● Algorithms, data come under definition of trade secrets
● Client info not collated or processed not recognized as trade secret
● Requirements to request injunction specified
The draft judicial interpretation (JI) on trade secrets released by
China’s Supreme People’s Court lightens the burden of proof for
plaintiffs in trade secret infringement lawsuits, two IP lawyers
The draft – Interpretation on Several Issues
Application of Law in the Trial of Civil Cases Infringing on Trade
Secret Infringements (draft for comment) – was released on 10 June and
is soliciting public comment until 27 July.
Compared with Article 32 of the country’s amended Anti-Unfair
Competition Law (AUCL), the draft lightens rights-holder’s legal duty
by shifting the burden of proof to the alleged infringer, Xu Xinming, chief lawyer at ciplawyer.com, told PaRR.
32 of the amended AUCL states that in civil trade secrets infringement
trial, the rights-holder needs to provide “preliminary evidence” to show
the claimed trade secret has been infringed. When the rights-holder
provides such proof, the alleged infringer is obliged to provide proof
that no infringement of trade secrets occurred.
Article 8 of the draft JI states that the rights-holder
need only submit preliminary evidence to prove there is a “high
probability” that the claimed trade secret has been infringed in order
to shift the burden to the alleged infringer.
Wen, partner at Anjie Law Firm, agreed the draft JI lowers
rights-holder’s burden of proof, yet noted that the draft JI is more
ambiguous than Article 32 of the amended AUCL.
there is no quantitative measurement of “a high probability that the
claimed trade secret has been infringed” and therefore it is hard to
execute in practice, Zou said.
Range of trade secrets
draft JI further specifies the range of trade secrets. The trade
secrets provision (Article 9) of the amended AUCL defines trade secrets
as any technical information or operational information which is not
known to the public, has commercial value, and for which its
rights-holder has adopted measures to ensure its confidentiality.
4 of the draft JI states that algorithms, data and computer programs
may constitute the technical information mentioned in Article 9 of the
Article 5 of the draft JI states that client
information after collation and processing, such as name, address,
contact information, trading habits, transaction content, and specific
needs of customers, may constitute the operational information mentioned
in Article 9 of the amended AUCL.
Notably, Article 5(2) of the draft JI states that if the parties claim
the information of a specific client is a trade secret only on the
basis of the contract, invoice, document, voucher, etc. or the existence
of a long-term transaction relationship, the court will not support
In other words, the court will not recognize client information unless it is collated or processed as trade secrets, Xu said.
addition, the clause does not specify what qualifies as “collation” and
“processing”, and it remains unclear whether the collation and
processing need to be “complicated and in-depth”, Xu added.
Article 5 asks rights-holders to act more proactively in protecting their trade secrets, Zou said.
21 of the draft JI states that to apply for an injunction, a
rights-holder must clarify specific content of the claimed trade secrets
and provide evidence to prove that corresponding measures have been
adopted to ensure its confidentiality.
The article sets a “relatively low burden of proof” for the rights- holder, which is consistent with the amended AUCL, Zou said.
it comes to evidence of infringement, it does not make a compulsory
requirement and leaves it to the discretion of the court, Zou added.
22 of the draft JI states that if the alleged infringer proves that the
information requested by the rights-holder is not a trade secret or
there is no infringement of trade secrets, the court shall nullify the
Considering the requirements to request an
relatively low, Article 22 of the draft JI aims to strike a balance and
prevent the over-protection of a rights-holder, Zou said.