63 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 WWW.LEGALBUSINESSONLINE.COM/CHINA Practical Guidelines for Trade Secret Litigation — From the Perspectives of Secrecy, Confidentiality and Allocation of Burden of Proof There is yet no special law for the regulation of trade secret in Chinese legal context. The definition of “trade secret” is adopted from that in Anti-unfair Competition Law of People’s Republic of China (hereinafter referred to as Anti-unfair Competition Law). Based on this background, the key to the trade secret litigation is revealed in the Article 91 and Article 322 of the Anti-unfair Competition Law. By means of empirical analysis, the paper proposes practical suggestions from the perspectives of secrecy, confidentiality and allocation of burden of proof of trade secret, for the reference of trade secret protection. I. Requisites of Secrecy Secrecy is the most fundamental and important characteristics of trade secrets. Secrecy means “unknown to the public”. Provisions of Supreme People’s Court on Several Issues Regarding Applicable Law for Trying Civil Cases of Trade Secret Infringement defines it as “not generally known or easily accessible by relevant personnel of respective field” in Article 3 and enumerates 5 circumstances of being known to the public in the Article 4. In addition to the circumstances explicitly stipulated by law, we also summarize three easily confused issues in practice. (i) Determination of secrecy of customer information The determination of the secrecy of customer information involves balance of various values, including the protection of trade secret, the protection of workers’ rights and interests and the freedom of trade, and is highly controversial in judicial practice. With regard to the CHAPTER 2 1 Anti-Unfair Competition Law of the People’s Republic of China (2019 Amendment) Article 9 A business shall not commit the following acts of infringing upon trade secrets: (1) Acquiring a trade secret from the right holder by theft, bribery, fraud, coercion, electronic intrusion, or any other illicit means. (2) Disclosing, using, or allowing another person to use a trade secret acquired from the right holder by any means as specified in the preceding subparagraph. (3) Disclosing, using, or allowing another person to use a trade secret in its possession, in violation of its confidentiality obligation or the requirements of the right holder for keeping the trade secret confidential. (4) Abetting a person, or tempting, or aiding a person into or in acquiring, disclosing, using, or allowing another person to use the trade secret of the right holder in violation of his or her non-disclosure obligation or the requirements of the right holder for keeping the trade secret confidential. An illegal act as set forth in the preceding paragraph committed by a natural person, legal person or unincorporated organization other than a business shall be treated as infringement of the trade secret. Where a third party knows or should have known that an employee or a former employee of the right holder of a trade secret or any other entity or individual has committed an illegal act as specified in paragraph 1 of this Article but still acquires, discloses, uses, or allows another person to use the trade secret, the third party shall be deemed to have infringed upon the trade secret. For the purpose of this Law, “trade secret” means technical, operational or other commercial information unknown to the public and is of commercial value for which the right holder has taken corresponding confidentiality measures. 2 Anti-Unfair Competition Law of the People’s Republic of China (2019 Amendment) Article 32 In the civil trial procedure for infringement of a trade secret, if the right holder of the trade secret provides prima facie evidence that it has taken confidentiality measures for the claimed trade secret and reasonably indicates that the trade secret has been infringed upon, the alleged tortfeasor shall prove that the trade secret claimed by the right holder is not a trade secret as described in this Law. If the right holder of a trade secret provides prima facie evidence to reasonably indicate that the trade secret has been infringed upon, and provide any of the following evidence, the alleged tortfeasor shall prove the absence of such infringement: (1) Evidence that the alleged tortfeasor has a channel or an opportunity to access the trade secret and that the information it uses is substantially the same as the trade secret. (2) Evidence that the trade secret has been disclosed or used, or is at risk of disclosure or use, by the alleged tortfeasor. (3) Evidence that the trade secret is otherwise infringed upon by the alleged tortfeasor.
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