Article 32 AUCL

Evidentiary Shift

The practical execution of this statutory rule requires the trade secret holder to produce prima facie evidence of three specific factual circumstances. First, the claimant must demonstrate that the information in question meets the statutory definition of a trade secret, which requires showing that the information has commercial value, is not known to the public, and has been subjected to reasonable confidentiality measures. Second, the plaintiff must present evidence that the defendant had access to the secret, or that the defendant’s products or processes are substantially similar to the protected information.

Third, the plaintiff must show a realistic probability that the secret has been used or disclosed without authorization. Once these preliminary facts are established, the burden shifts to the defendant to prove that the information is either generally known, was obtained through independent development, or was acquired through reverse engineering of publicly available products. This shift prevents defendants from remaining silent or relying on general denials during the initial discovery phase, which is particularly vital in manufacturing sectors where manufacturing methods are kept behind closed factory walls.

Burden Allocation

In the administrative and judicial enforcement of trade secret protections across China, the application of this provision has significantly influenced litigation strategies for both domestic and foreign corporations. The Supreme People’s Court has issued several judicial interpretations that clarify the standard of proof required to trigger the shifting mechanism under article 32 aucl. In these interpretations, the court defines the level of similarity required between the plaintiff’s trade secret and the defendant’s product, establishing that minor modifications or cosmetic differences do not shield a defendant from the obligation to prove a lawful source.

The administrative authorities, such as the local Administrations for Market Regulation, also reference this standard during investigation procedures when seizing suspected infringing equipment or documentation. In cases involving complex manufacturing processes, the use of judicial forensic appraisals is frequently combined with this burden-shifting rule to determine whether a defendant’s technical files were derived from the plaintiff’s designs. Consequently, the rule forces defendants to maintain detailed, contemporaneous records of their research and development activities to defend against claims of misappropriation.

Procedural Boundary

The protective limit of this legal shift is reached when a plaintiff attempts to use the rule to conduct fishing expeditions without providing substantial initial evidence of their own protective measures. Under Chinese judicial practice, courts will refuse to shift the burden of proof if the plaintiff’s evidence of confidentiality measures is deemed superficial or inadequate. For instance, merely signing a generic non-disclosure agreement with employees without implementing physical or digital access controls may be judged insufficient to trigger the shift.

Furthermore, the defendant’s counter-proof must meet a high standard of credibility, often requiring third-party audit reports or verifiable laboratory notebooks that predate the alleged infringement. If the defendant successfully presents evidence of independent creation, the burden of proving infringement returns to the plaintiff, who must then demonstrate that the defendant’s evidence is fabricated or irrelevant. This back-and-forth allocation ensures that the shifting mechanism does not become an instrument for anti-competitive harassment against legitimate innovators.