yangs. He lured them to a Cleveland hotel room and offered them confidential documents.
The FBI secretly videotaped the meeting between Lee and the Yangs, in which Sally Yang cut the stamp marked "confidential" off the documents. Her father then instructed Lee to dispose of the clipping, the tape showed.
The videotape thus became key evidence in the criminal case against the Yangs.
Pun argued, however, that simply watching the videotape of the incident does not tell the whole story.
"Do not forget Four Pillars and Avery Dennison had close contacts with each other for a period of seven years since 1987. The hotel meeting is just a small part of the whole story," Pun said.
Prior to the Yangs' arrest in 1997, another Taiwan company was caught under the Economic Espionage Act.
Both Taiwan nationals, Hsu Kai-lo (
Initially, Taxol required the use of the bark of the Pacific Yew tree, in which the active ingredient of Taxol occurs naturally. However, that tree has now been placed on the endangered species list and can no longer be harvested.
This promoted Bristol-Myers to spend several hundred million US dollars to develop a method of producing large quantities of Taxol through genetic engineering. The trade secrets in question relate to this substitute production process.
An FBI sting operation resulted in the arrest on June 14, 1997, of Hsu and Ho, with a Bristol-Myers executive posing as a corrupt in-house scientist willing to sell Taxol production secrets to the pair.
In fact, at no time did the defendants receive either the details of the secret production method or the cell lines used to grow Taxol cultures.
Prosecutors from the US Justice Department dropped the charges against Ho in January last year. Hsu, who pleaded guilty after exhausting all defense strategies, was put on a two-year supervised release and fined US$10,000 by the US District Court, Eastern District of Pennsylvania in July of the same year.
In February 1998, only months after the arrests of executives of the Yuen Foong Paper Company and of Four Pillars in 1997, another Taiwan company, Nan Ya Technology Corp (
Seoul-based Korea Semiconductor Technology Corp, a small IC design house that was co-developing DRAMs with Nan Ya Corp, allegedly stole memory technology from two local DRAM companies and transferred it to the Taiwan company.
Fortunately, Nan Ya was able to distance itself from the espionage charge by showing a contract it had previously signed with the South Korean company, which specially requested that it should not use confidential information from other companies or individuals.
From the two cases tried under the Economic Espionage Act to today's growing number of international disputes over industrial espionage, legal advisors said these cases have demonstrated a need for Taiwan businesses to take intellectual property rights seriously and to take cautious steps in the course of making technology transfers.
They believe, however, cultural differences, useful excuse as it might sometimes be, is not able to save the companies or individuals from legal actions taken against them by their international business competitors.
"The lesson Taiwan businessmen should learn from these cases is that there is no such thing as a free meal," said Wu Ching-yuan (
"They should either pay for what is given or make everything clear on paper about matters of technology transfer.
"Cultural differences are used as an excuse all the time. But after all, it is not as persuasive as concrete evidence, such as written documents," Wu said.
Taiwan has arranged for about 8 million barrels of crude oil, or about one-third of its monthly needs, to be shipped from the Red Sea this month to bypass the Strait of Hormuz and ease domestic supply pressures, CPC Corp, Taiwan (CPC, 台灣中油) said yesterday. The state-run oil company has worked with Middle Eastern suppliers to secure routes other than the Strait of Hormuz, through which about 20 percent of the world’s oil and liquefied natural gas typically passes, CPC chairman Fang Jeng-zen (方振仁) said at a meeting of the legislature’s Economics Committee in Taipei. Suppliers in Saudi Arabia have indicated they
South Korea has adjusted its electronic arrival card system to no longer list Taiwan as a part of China, a move that the Ministry of Foreign Affairs said would help facilitate exchanges between the two sides. South Korea previously listed “Taiwan” as “Taiwan (China)” in the drop-down menus of its online arrival card system, where people had to fill out where they came from and their next destination. The ministry had requested South Korea make a revision and said it would change South Korea’s name on Taiwan’s online immigration system from “Republic of Korea” to “Korea (South),” should the issue not be
Tainan, Taipei and New Taipei City recorded the highest fines nationwide for illegal accommodations in the first quarter of this year, with fines issued in the three cities each exceeding NT$7 million (US$220,639), Tourism Administration data showed. Among them, Taipei had the highest number of illegal short-term rental units, with 410. There were 3,280 legally registered hotels nationwide in the first quarter, down by 14 properties, or 0.43 percent, from a year earlier, likely indicating operators exiting the market, the agency said. However, the number of unregistered properties rose to 1,174, including 314 illegal hotels and 860 illegal short-term rental
AIR ALERT: China’s reservation of airspace over the Yellow Sea and East China Sea could be an attempt to test the US’ response ahead of a Trump-Xi meeting, the NSB head said China’s attempts to infiltrate Taiwan are systematic, planned and targeted, with activity shifting from recruiting mid-level military officers to rank-and-file enlisted personnel, National Security Bureau (NSB) Director-General Tsai Ming-yen (蔡明彥) said yesterday. The Chinese Communist Party’s (CCP) integrates national security, intelligence operations and “united front” efforts into a dense network to conduct intelligence gathering and espionage in Taiwan, Tsai said at a meeting of the legislature’s Foreign Affairs and National Defense Committee. It uses specific networks to screen targets through exchange activities and recruiting local collaborators to establish intelligence-gathering organizations, he said. China is also shifting who it targets to lower-ranking military personnel,
RSS