65 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 WWW.LEGALBUSINESSONLINE.COM/CHINA Technology Co., Ltd. was the defendant, the Supreme People’s Court, upon hearing, held that: as the product is physically out of the control of the right holder, the internal confidentiality measures taken by the right holder shall not be considered the “corresponding confidentiality measures” as described in the Anti-unfair Competition Law. The Equipment Purchase and Sales Contract signed between the parties to the case and persons not involved in the case shall not be binding on the unspecified third party and shall not restrict customers from disposing or transferring the purchased products. The labels stuck on the product only served as a reminder of safety and product warranty and did not reflect Sike Company’s intention of keeping confidential. Therefore, none of the aforesaid measures shall be considered “the corresponding confidentiality measures” as described in the Anti-unfair Competition Law. It shall be noted that even if the right holder unilaterally makes declaration of the technical secrets on the labels and prohibits others from dismantling the product, it still shall not be considered physical confidentiality measures against reverse engineering by others. (ii) Keeping vigilance against invalid confidentiality measures for trade secrets Businesses shall specify the scope of information protected as a trade secret, that is, the object of confidentiality, and shall not use such expressions as “business secret” or “technical secret” in the confidentiality system to avoid invalidation of the confidentiality measures. Also, neither general non-competition provisions nor senior executives’ statutory duty of loyalty and diligence shall reflect the employer’s subjective intention to take confidentiality measures for the claimed confidentiality objects, and therefore neither shall be considered the confidentiality measures as described in the Anti-unfair Competition Law. With regard to the case7 of dispute over trade secret infringement where Tangshan Yulian Industrial Co., Ltd was the plaintiff and Yuantian Kelian Industrial Co., Ltd. and Yu Baokuai were the defendants, Several Provisions on Confidentiality Work laid down by the plaintiff only put forward requirements in principle and was unable to let the target objects of the provision, that is, all the employees of the company, know the scope of the information protected as a trade secret; Regulations on Sales Management and Statement of Liability for Marketing Service were merely non-competition agreements and did not specify the subjective wishes of the employer in keeping confidential or the scope of information protected as a trade secret; Labor Contract Agreement was a template contract provided by the Department of Human Resources and Social Security. Therefore, the court ruled that the above measures could not be considered the confidentiality measures as described in the Anti-unfair Competition Law. With regard to the case8 of dispute over technical secret infringement where Bluestar Trading Corp., Nantong Zhonglan Engineering Plastics Co., Ltd. and Nantong Star Synthetic Materials Co., Ltd. were the plaintiffs and Nantong Wangmao Industrial Co., Ltd. was the defendant, the Supreme People’s Court made it clear that senior executives’ statutory duty of loyalty and diligence shall not be considered confidentiality measures, as it could not fully reflect the subjective wishes and positive attitudes of the right holder in taking confidentiality measures for the objects of confidentiality claimed by the right holder. III. Allocation of Burden of Proof Progressive examination of two links, namely, whether or not the trade secret is established and whether or not the infringement on the trade secret is established, shall have gone through to determine the act of trade secret infringement. The determination of the burden of proof in trade secret cases shall also revolve around the above two links. (i) Allocation of burden of proof for determining trade secret “Whoever claims shall bear the burden of proof” has been a general principle in civil burden of proof. Burden of proof for trade secret infringement is specially provided in the Article 32 of the Anti-unfair Competition Law to ensure the balance of interests. It is the plaintiff’s duty to provide prima facie evidence to prove that he has taken confidentiality measures and that the trade secret has been infringed upon, then the defendant has the duty to proof that it is not a trade secret. With regard to the case9 of dispute over trade secret infringement where Shenzhen Hengshi Amber Jewelry 7 Supreme People’s Court (2017) SPC Min Sheng No.2964 Paper of Civil Ruling 8 Supreme People’s Court (2017) SPC Min Sheng No.1602 Paper of Civil Ruling 9 Shenzhen Municipal Intermediary People’s Court (2020) Yue 03 Min Zhong No.25614 Paper of Civil Judgement
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