CHINA – BEIJING Trends and Developments Contributed by: Ye Zhao, Zhanjiang Zhang and Qiang Ma, Jingtian & Gongcheng
Retrospective application of revised evidentiary rules
plaintiffs to benefit from this procedural advan - tage. Presumption of comprehensive infringement Under conventional evidentiary rules, plain - tiffs bear the burden of proving the scope and extent of infringement. If the plaintiff can dem - onstrate infringement regarding only a portion of the defendant’s products or processes, the defendant is typically liable only for that specific portion. The SPC significantly modified this principle in the landmark Vanillin case (2020, SPC IP Divi - sion No 1667). In this case, the trial court initially determined that only a portion of the defend - ants’ products infringed upon the plaintiff’s trade secrets. However, upon review, the SPC recog - nised minor differences between the accused products and the plaintiff’s protected technol - ogy regarding specific production processes and equipment. Despite these differences, the SPC concluded that the defendants had failed to present cred - ible evidence of their independent research and development efforts and their ability to quickly establish and operate a production line for vanil - lin. The court determined that these differences were merely evasive or adaptive modifications made intentionally after the defendants acquired the plaintiff’s confidential information. As a result, the SPC inferred that the defendants effectively used all equipment and process diagrams that had been unlawfully obtained from the plaintiff, ultimately ruling that the entire product line was infringing. Trade secret does not have to be recorded in tangible media Generally, trade secrets must be stored or recorded on specific tangible media, such as
The 2019 amendment to China’s Anti-Unfair Competition Law introduced a rule shifting the burden of proof in trade secret litigation. Under this new approach, once the rights holder suc - cessfully: • demonstrate the existence of a trade secret; • establishes substantial similarity between the defendant’s product and the protected information; and • shows that the defendant had potential access to the trade secret, and then the bur - den of proof shifts to the defendant. In such a situation, if the defendant fails to pro - vide evidence establishing a legitimate source for its use of the information, the defendant will be held liable for trade secret infringement. Although the reversed burden of proof was a new measure introduced in the 2019 AUCL, according to the principle of non-retroactivity, this provision ordinarily would not apply to acts committed before the amendment’s effective date. However, in the landmark Adjustable Roller Skates case (2022 SPC IP Division No 1981), the SPC ruled that Article 32 of the 2019 AUCL has both substantive and procedural character - istics and was explicitly intended to strengthen protections afforded to trade secret holders. Thus, the SPC determined that this provision constitutes an exception to the non-retroactivity principle under China’s Legislation Law. Moreo - ver, the SPC emphasised that courts retain dis - cretion regarding the distribution of evidentiary burdens. Consequently, courts may apply Article 32 of the amended 2019 AUCL to trade secret infringement disputes arising from acts commit - ted before the law’s revision, thereby allowing
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