Meaning
Legal framework in China that prohibits the unauthorized acquisition, use or disclosure of confidential business information. The trade secret protection anti-unfair competition law provides the statutory basis for companies to sue former employees or competitors for the theft of proprietary data. It defines the specific conditions under which information is considered a protected secret.
Protection Scope
Information must have commercial value and be kept confidential through reasonable security measures. Under the trade secret protection anti-unfair competition law, technical formulas and customer lists are frequently the subject of litigation. The law was recently amended to increase the maximum fines and allow for punitive damages in cases of intentional infringement.
Burden Proof
Plaintiffs must demonstrate that the information was not public knowledge and that they took active steps to protect it. The trade secret protection anti-unfair competition law allows for a shift in the burden of proof once the plaintiff provides preliminary evidence of a violation. This makes it easier for companies to pursue claims even when the actual theft is difficult to document.
Statutory Remedy
Courts can issue injunctions to stop the use of stolen information and award compensation based on the losses suffered by the owner. The trade secret protection anti-unfair competition law also coordinates with the criminal code for the most severe cases of industrial espionage. Consistent enforcement of these rules is a key part of the national strategy to encourage domestic innovation and protect foreign investment.
