CHINA – BEIJING Trends and Developments Contributed by: Ye Zhao, Zhanjiang Zhang and Qiang Ma, Jingtian & Gongcheng
China’s Trade Secret Protection: Key Cases and Judicial Innovations in 2024 In 2024, China saw notable advancements in trade secret protection, reflecting increased business demands for enhanced safeguards against misappropriation. These developments encompass significant legislative reforms, more rigorous administrative enforcement, and, most prominently, groundbreaking judicial decisions, collectively reshaping the litigation landscape and substantially improving the position of trade secret holders. Legislative amendments to the Anti-Unfair Com - petition Law (AUCL) entered the review stage at the National People’s Congress. A key pro - vision in the proposed amendments doubles the statutory minimum penalty for trade secret infringement, raising it from RMB500,000 to RMB1 million. This adjustment highlights China’s clear legislative intent to strengthen the deter - rent effects of administrative sanctions against trade secret misappropriation. Administratively, Chinese enforcement authori - ties have intensified their efforts to combat unfair competition. As of October 2024, enforcement bodies nationwide had investigated a total of 11,036 unfair competition cases, including 120 specifically concerning trade secret infringe - ments. The cumulative fines imposed in these cases amounted to RMB35.05 million, under - scoring a significantly more active regulatory stance than in previous years. However, the most transformative changes in trade secret protection emerged from the judi - cial arena. Historically, plaintiffs in trade secret civil litigation in China have experienced excep - tionally low success rates. According to statis - tics previously released by the Beijing Intellec - tual Property Court, between 2021 and October
2023, plaintiffs prevailed in only approximately 15% of all trade secret cases adjudicated by the court. This success rate is notably lower com - pared to the United States, where plaintiffs in trade secret cases win approximately 85% of the time. It is also significantly below the success rate of approximately 65% observed in Chinese patent infringement litigation. Recognising this challenge, in 2024, the Supreme People’s Court (SPC) issued a series of landmark decisions to reshape litigation prac - tices for trade secret disputes. Notably, in Feb - ruary 2024, the SPC published 100 landmark intellectual property cases, 21 of which directly addressed trade secrets. Remarkably, plaintiffs prevailed in all these trade secret cases. Through these decisions, the SPC sought to fundamen - tally revise substantive legal standards and pro - cedural rules, substantially enhancing plaintiffs’ prospects of success in trade secret litigation. It is worth noting that although the Chinese legal system is not a case law system, the cases issued by the SPC as guiding cases have bind - ing effects on lower courts in future cases. Although statistical data on plaintiff success rates following these landmark rulings is not yet available, the number of trade secret-related lawsuits has noticeably increased, indicating that these judicial adjustments have profoundly influenced the litigation landscape. This article comprehensively examines the key legal and procedural rules established by the SPC through these landmark decisions, addressing critical issues such as the scope of trade secret protection, the required elements for securing protection, rules governing dam - ages, and evidentiary standards.
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