CHINA Law and Practice Contributed by: Chuanhong Long, Ji Liu and Xiao Jin, CCPIT Patent and Trademark Law Office
• 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; • 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. Best practices vary by different technical fields. For example, in the field of computer software, the right- holder is usually advised to divide the development of the software into different modules, whereby each module is developed by different personnel, so as to avoid the developer mastering all the source code as much as possible. Another example is in the field of chemistry, where codification is usually adopted for raw materials, intermediates, products, etc. 3.2 Exit Interviews Different companies have different strategies for exit interviews. Typically, an exit interview should include the following: • reviewing the terms of the NDA with departing per - sonnel and asking them to contact the company if they have questions with respect to the NDA; • reminding the employee/contractor of their duty not to use or divulge the company’s trade secrets;
• requiring that the employee sign a termination certificate, if possible, acknowledging the employ - ee’s understanding and duty not to disclose trade secrets or confidential information; • obtaining trade secret materials and documents in the employee’s possession or control, including, without limitation, hard copies, soft copies, home computer files, home office files, laptops, cell phones, etc; and • requiring that keys and access cards be returned. 4. Safeguarding Against Allegations of Trade Secret Misappropriation 4.1 Pre-Existing Skills and Expertise At present, there is no specific definition of “employ - ee’s general knowledge and skills” in China’s trade secret legislation. In principle, the knowledge and skills acquired by an employee in working for the employer become part of their personality, and the employee has the right to apply the knowledge and skills acquired in a new job, but the employee should not use trade secrets learned from the previous employer in their work for a new employer. Usually, if an employer is concerned about the possible use of trade secrets by an employee after their employment finishes, the employer will enter into a non-compete agreement with the employee, requiring the employee not to engage in an industry that competes with the employer for up to two years, during which time the employer must pay a reasonable fee to the employee. 4.2 New Employees A new employer should strictly manage the employ - ment of employees hired from competitors and recruit such employees through legal and proper means, by firstly checking whether the employee to be hired has terminated their labour contract with the former employer and whether they have any obligation of non-compete and/or confidentiality of trade secrets, and asking the employee to be hired to make a written statement or commitment. The new employer should investigate the similarities and differences between the original and prospective position of the employee to be hired and arrange the prospective position care - fully, fully investigate the actual performance of such employee, and require such employee to promise not
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