Reinforced trade secret protection

Reinforced trade secret protection

China further improved the trade secret administrative protection mechanism in 2022. On 22 November 2022, the State Administration for Market Regulation (SAMR) released a draft amendment of the Anti-Unfair Competition Law (Bill of Amendment, Draft for Comment), in which:

    • The fine against serious trade secret infringements changed from RMB500,000 (USD72,640) to RMB5 million, to the current RMB1 million to RMB5 million; and
    • The threshold for administrative enforcement actions was adjusted to align with that for civil actions.

Following the release of the Work Plan for the National Pilot Programme for the Innovative Protection of Trade Secrets, on 2 March 2022, the SAMR selected 20 cities and districts across the nation to carry out the pilot trade secrets innovative protection programme by improving trade secret protection regulations and rules, optimising working mechanisms for trade secret protection, and strengthening trade secret administrative enforcement.

The pilot cities and districts include the Haidian district of Beijing, Pudong new district of Shanghai, Suzhou, Ningbo, Wuhan, Changsha, Huangpu district of Guangzhou, and Nanshan district of Shenzhen.

On civil litigation, the Supreme People’s Court (SPC) continued to focus on setting up guidelines in its tried cases by clarifying trade secrets protection issues in 2022. Two trade secrets misappropriation cases were selected as model cases on 17 November 2022.

In Beijing Gendone v Shijiazhuang Zexing and Hebei Daxiao (2020), the SPC clarified that the counterparty would still have a statutory confidentiality obligation after the contractual confidentiality period expired.

In Actions Tech v Peng & Zhuhai Taixin (2020), the SPC granted a preliminary injunction while sending the case back for retrial, thereby providing prompt and effective protection for related trade secrets.