CHINA – SHENZHEN Trends and Developments Contributed by: Yongpan Sheng and Aiyan Ke, Zhong Lun Law Firm
unknown to the public, of commercial value, and for which the rights holder has adopted corresponding confidentiality measures. Determining the existence of a trade secret requires satisfying three constitu - tive elements simultaneously, as follows: (i) secrecy (“not known to the public”); (ii) confidentiality (“adop - tion of corresponding confidentiality measures”); and (iii) value (“possession of commercial value”). Judicial practice indicates that courts are adopting more flex - ible and multi-dimensional approaches in examining and determining these three elements, seeking a bal - ance between “fairness and efficiency”. The goal is to strengthen trade secret protection while prevent - ing rights holders from abusing their rights in a man - ner that impedes technological exchange and market competition. For instance, in (2021) Yue Min Chu No 1114 (Shen - zhen Intermediate People’s Ct. 2021), the court held that the information recorded in the process logs claimed for protection by Sai Company was gener - ated during the production process and constituted specific information held by the producer. Although such information comprises process data and does not form a specific and explicit technical solution, it possesses clear commercial value for subsequent experimentation or production, because knowing one additional piece of failure data reduces trial-and- error costs. This demonstrates that the court no longer emphasises “practicability” for value requirement, but rather requires the presence of “actual or potential commercial value”. Similarly, in (2020) Yue 03 Min Chu No 5073 (Shenz - hen Intermediate People’s Ct. 2020), the court opined that the standard for determining “confidentiality” of a trade secret varies among different enterprises and industries. Companies should integrate their own characteristics, industry nature, and the specific content of the trade secret, combining management experience with legal requirements to construct a dynamic and effective long-term protection mecha - nism for trade secrets. ii) Continued expansion of the scope of trade secret protection In the digital economy era, the carriers of trade secrets and the methods of infringement have undergone sig -
nificant changes. Judicial adjudication has adapted to the trends of digital economic development, mov - ing beyond the narrow traditional definition of trade secrets as “technical information” and “business information” to include digital assets such as data, algorithms, and code within the scope of trade secret protection. For example, in January 2025, the Supreme People’s Court published eight typical cases concerning the protection of scientific and technological innova - tion. The “Intelligent Search Algorithm” trade secret infringement dispute, adjudicated at first instance by the Shenzhen Intermediate People’s Court ( Case No 3843 (2021) Yue 03 Min Chu ), was included as an exemplary illustration of “algorithms obtaining trade secret protection according to law and exploring adju - dication rules for new types of intellectual property”. Specifically, the court held that protecting an algo - rithm as a trade secret does not mean protecting a single mathematical calculation method but involves a holistic consideration of the protected subject mat - ter. The core of the algorithm lies in the selection and optimisation of models and the elimination of mutual interference among models to achieve optimal braking effects. Even if the individual models used in a recom - mendation or search algorithm are publicly known, it is the specific selection and weighted ranking of those models that warrants trade secret protection – provided the rights holder has taken corresponding confidentiality measures and the combination yields commercial benefits and a competitive edge. This case represents the first instance nationwide where an algorithm was protected as a trade secret, respond - ing to the urgent needs of enterprises for protecting new types of technological achievements. It reflects the tendency of trade secret protection to keep pace with the developing needs of new productive forces and the inclination of people’s courts to strengthen institutional supply in new fields and tracks, providing predictable judicial safeguards for trade secret protec - tion in the digital age. Conclusion The year 2025 marked a pivotal period in the develop - ment of China’s trade secret protection framework. Continuous innovation at regulatory level laid a foun - dation for subsequent rule refinement and provided
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