CHINA Trends and Developments Contributed by: Mitchell Liu (Liu Minxuan), AllBright Law Offices
in Hearing Civil Cases of Infringement upon Intellectual Property Right This interpretation provided detailed consideration factors for punitive damages to ensure the rules on puni - tive damages can be effectively cited in cases involving malicious infringers. • 2025 Interpretation of Supreme People’s Court and Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling of Criminal Cases of Intel- lectual Property Infringement: This interpreta - tion consolidated the existing interpretations of Supreme People’s Court and Supreme People’s Procuratorate concerning criminal cases of intellectual property infringement with polished texts and new articles on details. 2. Breakthroughs in judicial practices (1) Criminal measures as a “sword” to deter infringement In 2023, Chinese public security authorities saw a 65% year-on-year surge in criminal trade secret cases, with 60% involving high-tech sectors. This reflected strengthened criminal enforce - ment. From 2023 to 2024, my team successfully handled five such cases. Previously, filing such cases faced hurdles, but prosecutors and police departments now streamline processes through guidelines, such as easing evidentiary burdens. However, legal complexities persist in defining trade secret content, proving infringement and calculating losses. Employee mobility, mergers and technical collaborations often trigger trade secret “traps” . Exemplary case 1: In a case involving Company Y and defendants Zhang and Li, former employ - ees illicitly obtained technical blueprints from Company M and joined Company Y. The court sentenced Li to 4.5 years’ imprisonment and a CNY100,000 fine, while Company Y was fined
CNY4 million – the highest penalty of its kind at the time. Exemplary case 2: My team defended a defend- ant in Shanghai’s first free-trade zone trade secret case involving fuel nozzle technology. The 2.5-year litigation required six rounds of foren - sics and five defence submissions. Through rigorous legal analysis, the defendant avoided imprisonment. (2) Balancing employee mobility and trade secret protection While criminal protections help enterprises recover losses and deter unfair competition, start-ups and skilled employees increasingly seek clarity on the boundary between trade secrets and employee expertise. In a case involving Company X’s IPO, the overlapping of technical personnel with a competitor sparked disputes. Detailed analysis of R&D histories dis - tinguished Company X’s innovations from the competitor’s secrets, enabling employees to leverage their skills lawfully. (3) Implementation of punitive damages Post-2019 amendments, civil trade secret cases allow punitive damages (2-5x actual losses or illicit gains) for malicious acts. In a landmark case, China’s Supreme Court applied 2x punitive damages in a dispute between two auto makers over electric vehicle chassis technology, award - ing a record CNY640 million in damages. The ruling also set precedents for injunctive relief and penalties for non-compliance. Part III: Ongoing Challenges and Legislative Needs in China’s Trade Secret Protection In judicial practice, various issues and debates still arise, needing further clarification and reso - lution at the legislative level. I share the following contentions for readers to think about.
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