Litigation strategies for data breach by service providers

This article examines a case in which the plaintiff, Shanghai Yelixiali Restaurants Management (YLXL), filed a lawsuit against the defendant, Beijing Beidazongheng Management Consultation (BDZH), and the third parties Xi’an Jiuzheyang Restaurants Management (JZY), Panfeng Qian and Xi’an Lianhu District Hongwei Beef Noodle Restaurant (HW Beef Noodle) on disputes regarding a technical service contract.

This case was a dispute over a technical service contract, and the subject matter was the final technical results as agreed in the contract. The attorneys of the plaintiff, referring to the determination of business secrets, had proved that the defendant breached the contract in the deposition and trial, and so the trial court rendered a judgment against the defendant.

The key person in the case was Qian, a senior executive of the defendant. He was already involved in restaurant investments before being put in charge of this project, and applied the consultation results to his own restaurants.

There are industrial and moral standards applicable to professional service providers, e.g. lawyers, accountants, investment bankers, yet there are no similar standards for consultants. Therefore, this case also encouraged people to think more about industrial and moral standards for consultation services.

Wang Hongyan (Grace) is a senior partner at L&H Law Firm. She can be contacted on +86 571 8720 6716 or by email at wanghy@liuhelaw.com