CHINA Law and Practice Contributed by: Chuanhong Long, Ji Liu and Xiao Jin, CCPIT Patent and Trademark Law Office
1.4 Elements of Trade Secret Protection According to Article 9 of the Anti-Unfair Com - petition 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 been taken by the right-holder. 1.5 Reasonable Measures A trade secret right-holder needs to prove that it has taken reasonable confidentiality meas - ures to protect its trade secrets. Whether the right-holder has taken reasonable confidential - ity measures shall be determined according to factors such as the nature of the trade secret and its “carrier” (ie, medium), the commercial 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 confidentiality measures: • requiring the signing of a confidentiality agreement or stipulating confidentiality obli - gations in the contract; • putting forward confidentiality requirements for employees, former employees, suppliers, customers, visitors, etc, who have access to and are able to obtain trade secrets, through articles of association, training, rules, regula - tions or written notices, etc;
• restricting visitors or conducting separate management 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 persons who can access or obtain them, etc; • taking measures such as prohibiting or restricting the use, access, storage, reproduc - tion, etc, of computer equipment, electronic equipment, network 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 carriers that they have accessed or acquired, and to continue to undertake the obligation of confidentiality. 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 specifi - cally agree on a confidentiality 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 employ - er’s taking reasonable confidentiality measures. In a typical case, the Supreme People’s Court held that the accompanying obligation to keep secrets derived from the principle 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 taking confidentiality measures.
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