China IPR – Intellectual Property Developments in China

Supreme People’s Court Releases Trade Secret JI

On September 11, 2020,the SPC released its trade secret JI on civil enforcement of trade secrets.  Here is a link to a Chinese text comparing the final version with the draft released for public comment.  The USPTO unofficial translation of the prior draft is available here.

While we wait for the translations and commentaries, Article 14, which is newly inserted, caught my eye:

“第十四条  通过自行开发研制或者反向工程获得被诉侵权信息的,人民法院应当认定不属于反不正当竞争法第九条规定的侵犯商业秘密行为。

 前款所称的反向工程,是指通过技术手段对从公开渠道取得的产品进行拆卸、测绘、分析等而获得该产品的有关技术信息。

被诉侵权人以不正当手段获取权利人的商业秘密后,又以反向工程为由主张未侵犯商业秘密的,人民法院不予支持.”

A rough translation is:

“14. When the alleged infringer obtains information developed its own R&D or through reverse engineering, the People’s Court shall determine that these are not violations of trade secrets pursuant to the provisions of Article IX of the Anti-Unfair Competition Law.

 Reverse engineering referred to in the preceding paragraph refers to the disassembly, mapping, analysis, etc. of products obtained from public channels through technical means to obtain relevant technical information of the product.

When the alleged infringer obtains the right holder’s business secrets by improper means, and thereafter claims that the business secrets have not been infringed on the grounds of reverse engineering, the People’s Court shall not support [this defense].”

This language replaces proposed Article 8: “Where the alleged infringer asserts that it has obtained the alleged infringing information by means of research and development, transferee, license, reverse engineering,
inheritance, etc., the alleged infringer shall provide evidences to prove so.”

The more thoughtful approach in this final text should reduce the viability of defenses based on changes to technology made by the alleged misappropriator which had subsequently given rise to overly broad reverse engineering defenses in China.  A similar case was presented in an earlier case: Chongqing Long Life Xinxieli Chemical Company Ltd vs. Hu Xiantang et al. (重庆长寿新协力化工有限公司等诉胡宪堂等侵犯商业秘密纠纷案). The court noted in that case that “the illegal obtaining of trade secrets and its subsequent modification still is a trade secret infringement.” (本院认为,首先,被告东荣公司通过非法手段获取了涉案商业秘密,不管其是直接实施还是略加改进后再实施,其行为的侵权本质并未改变。即非法获取并实施商业秘密是侵权行为,对非法获取的商业秘密进行改进同样是侵权行为。) (2010) 渝一中法民初字第00055号).  US law tends to focus on unauthorized access rather than use of the unauthorized information.  Adoption of this change may also bring China a step closer to US practice.