14 July 2015
Online job banks continue to play an important role in the employee recruitment market. A typical business model of job banks is to offer their online space for job applicants to upload their resumes for free in order to collect as many resumes as possible. The job banks will edit these resumes as per their customer database requirements, publish them, and subsequently provide access to the authorized members, usually recruiters or human resource managers. If these recruiters want to browse and review the customer database owned by the online job bank, they are required to pay user fees and enter into a contract with the job bank. As a preventative measure, the job bank will prohibit recruiters from providing their member accounts, passwords, and from disclosing customer data to any unauthorized third party. Recruiters who violate the contract terms are liable for breach of contract.
Recruitment Firm A and Job Bank D have signed into a contract in which A undertook a consideration not to provide its member account and password to any third party. However, A provided its member account and password to the employees of Company B and Company C to publish recruitment messages on the job bank’s website. Since the available positions published by B and C did not seem to be the manpower A would need, Job Bank D investigated this matter and found that the contact information in the said recruitment messages belong to the employees of B and C. Obviously B and C accessed to D’s customer data by means of A’s member account. Therefore D iled a lawsuit claiming trade secret misappropriation and infringement against A, B and C.
Article 10 of the Trade Secret Act stipulates as follows: “Any of the following acts shall be deemed as a misappropriation of trade secrets:
(1) To acquire a trade secret by improper means;
(2) To acquire, use, or disclose a trade secret as deined in the preceding item knowingly or unknowingly, due to gross negligence;
(3) To use or disclose an acquired trade secret knowing, or not knowing due to gross negligence, that it is a trade secret as deined in item one;
(4) To use or disclose by improper means a legally acquired trade secret; or
(5) To use or to disclose without due cause a trade secret to which the law imposes a duty to maintain secrecy.”
The trade secrets as deined by law shall fulill the following three factors: non-publicity, economic value and secrecy. In this judgment, the court held that recruiters must contract with job banks to acquire their own accounts and passwords in order to review the customer data, so that the customer’s data is protected and is not voluntarily available to the public. The customer’s data has economic and commercial value since job banks must spend signiicant amount of resources collecting and editing the customer data, as well as maintaining their database. The court also found that the job bank D did take reasonable methods to protect the secrecy of its customer data since only contracted members have access to their database. Therefore, the customer’s data, in the job bank’s possession, can be identiied as trade secrets.
In addition, according to the Trade Secret Act, the ‘improper means’ shall mean “theft, fraud, coercion, bribery, unauthorized reproduction, breach of an obligation to maintain secrecy, inducement of others to breach an obligation to maintain secrecy, or any other similar means.” The court ruled that since A violated its contractual obligation by offering its member account information to B and C to facilitate B and C misappropriating D’s trade secrets, A, B and C all infringed upon D’s trade secrets and are jointly liable to D. In this judgment, the court further opined that whether the defendants B and C are competing with the plaintiff D is not necessary to be discussed by the court, because the aforesaid provision does not limit the person subject to trade secret infringement to be a competitor of the owner of the trade secrets misappropriated.
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