Table of Contents
Section 1 Risk Reminders Section 2 Pain Points in Trade Secret Protection Section 3 Solutions Section 4 Protection of Technical Secrets Section 5 Protection of Business Secrets Section 6 Typical Cases Section 7 Service Team Section 8 Risk Reminders
01
Overview of Trade Secrets
Section 1
A trade secret refers to technical information and business information that is not known to the public, can bring economic benefits to the right holder, is of practical value, and for which the right holder has adopted confidentiality measures.
(1) Secrecy: unknown to the public; (2) Value: possessing commercial value; (3) Confidentiality measures: corresponding confidentiality measures have been implemented.
| Category | Forms of Expression |
|---|---|
| R&D Information | Design drawings, models, samples, schemes, test records and data, progress schedules, etc. |
| Production Information | Product formulas, technological processes, technical parameters, electronic data, sample libraries, etc. |
| Hardware Information | Equipment and instrument models, configuration parameters, special requirements, etc. |
| Software Information | Source codes, application programs, data algorithms, etc. |
| Others | Other technical information for which the enterprise deems it necessary to adopt confidentiality measures |
| Category | Forms of Expression |
|---|---|
| Basic Corporate Information | Corporate structure, rules and regulations, internal notices, resolution documents, meeting minutes, etc. |
| Decision-making Information | Strategic decisions, R&D strategies, investment plans, equity incentive schemes, etc. |
| Business Operation Information | Procurement plans, procurement records, marketing plans and programmes, etc. |
| Sales Information | Customer lists, supplier lists, sales records, sales agreements, bidding documents, etc. |
| Financial Information | Financial statements, financing reports, budget and final accounts reports, various statistical reports, etc. |
| Human Resources Information | Staff rosters, contact lists, payrolls, social insurance and housing fund schedules, etc. |
| Information Technology Information | Network topology diagrams, information security risk reports, operation and maintenance logs, etc. |
| Others | Other business information for which the enterprise deems it necessary to adopt confidentiality measures |
(1) Important decision documents and technical data that directly affect corporate rights and interests in business operations shall be classified as Top Secret; (2) Corporate plans, financial statements, statistical materials, key meeting records, customer data, operating conditions, management systems, etc. shall be classified as Confidential; (3) Corporate personnel files, contracts and agreements, employee salary information, various information not yet launched to the market or undisclosed shall be classified as Internal Restricted.
Since the revision of the provisions on trade secrets under the Anti-Unfair Competition Law in 2019, followed by the issuance of the civil judicial interpretation on trade secrets by the Supreme People’s Court in August 2020 and the revision of the filing and prosecution standards for criminal trade secret cases by the Supreme People’s Procuratorate and the Ministry of Public Security in September 2020, the legal protection system for trade secrets in China has entered a fast track of development starting from 2020. In 2023, civil trials, administrative law enforcement and criminal protection concerning trade secrets all demonstrated a trend of stringent protection, embodying the legal philosophy of “facilitating right holders to exercise their rights”.
According to data publicly released by the IP Tribunal of the Supreme People’s Court in 2023, as the exclusive second-instance court for technical secret disputes, technical secret cases accounted for merely 2.52% of substantive civil second-instance cases accepted since its establishment up to 2022. Statistics published by the Beijing Intellectual Property Court show that among newly accepted cases from 2021 to October 2023, trade secret cases accounted for 0.46%, and technical secret disputes around 0.35%.
Trade secret infringement disputes, especially technical secret infringement cases, are notoriously difficult to hear, and the overall success rate for claimants remains low — a longstanding hardship for right holders. According to the latest statistics from the Beijing Intellectual Property Court, the claimant success rate in concluded trade secret disputes stands at only 15%.
Statistics from the Supreme People’s Procuratorate summarise five core characteristics of criminal trade secret protection in China: First, although case numbers have risen significantly, the absolute volume remains small; Second, case distribution is uneven, concentrated in regions with vibrant economic activities; Third, high rates of non-arrest and non-prosecution decisions; Fourth, a large proportion of defendants receive suspended or lenient sentences; Fifth, the objects of crimes are mostly core corporate technical secrets, and current or former employees constitute the high-risk group of perpetrators.
