Tag Archives: trade secret

Application of Laws on Non-Competition Clauses (Part I)

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(By Lisa Li) In accordance with relevant laws of People’s Republic of China (“PRC), judicial interpretation by PRC Supreme People’s Court, judicial interpretation by local Superior People’s Courts and local regulations and based on the author’s research into and analysis of over two dozens of litigation cases from Shanghai and Beijing etc, the author elaborates on the application of laws on non-competition clauses from the perspective of Chinese employment law practice. The following is Part I of this topic on application of laws on non-competition clauses.[1]

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First China Trade Secret Litigation Injunction Ends in Favor of Eli Lily and Company

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(By You Yunting) We have introduced that Shanghai court issued the first trade secret litigation injunction in China pursuant to the new Civil Procedure Law. Recent, Shanghai No. 1 Intermediate People’s Court made a judgment in favor of U.S. drug maker Eli Lily and Company and Eli Lily (China), determining that the defendant must cease infringing the trade secret of the plaintiff. In today’s post, we will introduce the abstract the judgment following with our comments.

Introduction to the Case:

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NOVARTIS Awarded Injunctive Relief in Trade Secret Action in China

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(By You Yunting) According to reports, in February 2014, Shanghai No.1 Intermediate People’s Court approved plaintiff NOVARTIS’s application requesting the court to order an injunction ruling so as to protect its legal rights and interests in a trade secret litigation.

According to reports, NOVARTIS claimed that the defendant should not disclosure, use or allow another party to use the 879 documents on its trade secret lists that shall keep secret.

For intellectual property infringement, China’s supreme People’s Court may also set a temporary injunction on judicial interpretations of the Patent Law, Trademark Law and Copyright Law; we have previously provided posts discussing related systems in other areas of intellectual property law, such as patent preliminary injunction, copyright injunction and litigation injunction. With regard to trade secrets, however, no particular injunction is set on judicial interpretations of the Anti Fair Competition Law.

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How to Protect Trade Secrets When a Shareholder want to Inquiry Company’s Account Book?

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(By You Yunting and Wang Ting) Pursuant to China’s Company Law, any shareholder shall be entitled to inspect and copy the Articles of association, minutes of shareholders’ meetings, resolutions of meetings of the board of directors, resolutions of meetings of the board of supervisors and financial reports of a company in which he or she owns shares. However, if a shareholder operates a business in competition with a company in which he or she owns stocks, then when exercising the shareholder’s right to information, such inspection may result in leaks of confidential business and trade secrets. In today’s post, we will introduce this conflict, and discuss ways in accordance with relevant Chinese laws to balance this conflict of interests while maintaining a shareholder’s right to information and a business’ right to protect its trade secrets.

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Could User Information Be Considered Trade Secret in China?

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Abstract: trade secret must have three basic features: confidentiality, practicability, and security. Therefore, whether user information in a website could be considered as trade secret or not, it shall also be judged based on these three basic features.

(By Luo Yanjie) User information is very important to a website daily operation. To judge it from the legal protection perspective, it is generally protected as a trade secret. The case introduced in this article is a typical dispute on whether the user information could be considered a trade secret, and thereby could infringement be decided.

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Can Employees’ Nondisclosure Warranty Letter Be A Confidential Measure in China?

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Abstract

(By Albert Chen) According to the Anti Unfair Competition Law, one of the conditions required for something to constitute a trade secret is whether sufficient measures have been taken for such information to remain confidential. In practice, apart from an NDA (Non Disclosure Agreement), other confidential articles that explicitly indicate the inclusion of remuneration for confidentiality in an employee’s pay, as well as written warranties issued by an employee can both be considered confidential measures in law sufficient to properly maintain a trade secret.

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How to Infer the Trade Secret Disclosure by Original Staffs in China?

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Abstract

(By Albert Chen) How to demonstrate one’s original employee has presented the trade secret gained during his/her service to the new employer, who thereafter makes benefit of it? As no direct evidences are available, in the current judicial practices, the principle of “similarity, contactable and excluding lawful origin” has been adopted for the case judging.

Case Summary:

Zhao once had her employment with Jiashan Shengguang Electronics Co., Ltd. (the “Company S”) from February 20th 2002 to March 19th 2006, and was in charge of the sales of the company. During her service there, Zhao, as the representative of Company S, concluded several transactions on vehicles lighting with Mexican DDB Company.

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What Information Could Be Considered as Trade Secret in Tech Product Transaction in China?

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Abstract

(By Albert Chen) The tech product transaction involves the information of technology and business. Among such information, to judge which part could be considered as trademark secret, it shall be based upon Article 10 of the Anti Unfair Competition Law, which regulates that to determine the trade secret, the court shall evaluate “whether it is known to the public”, “benefiting”, “practicability” and “confidentiality”.

