Trade Secrets 2025

CHINA Law and Practice Contributed by: Chuanhong Long, Ji Liu and Xiao Jin, CCPIT Patent and Trademark Law Office

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. 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 mod - ules, whereby each module is developed by dif - ferent personnel, so as to avoid the developer mastering all the source code as much as pos - sible. Another example is in the field of chemis - try, 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 depart - ing personnel 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 termina - tion certificate, if possible, acknowledging the employee’s understanding and duty not to disclose trade secrets or confidential informa - tion; • obtaining trade secret materials and docu - ments in the employee’s possession or con - trol, 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 “employee’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 employ - ment finishes, the employer will enter into a non- compete agreement with the employee, requir - ing 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.

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