China IPR

Trade Secret Updates

From the Linkedin Chinese European Intellectual Property GroupCNet, the Taipei Times and other sources: six HTC employees have been indicted on the charge that they stole company secrets.  The employees, including a Vice President are alleged to have leaked phone designs with the goal of setting up a company in China and Taiwan.

It is interesting to speculate how this matter might be handled in China if Taiwan prosecutors had not stepped in and if Taiwan had not newly amended its trade secrets law to provide greater deterrence.  If HTC brought a civil action in China after its employees set up shop there, it would likely need to pursue the civil case in the jurisdiction where the misappropriation is actually being used, rather than where  products were sold (elsewhere in China), at least according to Article 10 of the Law to Counter Unfair Competition, which does not consider sale of an infringing product an act of trade secret infringement.  See Siwei v. Avery Dennison (Min San Zhong Zi No. 10/2007) (Sup. People’s Ct. 2009) (China).  Of course, if one is forced to bring a law suit in a place where there may be more employees associated with the actual misappropriation of use of the infringing information, there are also greater risks of local protectionism, the case is also less likely to succeed. 

In a separate trade secret development, proposed revisions to China’s Administrative Litigation Act provide for protection of trade secrets in administrative litigation, including their disclosure under court order.  See Articles 21 and 45 of the draft revision.


Categories: China IPR

1 reply »

  1. The OECD has recently published a 331 page study comparing trade secret regimes in different countries throughout the world. The study compares scope of the country’s definition of trade secrets and how its civil and criminal laws protect them; how it treats specific obligations for confidentiality in commercial and employment relationships, and otherwise establishes contractual rules for protecting secrets; civil and criminal remedies it has to enforce such rules, as well as restrictions on liability; enforcement, investigation and pre-trial data discovery, and how well confidentiality is protected during litigation; and system functioning and related regulation. The report was co-authored by a US academic.
    The report noted gave the United States a high score of 4.57, while China scored lowest at 2.52. See summary at Bloomberg:


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