Case Summary

In 1998, Shanghai Zhenxing Aluminum Co., Ltd. (the “Zhengxing Company”) developed a manufacturing technology, which the company used to produce articles. This technology created by Zhenxing set the standard for the production of the article. Shanghai Huikai Aluminum Co., Ltd. (the “Huikai Company”) was founded on September 10th 2003, and afterwards carried out the business in the same product manufacturing as Zhenxing. As investigated, among the 70 clients of Huikai, 68 once transacted with Zhenxing. For these clients, most products they purchased from Huikaiu were almost the same as those they bought from Zhenxing. Furthermore, Qin and Pan, who are now working in Huikai, are former employees of Zhenxing. During their employment with Zhenxing, the company signed confidential article in the labor contract and also an independent confidential agreement.

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Could User Information Be Considered Trade Secret in China?

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Abstract: trade secret must have three basic features: confidentiality, practicability, and security. Therefore, whether user information in a website could be considered as trade secret or not, it shall also be judged based on these three basic features.

(By Luo Yanjie) To a website, its’ user information is very important to its daily operation. To judge it from the legal protection perspective, it is generally protected as a trade secret. The case introduced in this article is a typical dispute on whether the user information could be considered a trade secret, and thereby could infringement be decided.

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China Supreme Court Publishes New Judicial Interpretation on Competitive Restriction Clauses

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(By Albert Chen) The system of competitive restriction is one of the major systems concerning the protection of trade secrets. In the beginning of 2013, the Supreme People’s Court of China (the “Supreme Court”) published its Interpretation IV on Several Issues concerning the Application of Law in Hearing Labor Disputes (the “Interpretation IV”). According to the new Interpretation, the rules related to the labor issue include: 1) a competitive restriction clause is valid when no article has been made regarding payment for the restriction; 2) removal of competitive competition due to delayed payment for the restriction compensation; 3) the employee may claim extra compensation when an employer terminates the restriction.

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What Chinese Intellectual Property Legal Issues Are American Companies Dissatisfied With?

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Day three of the visit to the United States

(By You Yunting) Beginning at the end of this March, on the invitation of the US government, I visited America with the goal of understanding its IPR system. On my third day in the US, I visited the Pharmaceutical Research and Manufacturers of America (“PhRMA”), the United States-China Business Council (“USCBC”), the United States Patent and Trademark Office (“USPTO”), and the East Asia Bureau of the US Department of State. The following is the brief record of my meetings on that day.

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How MaoTai and Wu Liang Ye Would Defend Against Vertical Pricing Monopoly Fines ordered by China NDRC?

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(By You Yunting) Abstract: Both Mao Tai and Wu Liang Ye can rely on one of the seven situations in Article 15 of the Anti Monopoly Law for their defense. But, that defense will not be easy because it requires evidence that the relevant agreements will not limit market competitors and that consumers can share the interests produced by the agreements.

In yesterday’s post, the writer analyzed the legal meaning of the punishment ordered by the National Development and Reform Commission (“NDRC”) against two top Chinese distilleries, Mao Tai and Wu Liang Ye. Today’s post will go one step further to describe the way for Mao Tai and Wu Liang Ye can protect their own interests.

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“Do Not Hire Agreements” among Google, Intel, Apple and Other Tech Firms Violates Chinese Laws?

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(By You Yunting) As reported, the CEOs of tech giants Apple, Intel, and Google might be forced to go to court to account for mutual unwritten agreements about not soliciting each other’s workers for employment. These cases started due to the dissatisfaction of relevant employees, who believed that such “do not hire agreements” damaged that legal rights and interests. The news has also revealed emails from former Apple CEO, Steve Jobs, threatening Palm and Google and demanding that they stop using headhunters to obtain the email addresses of Apple employees. This news also raised the concerns within the industry.

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Is It Illegal for Microsoft to Use Firefox with Firebug Plugin in Evidence Preservation in China?

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According to news reports, Microsoft along with Autodesk, filed a lawsuit in the Foshan Intermediate Court (note: the link is in Chinese) against a renowned company admitted in Foshan City, claiming computer software copyright infringement. The plaintiffs stated that the accused company had been using their software without any licenses or approvals. Based on this, the plaintiffs demanded compensation of RMB 8 million yuan, elimination of influence, cessation of infringement, and an apology. This case is not black and white and the court certainly has its own opinions, but today I would like to take this chance to discuss how to determine the legitimacy of evidence collection in cases of computer software infringement.

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What Receives Protection as a Trade Secret in China?

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By Albert Chen

In an essay posted several days ago, we discussed how infringing another’s trade secret is a kind of unfair competition. Although the Anti Unfair Competition Law contains a definition of trade secret in principle, this definition is not very detailed, and there might still be a fair number of differences between understanding and actual practice. Today’s essay will share the author’s research and analysis on whether Chinese law contains any further regulations on the term “trade secret.”

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