CHINA Trends and Developments Contributed by: Mitchell Liu (Liu Minxuan), AllBright Law Offices
China’s Practice of Trade Secret Protection: Invisible Armour for Innovators and Guardians of the Rule of Law Protection of trade secrets is never easy, espe - cially in today’s China, where innovation is booming and calling for more comprehensive trade secret protection. In this article, I will first - ly explain the importance of judicial practice in China’s trade secret protection, then I will share some of my constructive thoughts on today’s judicial practices. After this, I provide a summary of my team’s innovative five-dimensional trade secret protection system for corporates and 42 practice scenarios for our own benefit. My team is ready to offer five-dimensional trade secret protection system implementation services as well as all other IP legal services to innovators. Part I: Why is Trade Secret Protection So Vital for Innovation in China? A tech company’s core technical blueprints are stolen by competitors, a new drug’s R&D data is leaked by insiders, an e-commerce platform’s core user profiles are illegally replicated... these crises, seemingly distant from daily operation, unfold daily on China’s commercial battleground. Trade secrets, these invisible yet invaluable “intangible assets” , have become the lifeline for corporate survival and growth in the era of digital economy. They are not only the core assets of giants like Apple and Huawei but also the “secret weapon” for SMEs to break through into the established markets. The mission of my team “to guide and pave the way for innovators on the path of intellectual property; to promote fair competition and protect genuine innovators” resonates deeply within this context. We recog - nise that every trade secret case not only deter - mines a company’s survival but also impacts the nation’s innovation ecosystem. Trade secret pro -
tection embodies China’s strategic commitment to “innovation-driven development” . As demonstrated in criminal trade secret cas - es handled by my team, we have successfully defended trade secret holders, cracked down on egregious criminal acts, and provided defence for criminal suspects to ensure proper sentenc - ing or even exoneration. In the realm of intellec - tual property, we strive to define clear “red lines” for enterprises, employees and genuine innova - tors, fostering true and fair competition. What we have done and keep doing ensures innovation is neither burdened by infringement nor hindered by legal ambiguity. Part II: The Development of Judicial Practices in China’s Trade Secret Protection 1. Evolution in legal rules: from “no law to follow” to “multi-layered protection matrix” • 2019 Anti-Unfair Competition Law: This law raised the statutory compensation ceiling for trade secret infringements to CNY5 million and introduced punitive damages (up to five times the actual loss or illicit gains), imposing ruinous costs on malicious infringers. • 2020 Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases Involving Trade Secret Infringement: These provisions clarified the standards for iden - tifying new types of trade secrets, such as electronic data and algorithms, and provided more applicable guidelines on identifying unlawful means. • 2020 Criminal Law Amendment (XI): This amendment added the crime of “stealing from, spying on, bribing for, or illegally provid- ing trade secrets to foreign entities” , targeting cross-border commercial espionage. • 2021 Interpretation of Supreme People’s Court on the Application of Punitive Damages
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