02
Pain Points in Trade Secret Protection
Section 2
03
Solutions
Section 3
04
Protection of Technical Secrets
Section 4
1. Introduction
A technical secret refers to non-patent technology and technical information that is unknown to the public, capable of bringing economic benefits to an enterprise, practically valuable, and protected by confidentiality measures adopted by the enterprise. Unlike patents, there is no official authority to recognise or safeguard technical secrets. Enterprises must independently identify, classify and implement protective measures. In practice, enterprises commonly face difficulties including: inability to fix technical secret content due to missing carriers; absent or inadequate confidentiality measures; information leakage caused by staff turnover or external cooperation; and low favourable ruling rates in judicial proceedings.
Against this backdrop, our service team has launched a special compliance legal service product for technical secret protection. We provide end-to-end legal services covering formulation of corporate technical secret management systems, identification and fixation of technical secrets, management of confidential personnel, design of protective measures, administration of confidential articles and carriers, and response to information leakage incidents, helping enterprises achieve compliance in technical secret protection.
Technical information includes information relating to technology such as structures, raw materials, components, formulas, materials, samples, styles, propagating materials for new plant varieties, processes, methods or their procedures, algorithms, data, computer programs and relevant documentation.
2. Mission
Safeguard enterprises’ technical secrets and support innovative business operations.
3. Target Clients
Technology-driven enterprises, emerging internet companies, innovative SMEs, large traditional enterprises, and enterprises exposed to risks of technical secret leakage or infringement.
4. Application Scenarios
Scenario 1: Employees resign and take corporate technical secrets to join competitors or establish new competing businesses. Scenario 2: Employees sell corporate technical secrets to other entities or contribute them as technical capital to new enterprises for passive gains. Scenario 3: Employees disclose technical secrets including products, drawings, technical parameters or processes to suppliers or customers during business communications. Scenario 4: Newly recruited technical personnel may expose the enterprise to infringement litigation or criminal liability for misappropriating technical secrets of former employers. Scenario 5: Enterprises holding substantial technical secrets require effective confirmation and protection to prevent leakage. Scenario 6: Enterprises planning financing, IPO, overseas expansion or tax optimisation need to confirm ownership of intangible assets such as technical secrets.
5. Service Content
This product delivers full-cycle legal services covering formulation of technical secret management systems, identification and fixation of technical secrets, confidential personnel management, design of protective measures, administration of confidential articles and carriers, and leakage incident handling, building a customised compliance management system for technical secret protection.
We provide comprehensive legal solutions targeting core pain points in corporate technical secret protection:
Where carriers are missing and technical secret content cannot be solidified: We assist enterprises in fixing technical secrets to ensure traceability and enable assembly of complete evidence chains for enforcement.
Where confidentiality measures are absent or insufficient: We help formulate detailed confidentiality implementation rules.
Where staff turnover causes leakage or infringement of third-party technical secrets: We support personnel administration and establish sound pre-employment, in-service and post-resignation rules to prevent both internal secret leakage and infringement on others’ technical secrets.
Where information leakage risks arise during cooperation with counterparties: We assist in establishing transaction confidentiality regimes to guard against leakage by partners.
Against the backdrop of low favourable ruling rates in domestic technical secret litigation: We support risk prevention and systematic handling of leakage incidents.
Content: Formulate specific management rules governing confidential information, activities, premises and personnel. Purpose: Institutional safeguards for technical secret protection.
Content: Identify, verify, classify and fix technical secrets. Purpose: Solidify technical secret content and carriers to establish the foundational rights basis for protection.
Content: Guidance on employee background checks, contract templates, reward and punishment mechanisms, confidentiality training. Purpose: Prevent secret leakage or infringement of third-party technical secrets.
Content: Design reasonable and effective confidentiality measures tailored to different confidential scenarios. Purpose: Prevent unauthorised disclosure of technical secrets.
Content: Establish management rules for computers, mobile phones, documents, products and portable storage media. Purpose: Regulate use of confidential articles and carriers to avoid technical secret leakage.
Content: Internal emergency plans, evidence preservation, rights protection strategies. Purpose: Rapidly respond to leakage, mitigate losses, and lay a foundation for subsequent judicial enforcement.
