AUCL Article 32 Burden Shift

Evidentiary Threshold

Procedural requirements for triggering the shift begin with the plaintiff establishing a prima facie case that their secret has been misappropriated. The rights holder must show that the information is not known to the public, has commercial value and has been protected by reasonable secrecy measures. Once these three pillars are confirmed, the plaintiff only needs to show that the defendant’s product or process is substantially similar and that there was a realistic opportunity for access.

This lower initial hurdle reflects the reality that trade secrets are often stolen through covert means that leave little direct evidence. The court then looks at the circumstantial evidence, such as the movement of key employees or the sudden appearance of a competing product with identical features. If the plaintiff meets this standard, the burden of proof moves to the defendant.

This prevents defendants from simply remaining silent and forcing the plaintiff to find impossible proof.

Defense Requirement

Operational burden on the defendant involves proving that the information was acquired through legitimate means such as independent development or reverse engineering. The defendant must produce detailed logs, research notes and financial records that show a parallel path of creation that did not involve the plaintiff’s secret. This requirement is rigorous, as the court will scrutinize the timeline and the technical feasibility of the defendant’s claims.

If the defendant claims reverse engineering, they must prove they had a legal version of the product and the technical capability to disassemble it. Failure to provide a convincing explanation results in a judicial presumption that the misappropriation occurred. This mechanism forces the disclosure of the defendant’s internal processes, which acts as a powerful deterrent against the use of stolen data.

The defendant’s inability to provide this proof often leads to an immediate injunction and the assessment of damages.

Remedial Impact

Judicial outcomes under the burden shift tend to favor the rights holder more frequently than under the previous legal regime. By forcing the defendant to account for their technical choices, the law makes it much harder to hide the use of stolen intellectual property. This procedural advantage is particularly important for foreign firms that may lack the local investigative resources to track the internal movements of a Chinese competitor.

The shift also applies to preliminary injunction hearings, where the court can stop the use of the secret before a final judgment is reached. This provides an immediate remedy that preserves the commercial value of the information while the trial proceeds. The overall effect is a more balanced legal environment where the difficulty of proving secrecy is acknowledged.

Effective litigation strategy now focuses on the strength of the initial evidence to ensure the shift is triggered as early as possible.