Trade secrets—China—Q&A guide

The following IP practice note provides comprehensive and up to date legal information covering:

  • Trade secrets—China—Q&A guide
  • 1. What legislation governs the protection of trade secrets in your jurisdiction? How is a ‘trade secret’ legally defined?
  • 2. How is ownership of a trade secret established?
  • 3. What criteria are used to establish the state of secrecy of a trade secret before misappropriation or disclosure?
  • 4. How is the commercial value of a trade secret established?
  • 5. What criteria are used to determine whether the rights holder has adopted reasonable protective measures to prevent disclosure and misappropriation of trade secrets?
  • 6. What best practices and internal policies should rights holders consider to ensure maximum protection of their trade secrets?
  • 7. What constitutes misappropriation of trade secrets?
  • 8. Are any activities explicitly excluded from the scope of trade-secret misappropriation?
  • 9. How can the rights holder prove trade-secret misappropriation?
  • More...

Trade secrets—China—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to trade secrets in China published as part of the Lexology Getting the Deal Through series by Law Business Research (published: February 2021).

Authors: GEN Law—Jerry Xia

1. What legislation governs the protection of trade secrets in your jurisdiction? How is a ‘trade secret’ legally defined?

There is no unified trade secret law in China. Instead, there are several different laws and regulations governing trade secret protections. The most important of which is the Anti-Unfair Competition Law (AUCL), which was first promulgated in 1993 and was recently amended in 2019. Additional aspects of trade secret protections and management are covered by other laws and regulations including the Criminal Law (defining the criminal thresholds for trade secrets violations), the Contract Law (providing technology licensing and trade secret protections in contract negotiations), the Labour Contract Law (defining confidentiality-related agreements), the Labour Law (creating liability for violating confidentiality-related agreements) and the Company Law (defining trade secrets obligations for senior management).

Under the AUCL, technical, business or other commercial information must meet the following criteria to qualify as a trade secret:

  1. it must not be known to the public;

  2. its confidentiality must be protected with proper measures; and

  3. it must have commercial value.

2. How is ownership of a trade secret established?

One may obtain ownership by research and development (R&D), licensing or

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