Service Checklist
Identification and fixation of enterprise technical secret content
Detailed confidentiality measures
Corporate labour and personnel management documents
Templates for employment contracts, confidentiality agreements and non-compete agreements with staff
Confidentiality and non-compete agreements for shareholders and senior management
Commercial cooperation confidentiality agreement templates
Management documents for confidential articles and carriers
Review of confidential contracts
Legal consultation on confidential matters
Lawyer’s letters for confidential-related disputes
Case studies on common technical secret risks
Guidance on judicial appraisal of technical secrets
Technical secret protection schemes for outsourced processing
Technical secret protection schemes for outsourced R&D
Confidentiality design for in-house production
Supplier IP and leakage risk prevention plans
Confidentiality training and education
Graded management system for technical secrets
Commercial negotiations involving confidential matters
Rights protection strategies for technical secret disputes
05
Protection of Business Secrets
Section 5
A business secret refers to operation-related information such as ideas, management data, sales materials, financial records, plans, samples, bidding documents, customer information and data that is unknown to the public, has commercial value, and is protected by confidentiality measures adopted by the enterprise.
Like technical secrets, there is no official body to recognise or enforce business secrets. Enterprises must independently identify, classify and implement protective measures. Enterprises frequently encounter challenges including missing carriers making business secret content hard to prove, inadequate confidentiality measures, leakage triggered by staff mobility or external cooperation, and low favourable judgment rates in litigation.
In response, our team has developed a special compliance legal service product for business secret protection. We provide full-process legal services covering formulation of corporate business secret management systems, identification and fixation of business secrets, confidential personnel management, protective measure design, administration of confidential articles and carriers, and leakage incident response to safeguard corporate operations.
Business information includes operation-related ideas, management materials, sales data, financial records, plans, samples, bidding documents, customer information, data and other information. Customer information covers customer names, addresses, contact details, transaction habits, intentions and deal particulars.
Target Clients: Technology-driven enterprises, emerging internet companies, innovative SMEs, large traditional enterprises.
Application Scenarios
Scenario 1: Employees resign and take corporate business secrets to join competitors or set up competing businesses. Scenario 2: Senior executives improperly utilise business secrets such as customer lists and marketing channels to recruit staff and launch rival ventures. Scenario 3: Employees disclose business secrets including investment plans, marketing schemes and financial statements to suppliers or customers during business communications. Scenario 4: New recruits may expose the enterprise to litigation or criminal liability for misappropriating business secrets belonging to former employers. Scenario 5: Enterprises holding substantial business secrets require effective confirmation and protection against leakage. Scenario 6: Enterprises preparing financing, IPO, overseas expansion or tax planning need to confirm ownership of business secrets.
This product provides end-to-end legal services spanning formulation of business secret management systems, identification and fixation of business secrets, confidential personnel management, protective measure design, administration of confidential articles and carriers, and leakage incident handling, building a customised compliance management system for business secret protection.
We deliver comprehensive legal solutions addressing core difficulties in business secret protection:
Where carriers are missing and business secret content cannot be solidified: We help enterprises fix business secret information to ensure traceability and enable assembly of complete evidence chains.
Where confidentiality measures are absent or insufficient: We assist in drafting detailed confidentiality implementation rules.
Where staff turnover leads to leakage or infringement of third-party business secrets: We support personnel administration and improve pre-employment, in-service and post-resignation mechanisms to prevent internal leakage and avoid infringing others’ business secrets.
Where cooperation with external parties creates leakage risks: We establish transaction confidentiality regimes to guard against disclosure by partners.
Against low favourable ruling rates in domestic business secret litigation: We support risk prevention and systematic handling of leakage incidents.
Content: Formulate specific management rules governing confidential information, activities, premises and personnel. Purpose: Institutional safeguards for business secret protection.
Content: Identify, verify, classify and fix business secrets. Purpose: Solidify business secret content and carriers to establish foundational rights basis.
Content: Guidance on employee background checks, contract templates, reward and punishment mechanisms, confidentiality training. Purpose: Prevent secret leakage or infringement of third-party business secrets.
Content: Design reasonable and effective confidentiality measures for different confidential scenarios. Purpose: Prevent unauthorised disclosure of business secrets.
Content: Establish management rules for computers, mobile phones, documents, products and portable storage media. Purpose: Regulate use of confidential articles and carriers to avoid leakage.
Content: Internal emergency plans, evidence preservation, rights protection strategies. Purpose: Rapidly respond to leakage, mitigate losses, and lay groundwork for subsequent judicial remedies.
