CHINA Law and Practice Contributed by: Chuanhong Long, Ji Liu and Xiao Jin, CCPIT Patent and Trademark Law Office
to business activities can constitute the business information referred to in paragraph 4 of Article 10 of the Anti-Unfair Competition Law; and • the customer information referred to in the pre - ceding paragraph includes the customer’s name, address, contact information, transaction habits, intentions, content and other information. 1.4 Elements of Trade Secret Protection According to Article 10 of the Anti-Unfair Competition Law, trade secrets must meet three requirements: • they must not be known to the public; • they must have commercial value; and • appropriate confidentiality measures must have A trade secret right-holder needs to prove that it has taken reasonable confidentiality measures to protect its trade secrets. Whether the right-holder has taken reasonable confidentiality measures shall be deter - mined according to factors such as the nature of the trade secret and its “carrier” (ie, medium), the com - mercial value of the trade secret, the identifiability of the confidentiality measures, the reasonability of the confidentiality measures according to the nature of the trade secret, and the right-holder’s will to keep the secret. According to the relevant judicial interpretations, if one of the following measures has been taken and would be sufficient to prevent the leakage of trade secrets under normal circumstances, it shall be determined that the right-holder has taken reasonable confiden - tiality measures: • requiring the signing of a confidentiality agree - ment or stipulating confidentiality obligations in the contract; • putting forward confidentiality requirements for employees, former employees, suppliers, custom - ers, visitors, etc, who have access to and are able to obtain trade secrets, through articles of associa - tion, training, rules, regulations or written notices, etc; been taken by the right-holder. 1.5 Reasonable Measures
• restricting visitors or conducting separate manage - ment for production and business sites such as workshops involving secrets; • distinguishing and managing trade secrets and their carriers by marking, classifying, isolating, encrypting, sealing up or limiting the scope of per - sons who can access or obtain them, etc; • taking measures such as prohibiting or restrict - ing the use, access, storage, reproduction, etc, of computer equipment, electronic equipment, net - work equipment, storage equipment, software, etc, that can access and obtain trade secrets; and • requiring departing employees to register, return, remove and destroy the trade secrets and their car - riers that they have accessed or acquired, and to continue to undertake the obligation of confidenti - ality. 1.6 Disclosure to Employees Employers can sign confidentiality agreements with employees or agree on confidentiality clauses in labour contracts. Moreover, even if the employer and employees do not specifically agree on a confidential - ity obligation, the employee’s obligation to keep the employer’s trade secrets confidential is an implied and accompanying obligation. However, it should be noted that the employee’s implied duty of confidentiality with respect to trade secrets cannot be regarded as the employer’s taking reasonable confidentiality measures. In a typical case, the Supreme People’s Court held that the accompa - nying obligation to keep secrets derived from the prin - ciple of good faith cannot imply the subjective will of the owner of the trade secret to take confidentiality measures and cannot constitute a positive act of tak - According to the relevant judicial interpretations, if the allegedly infringing information is obtained through independent research or reverse engineering, it should be determined that it does not constitute trade secret infringement as stipulated in Article 10 of the Anti- Unfair Competition Law. Here, “reverse engineer - ing” refers to disassembling, surveying and analys - ing products obtained from public channels, through ing confidentiality measures. 1.7 Independent Discovery
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