Protection of Information as Trade Secrets in China

Summary

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• The scope of potential trade secrets can be very broad, as both technical and business information can qualify as trade secrets.
• The general procedure and the simplified procedure are not mutually exclusive, and qualified enterprises may choose to apply either one depending on their own considerations and circumstances.
• Regarding confidentiality, the burden is on the alleged infringer to show that each asserted trade secret point was known to the public prior to when the alleged infringing actions took place.

The trade secrets law in China commenced in 1993 with the promulgation of the Anti-Unfair Competition Law (反不正当竞争法). With the economy in China driven by innovation, the importance of trade secrets protection has grown significantly. In the past a couple years, legislative and judicial actions have brought further clarification to the trade secrets regime, including the amendment to the Anti-Unfair Competition Law (2019), the issuance of judicial interpretations by the Supreme People's Court (SPC), and notable decisions by the SPC and various courts around the country.

Recent highlights associated with trade secrets protection include the SPC's decision in the Vanillin case (Jiangxing Zhonghua Chemical Engineering Co. Ltd. v. Wanglong Group Ltd. Co., Zui Gao Fa Zhi Min Zhong No. 1667 (2020)), where the SPC awarded RMB 159 million in damages for trade secret infringement, and the Liaocheng Intermediate People's Court's decision that recognized an arbitral award against Luxi Chemical Group of over RMB 750 million (Lu 15 Xie Wai Ren No. 1 (2019)).  The trade secrets law covers a broad range of topics including a fundamental issue in any trade secrets dispute, namely, what qualifies as trade secrets for protection, which will be the focus of this discussion.