Service Checklist
Identification and fixation of enterprise business secret content
Detailed confidentiality measures
Corporate labour and personnel management documents
Templates for employment contracts, confidentiality agreements and non-compete agreements with staff
Confidentiality and non-compete agreements for shareholders and senior management
Commercial cooperation confidentiality agreement templates
Management documents for confidential articles and carriers
Review of confidential contracts
Legal consultation on confidential matters
Lawyer’s letters for confidential-related disputes
Case studies on common business secret risks
Guidance on judicial appraisal of business secrets
Business secret protection schemes for outsourced processing
Business secret protection schemes for outsourced R&D
Confidentiality design for in-house production
Supplier IP and leakage risk prevention plans
Confidentiality training and education
Graded management system for business secrets
Commercial negotiations involving confidential matters
Rights protection strategies for business secret disputes
06
Typical Cases
Section 6
Case 1: Product Formulas May Constitute Trade Secrets — Claimant Company T v. Respondent Company X for Infringement of Technical Secrets
Case Overview: Company T invested substantial manpower and resources to develop soup base formulas for spicy hot pot. Its brand ranked highly among spicy hot pot merchants on food delivery platforms. Company T alleged that its former employee Zhang unlawfully obtained five spicy hot pot soup base formulas during employment. After resignation, Zhang cooperated with Company X to operate spicy hot pot businesses using the same formulas, infringing Company T’s trade secrets. Company T requested the court to order Company X to cease infringement and compensate economic losses plus reasonable expenses totalling RMB 546,000.
Typical Significance: The Shanghai Intellectual Property Court held that the five spicy hot pot soup base formulas claimed by Company T featured unique ingredients and proportions, conferred competitive advantages and commercial value, and were protected by corresponding confidentiality measures, hence qualifying as technical secrets. The accused infringing formulas adopted identical ingredients and ratios. Zhang, the former employee, had access to the confidential formulas and assisted Company X in operating the business. Company X failed to provide proof of independent development of the accused formulas, confirming its unauthorised use of the technical secrets. Given that the relevant stores had already ceased operation, the claim for injunction was rejected. Taking into account the nature and commercial value of the technical secrets, Company X’s subjective intent, duration and scope of infringement, and sales volume of infringing products, the court ordered Company X to pay total compensation of RMB 150,000 covering economic losses and reasonable litigation costs.
Case 2: Clear Definition of Secret Points Required to Protect Software Source Codes via Trade Secret Law — Criminal Case against Defendant Zhang for Infringement of Trade Secrets
Case Overview: From 2010 to March 2016, Zhang was employed by Company S as a software development engineer and Director of Technical Support. He participated in software R&D and obtained access to relevant source codes. Company S adopted graded access control, confidentiality clauses in employment contracts, and return of property upon resignation to protect the source codes. Appraisal confirmed that portions of the software source code remained undisclosed to the public before 16 May 2019. After resignation in April 2016, Zhang co-founded Company Q with Zhao and another individual. In violation of confidentiality obligations owed to Company S, Zhang utilised the trade secret source codes to develop competing software. Forensic appraisal showed the source code preserved on Zhang’s computer shared over 90% similarity with Company S’s source code. Executables sold by Company Q were also highly similar and substantially identical to object code compiled from Company S’s confidential source code. Judicial audit indicated Company Q generated more than RMB 4.3 million in software sales from July 2016 until detection.
Typical Significance: This is a representative criminal case where core R&D staff of high-tech enterprises exploit former employers’ confidential source codes to develop rival software for illegal gains, characterised by concealed criminal conduct and severe disruption to the right holder’s business. Identification of secret points within source code and determination of substantial similarity constitute difficult issues in judicial practice. The judgment clarified the distinguishing review criteria for trade secret protection of source codes versus copyright protection of source codes, properly defined secret points and established rules for judging substantial similarity. Regarding secrecy appraisal, survey institutions conducted comprehensive assessments including internet searches, reverse engineering analysis and review of confidentiality measures. The appraisal concluded that the confidential technical components were indispensable, not common general knowledge or industry practice, undisclosed online, and unavailable to the public through decompilation. The trial adopted practices such as expert testimony and consultant opinions to verify search scope, appraisal methodology and evidence integrity, making positive procedural explorations and offering reference for criminal trade secret cases involving software source codes.
07
Service Team
Section 7
20 years of criminal law practice Asset recovery value from criminal complaints exceeding RMB 300 million
The Magic Cube Criminal Team focuses on criminal defence, criminal complaints and non-contentious criminal legal services, boasting extensive practical experience and solid theoretical foundations.
