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Trade Secret

Qu Xiaoyang, Director of Intellectual Property | Dec. 4. 2013

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Trade Secret

Trade secret protection

A challenge for companies in China

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Legal Frame Work

Civil law

Labor law

Anti-unfair competition law (1993)

Criminal law

SAIC Administration regulation

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Approach of Trade Secret Enforcement

Civil procedure Criminal procedure

( Preferred by local company )

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Chinese Sustainable Growth Requires

20% Annual turnover rate in China

Leading local company prefers criminal prosecuting

MNC has concerns when transferring cutting-edge technology to China

Enterprises has no motivation to develop their own trade secret

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Two cases

District court ruled that the employer had violated the freedom of correspondence of the employees by monitoring their e-mail send off. The employee was charged of downloading sensitive files without authorization and send it to 3rd party, using company PC and company IT network, but through private mail box.

Court ruled that the IT monitor / recorded system is under full control of the employer. Therefore the record of unauthorized downloading was not sufficient to charge the former employee.

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Demand for a modern trade secret protection system

Apply to employee, besides business operator

Defendant’s burden of proof

Court order for evidence preservation

Consequential offense replaced by Offense of act

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Thank you!