China revises the rules on trade secrets in the Anti-Unfair Competition Law

On 23 April, the Standing Committee of the National People’s Congress issued the Amendment of the Anti-Unfair Competition Law (“Amendment”). The Amendment mainly addresses the protection of trade secrets.

The Amendment defines a trade secret as technical information, operational information and other business information, which the public is not familiar with, has business value and has been protected by the rights’ holder with correspondingly confidential measures. This definition extends the original scope of a trade secret, which only included technical and operational information. The Amendment also extends the scope of infringing acts to include electronic evasion, or instigating, inducing and assisting others to breach confidential obligations. The Amendment further provides that in addition to the business operators, other natural persons, legal entities and unincorporated organisations committing illegal acts shall also infringe trade secrets.

The Amendment strengthens the legal liabilities for trade secret infringement. If a business operator infringes a trade secret maliciously, it may have punitive damages imposed. The compensation amount could be up to five times the actual loss of the right holders or the actual gain of the infringers. Where it is difficult to determine the actual loss or profit, the Court has discretion to decide the amount of compensation. The maximum award has increased from RMB 3 million to RMB 5 million. The Amendment also provides new rules on the burden of proof of trade secret infringement.

Please click here to review the Amendment (Chinese only).