Former IC firm employees charged with trade secret leaks to China

Taipei, Four former employees of Hsinchu-headquartered Novatek Microelectronics Corp. have been indicted for leaking trade secrets to a rival Chinese firm, the Hsinchu District Prosecutors Office said Monday.

In a statement, the office said prosecutor Su Heng-yi led an investigation into alleged trade secret leaks, and his team last year arrested the four former Novatek engineers, who were involved in the leaks that occurred starting from 2016.

Su indicted the four former employees for violating Taiwan's Trade Secrets Act, and secured approval from the Hsinchu District Court to seize their cash and property as potential future compensation for the information leaks.

There was no word of the sentences or punishment Su was recommending.

Prosecutors said the case originated when a former Novatek engineer surnamed Tseng was poached by a Chinese IC company located in Shanghai.

The Chinese company promised to double the pay Tseng received from Novatek and appoint him as the president of the company as long as he handed over Novatek's trade secrets, the office said.

While Tseng was still on Novatek's payroll, he stole his employer's confidential information on OLED display driver ICs and virtual reality research and development, the statement said.

After Tseng left Novatek, he helped the Shanghai company approach three other Novatek engineers to switch to the Chinese firm and help Tseng with the information leaks.

The four traveled back and forth between China and Taiwan, working for the Chinese firm and after their whereabouts were pinned down by investigators, they were arrested in Taiwan, prosecutors said.

According to prosecutors, Tseng set up a company in the Tai Yuen Hi-Tech Industrial Park in Hsinchu under the name of his spouse, where the three engineers duplicated the data Tseng stole to leak the information to the Chinese firm.

Local media cited Novatek as saying Monday that the secret leaks did not impose any adversarial impact on its operations as it reported the case to police soon after the wrongdoing was discovered and informed all of its clients that could be affected by the case.

Novatek currently focuses on OLED display driver IC development and is ahead of its peers in Taiwan in that particular technology, analysts said.

Shares of Novatek fell 0.69 percent to close at NT$143.00 (US$4.64) Monday in line with the broader market, where the weighted index ended down 0.52 percent at 9,708.22.

Source: Focus Taiwan News Channel