Causes and solutions to difficulties in protecting trade secrets

In commercial activities, civil subjects may face the risk of trade secret leaks by ex-employees, hackers and partners, and valuable trade secrets can be abused to undercut their competitiveness. Not all secrets are protected by the law. “Trade secrets” mentioned in the Law Against Unfair Competition refer to any technology information or business operation information that is unknown to the public, that can bring about economic benefits to the owner, that has practical utility and that the owner has adopted appropriate measures to protect.

In practice, it is difficult to safeguard the rights to trade secrets, as evidenced by the imbalance between rampant infringements and the relatively small number of legally settled cases, the low winning rate of plaintiffs, and insufficient compensation to damage caused by trade secrets theft.

There were only 37 cases of trade secret infringement crimes in 2014. The number of patent cases tried by the Supreme People’s Court was 227 in 2016, but only 12 were related to trade secret infringement. A study shows that plaintiffs in trade secret infringement cases are much less likely to win a lawsuit than victims in other intellectual property infringement cases.

Author: Wang Yadong is a partner and Lu Lei is a senior attorney at Rui Bai Law Firm