Cross-Border Licensing Baseline Mechanics under PRC Civil Code Provisions
PRC Civil Code technology licensing hinges on explicit title warranties, MOFCOM TIER recordation for SAFE exchange, and compliance with Article 850 rules.
PRC Civil Code Article 875
Meaning
Regulating post-contractual confidentiality obligations and non-disclosure duties ensures secrecy protection for technical trade secrets transferred between commercial entities. Applying prc civil code article 875 mandates that parties to a technology contract must observe strict confidentiality obligations regarding undisclosed technical secrets obtained during negotiations or contract execution. The statutory duty binds both transferors and transferees regardless of whether the overall contract later terminates or expires.
Its reach excludes technical information that enters the public domain without contract breach.
Confidentiality Duty
Statutory non-disclosure standards safeguard proprietary technical knowledge from unauthorized disclosure or commercial misuse. Under prc civil code article 875, parties must implement reasonable security measures to protect confidential trade secrets received during technical collaborations. The receiving party cannot disclose proprietary software code, chemical formulas, or manufacturing parameters to third parties without prior written authorization.
Employees and third-party contractors handling target technical secrets must sign enforceable non-disclosure agreements aligned with statutory mandates. Breaching non-disclosure duties generates statutory liability for economic damages caused by secret exposure.
Duration Boundary
Confidentiality duties survive the natural termination or expiration of underlying commercial contracts. Requirements under prc civil code article 875 maintain non-disclosure obligations until target technical secrets enter the public domain through lawful means. Contracting parties can define specific secrecy timeframes, but courts invalidate clauses that attempt to end confidentiality while technical secrets remain non-public.
Loss of secrecy through public disclosure terminates statutory confidentiality obligations automatically.
Remedy Mechanism
Breaches of statutory non-disclosure obligations entitle injured parties to seek immediate judicial injunctions and monetary damages. Courts calculate financial compensation based on actual economic losses or illegal profits earned by the breaching party. Statutory remedies provide baseline protection when contractual penalty clauses are omitted.