CHINA Law and Practice Contributed by: Chuanhong Long, Ji Liu and Xiao Jin, CCPIT Patent and Trademark Law Office
4.2 New Employees A new employer should strictly manage the employment of employees hired from competi - tors 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-com - pete 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 carefully, fully investi - gate the actual performance of such employee, and require such employee to promise not to use the trade secrets of the previous employer in the course of their work. At the same time, most importantly, the new employer should preserve and archive relevant evidence, such as keeping all the materials proving that it obtained the trade secrets of others through lawful means, such as reverse engineering. 5. Trade Secret Litigation 5.1 Prerequisites to Filing a Lawsuit Since there is no discovery in the civil procedure in China, the plaintiff should collect evidence, including evidence of infringement and damage, before filing a lawsuit. To file a lawsuit for infringement of trade secrets, the following work should be done: • determining the parties of the lawsuit – ie, the plaintiff and the defendant; • determining the court of jurisdiction: territorial and level jurisdiction, distinguishing between technical and business information;
• carrying out necessary preservation, including evidence and conduct preservation; • determining the scope of trade secrets; • determining the constituent elements of trade secrets, ie, not being known to the public, having commercial value and taking corre - sponding confidentiality measures; • identifying basic types and scope of infringe - ment acts; and • determining the litigation claims and the type of civil liability, eg, stop the infringement, compensate for losses, return or destroy the trade secret carrier, remove the trade secret The statute of limitations does not apply to claims for cessation of the infringement of trade secrets; for claims for damages from infringe - ment, the limitation period begins when the right-holder knows or should have known the scope of infringement, the infringer and the infringing acts. In principle, the limitation period is three years, but shall not exceed 20 years from the date of infringement. At the same time, trade secret cases, like other civil cases, are subject to the relevant provisions on the suspension and interruption of the limitation of action. 5.3 Initiating a Lawsuit As mentioned above, in China, there is no discov - ery in the civil procedure. Therefore, after collect - ing the evidence and finishing other preparations (see 5.1 Prerequisites to Filing a Lawsuit ), the plaintiff should file a lawsuit with the court. Gen - erally, after accepting a case, the court will give both parties a time limit for producing evidence, and then organise evidence exchange and a pre-trial conference. Furthermore, the court will organise at least one formal trial before reach - ing a conclusion. Trade secret litigation cases also often involve forensic appraisal, such as information in possession. 5.2 Limitations Period
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