Lawyer Ming Can
Chairman of Management Committee & Director, Criminal Law Department, Guangdong Jintang Law Firm Member of Nanshan District Committee of the Chinese People’s Political Consultative Conference Law Enforcement Supervisor of Futian Public Security Bureau Instructor for comprehensive criminal law enforcement training at Shenzhen Police Academy Visiting Professor, Criminal Law School, Northwest University of Political Science and Law
Holds dual master’s degrees in Law and Chinese Studies from Northwest University of Political Science and Law and Chu Hai College of Hong Kong. Former SWAT officer with Cheetah Commando and senior detective of the Pre-trial Brigade. He previously served at Nanshan Branch, Longhua Branch Police Stations, Legal Affairs Section and Pre-trial Brigade of Shenzhen Public Security Bureau. During his pre-trial career, he handled over one thousand criminal cases annually, with profound experience in criminal investigation and pre-trial examination, especially in collection and assessment of criminal evidence.
Li Lei
Former First-instance Judge, Model Worker of Jiangmen City One of the Top Ten Investigation Supervision Prosecutors of Guangdong Province (1st Session) One of the Top Ten Public Prosecutors of Guangdong Province (6th Session), Winner of Best Debater Award
Ten years as a prosecutor plus ten years as a judge — two decades of practice covering the full litigation chain including investigation, arrest review, public prosecution, trial and enforcement. He presided over nearly 2,000 criminal cases and more than 1,000 enforcement matters. Winner of multiple professional competition awards, a committed legal practitioner dedicated to criminal practice.
Lawyer Wang Xing
Partner & Deputy Director, Criminal Law Department, Guangdong Jintang Law Firm Member, Criminal Defence Committee for Common Crimes, Shenzhen Lawyers Association
LLB from Northwest University of Political Science and Law, LLM from Wuhan University. Completed internships at Anti-Corruption Bureau of Alashankou People’s Procuratorate and the First Circuit Court of the Supreme People’s Court (Shenzhen). Possesses solid legal knowledge and abundant litigation experience.
Lawyer Xu Changman
Lead Attorney, Magic Cube Criminal Team Member, Criminal-Civil-Administrative Intersection Centre, Qianhai Working Committee, Shenzhen Lawyers Association
Five years of working experience in the criminal division of a Shenzhen court. Familiar with criminal procedure rules. Specialises in criminal defence, non-contentious criminal matters and criminal-civil cross cases, with strong communication and teamwork capabilities.
Lawyer Zheng Weihan
Lead Attorney, Magic Cube Criminal Team Observer, Criminal-Civil-Administrative Intersection Centre, Qianhai Working Committee, Shenzhen Lawyers Association
Graduated from China University of Political Science and Law. Served four years as a lecturer on criminal law for national judicial examination and postgraduate entrance examinations before specialising in criminal practice within the legal profession.
Lawyer He Xinmeng
Lead Attorney, Magic Cube Criminal Team
Master of Law. Many years of legal practice handling numerous matters including criminal complaints, criminal defence, administrative reconsideration, administrative litigation and civil-commercial disputes. Has provided perennial legal counsel and special services to multiple government institutions and enterprises with rich hands-on experience.
Long Runze
Trainee Lawyer, Magic Cube Criminal Team
08
Risk Reminders
Section 8
Uphold objectivity based on facts and evidence. Summarise case facts truthfully relying on materials supplied by clients; no deliberate fabrication, conjecture or falsification of facts or evidence.
Risks relating to working records and evidence collection. Criminal complaints often require lawyers to assist clients in gathering and organising evidence. Lawyers must observe legal risks in criminal evidence investigation. Clients should collect materials wherever possible. All evidence must be carefully verified for authenticity. If lawyers participate in evidence collection, at least two lawyers shall conduct the work together and preserve complete working records.
Information disclosure obligation. The duration of special legal services for criminal complaints varies, subject to local judicial environments and national criminal policies. After engagement, lawyers mainly assist clients with evidence collection, material organisation, drafting Criminal Complaints, Legal Opinions and Case Research Reports, and accompany clients to file complaints. Relevant risks and limitations shall be fully disclosed to clients in advance.
No guarantee of outcomes. Lawyers provide professional legal assistance and do not bear liability for case results. After accepting instructions, we will issue phased Legal Opinions based on facts and evidence, offering specific guidance on whether conduct constitutes a criminal offence, applicable charges, sentencing reference standards and required evidence. We will also forecast probable case trajectories and disclose relevant risks as comprehensively as possible. In accordance with PRC legal regulations, the law firm cannot guarantee specific litigation outcomes to clients.