CHINA Law and Practice Contributed by: Chuanhong Long, Ji Liu and Xiao Jin, CCPIT Patent and Trademark Law Office
through independent research or reverse engineer - ing). • A trade secret aims to protect non-public informa - tion, while the objects of other intellectual property rights are public. For example, patent and trade marks are published during administrative reviews, while trade secrets remain unknown to the public during their whole life span. 1.12 Overlapping IP Rights Trade secrets are often different from other types of intellectual property in the subject matter to be pro - tected, so theoretically, intellectual property rights can be protected by combining trade secrets and other types of intellectual property at the same time. However, due to the different ways of obtaining trade secrets and patents, because the former requires the relevant technology to be kept secret, while the latter requires the technology to be disclosed in exchange for monopoly protection, the same technical content cannot be protected by both trade secrets and pat - ents. In addition, although software, for example, can be protected by both trade secrets and copyrights, two lawsuits would be concursus actionum, and hence only one of them can be chosen to pursue. 1.13 Other Legal Theories The types of infringement acts of trade secrets are stipulated in Article 10 of the Anti-Unfair Competition Law. According to this provision, they are: • obtaining a right-holder’s trade secrets by theft, bribery, intimidation, electronic intrusion or other improper means; • disclosing, using or allowing others to use a right- holder’s trade secrets obtained by the means mentioned in the preceding paragraph; • disclosing, using or allowing others to use a right- holder’s trade secrets in violation of confidentiality obligations or the right-holder’s requirements on keeping such trade secrets confidential; and • obtaining, disclosing, using or allowing any other party to use a right-holder’s trade secrets by instigating, tempting or helping any other party to violate the confidentiality obligations or the right-holder’s requirements on keeping such trade secrets confidential.
Article 10 also stipulates that other natural persons, legal persons and unincorporated organisations oth - er than the business operators who commit the ille - gal acts listed in the preceding paragraph shall be deemed as infringing trade secrets. Therefore, an employee who violates the fiduciary duty by stealing trade secrets can be subject to a lawsuit for either breach of contract or infringement of trade secrets. Trade secret infringement claims can also be brought against defendants who induce employees to breach their contractual confidentiality obligations to According to Article 219 of the Criminal Law, anyone who commits one of the following acts of infringing trade secrets, if the circumstances are serious, shall be sentenced to fixed-term imprisonment of not more than three years together with a fine, or solely a fine; if the circumstances are especially serious, they shall be sentenced to fixed-term imprisonment of not less than three years but not more than ten years and a fine for: • obtaining a right-holder’s trade secrets by theft, bribery, intimidation, electronic intrusion or other improper means; • disclosing, using or allowing others to use a right- holder’s trade secrets obtained by the means mentioned in the preceding paragraph; or • disclosing, using or allowing others to use a right- holder’s trade secrets in violation of confidentiality obligations or the right-holder’s requirements on keeping such trade secrets confidential. the right-holder/employer. 1.14 Criminal Liability At the same time, where a party with full knowledge that a trade secret was acquired through illegal or improper means as set out in the preceding paragraph still proceeds to obtain, disclose, use or allow others to use the trade secret, it shall be regarded as infringe - ment of trade secrets. According to the relevant judicial interpretations, if the implementation of the infringement of trade secrets stipulated in the Criminal Law (i) causes losses to the right-holder of the trade secrets or illegal gains from the infringement of trade secrets of more than CNY300,000, or (ii) directly causes bankruptcy or clos -
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