It is essential to take practical measures to counter internal and external threats, so as to protect your trade secrets. Such measures include but are not limited to the following: Firstly, it is advisable to have controlled access to your working premises, to your computers and IT systems, and to your documents, soft or hard copies. Secondly, protective measures towards employees are essential. For example, a written employment contract with provisions to protect trade secrets, internal trade secrets policies and awareness trainings, lawful surveillance of employee activities could be applied. Thirdly, when faced with (potential) business partners, it is also beneficial to do your due diligence and conclude contracts of relevance with provisions to protect trade secrets.
In case that your legitimate trade secrets are violated, the following remedial measures could be considered based on the specific situations: apply for arbitration according to the existing arbitration agreement, apply for labor arbitration if the infringement is from employees, file a complaint to administrative departments of industry and commerce, file a civil lawsuit, or initiate criminal proceedings. There are legal regulations in China on protection of trade secrets.
It is worth mentioning that the 2019 amendments to the Anti-Unfair Competition Law of China have focused on and enhanced protection of trade secrets:
- The definition of "trade secrets" is expanded from "technical or operational information" to "technical, operational or other commercial information". Therefore, the protection is not limited to "technical and operational information".
- Infringing acts are expanded to include electronic intrusion, violation of confidentiality obligation (in addition to requirements from the obligee), and instigating, tempting or aiding others.
- The responsible parties for infringement are expanded to include "other natural persons, legal persons and unincorporated organizations", other than the business operators.
- The amount for compensation and fines has increased to maximum RMB 5,000,000 (used to be RMB 3,000,000); punitive damages of 1 to 5 times of the actual loss of the infringed or the benefits obtained by the infringer are introduced.
- In civil trails, burden of proof on the alleged infringer is increased. If preliminary proof is provided by the obligee, burden of proof is shifted to the alleged infringer to prove that the claimed trade secrets do not fall with the scope provided by the law, or there is no infringement.
Provided by VISCHER law and tax, Yao Qinqin
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