Prevention of Infringement on Business Secrets in Foreign Investment

By Yi Zhou
RayYin & Partners P.R.C. Lawyers

As the dispute of Foxconn Versus BYD Company Limited is dramatically escalating from a civil case to a criminal case, we are coming to realize that infringement on business secrets are seemingly on the increase. While multinational companies are getting returns from their booming businesses in China, some of them are also suffering huge losses from the infringement of business secrets. This article deals with identification of certain important issues on infringement of business secrets and making suggestions to foreign investors.

Composition of the crime

As far as the crime of violating business secrets is concerned, four factors must be taken into consideration: the wrongdoer conducted activities which infringed the rightful owner's business secrets; the rightful owner suffered certain losses; the wrongdoer is a full capable person; and the wrongdoer knowingly or ought to know he was infringing on business secrets.