CHINA Law and Practice Contributed by: Chuanhong Long, Ji Liu and Xiao Jin, CCPIT Patent and Trademark Law Office
shall determine that it is not an act of infringing trade secrets as stipulated in Article 9 of the Anti-Unfair Competition Law; and (b) the term “reverse engineering” , as mentioned in the preceding paragraph, refers to the disassembly, surveying and analysis of products obtained from public channels, through technical means, in order to obtain relevant technical informa - tion about the products. • Client trust defence: (a) paragraph 2 of Article 13 of the judicial interpretation of unfair competition – if a client enters into market transactions with an employee’s company based on per - sonal trust in the employee and, follow - ing the employee’s departure, voluntarily chooses to transact with the employee or with a new entity established or joined by the employee, such conduct shall not be regarded as improper means,unless otherwise agreed between the employee and the original employer; and (b) paragraph 2 of Article 2 of the judicial interpretation of trade secrets – if a client enters into market transactions with an employee’s company based on personal trust in the employee and, following the employee’s departure, the employee can prove that the client voluntarily chose to transact with the employee personally or with a new entity established or joined by the employee, the people’s court shall determine that the employee has not used improper means to obtain the trade secret of the right-holder. 5.10 Dispositive Motions There are no procedures relating to dispositive motions in China’s civil litigation framework. However, as is the current trend, before enter -
ing a formal proceeding, the parties can directly conduct a mediation, and the court may also preside over the mediation. If a settlement is reached between both parties, the court can make a mediation statement accordingly, which has legal effect. 5.11 Cost of Litigation For trade secret litigation, the attorney fees usu - ally range from hundreds of thousands to mil - lions of yuan depending on the difficulty of the case. For example, in the “Vanillin” case recently heard by the Supreme People’s Court, the court supported a reasonable fee of CNY3.5 million for rights protection. The defendant may be liable for compensatory and punitive damages, as well as the plaintiff’s reasonable expenses for rights protection, such as attorney fees and notarisa - tion, translation and appraisal costs. In China, intellectual property infringement insur - ance is allowed for civil cases. As for litigation financing or third-party funding, there is current - ly no clear determination of whether it is legal or not, but litigation financing already exists in practice. There is no jury fact-finding procedure in Chi - na. China adopts a unique system of people’s assessors. In some cases, people’s assessors can participate in the trial of cases. People’s assessors have the same rights and obligations as judges. 6.2 Trial Process In China, there is no difference between the trial of trade secret cases and the trial of general civil cases, except that trade secret cases are usually 6. Trial 6.1 Bench or Jury Trial
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