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Training from Shanghai Procuratorate on Trade Secret

Create Time:2020-05-29

As an important form for companies to protect their intellectual property rights, trade secrets are of great significance to the development and innovation. How to protect trade secrets in front to effectively prevent the leakage and infringemen? Once the infringement occurs, what remedial measures should the right holder take? ... The problems mentioned above are closely related to intellectual property rights protection workers and R&D employees. For such issues related to how to strengthen companies’ administration and protection of trade secrets, especially to promote knowledge construction for R&D employees’ consciousness, warning education and preventing leakage of trade secret, on May 22, Best Practices/Enforcement Committee and Patent and Innovation Committee of Quality Brands Protection Committee of China Association of Enterprises with Foreign Investment ( referred to as QBPC ) hosted Online Training of Shanghai Procuratorate on Trade Secrets with the coordination from QBPC member company Eaton. The invited prosecutors in charge of the trade secret cases from Shanghai People’s Procuratorate and Changning District People’s Procuratorate delivered online training on trade secret awareness, warning education and leakage preventive. More than 70 representatives of 60 member companies attended the training.


After a brief speech by the organizer, prosecutor Ms. Chuan Lu of Shanghai People's Procuratorate first shared the overall situation of intellectual property criminal cases in Shanghai with the participants. In 2019, the number of various criminal cases of IPR infringement in Shanghai increased significantly. The distribution of the types of cases reflected the characteristics of the location, and the types of cases were positively correlated with the industrial layout of the city. Trademark cases account for 90.13% of all intellectual property criminal cases. Compared with that, the number of cases infringing on trade secrets is small, but the total number is significantly increased. In addition, the infringement of trade secrets is concentrated in a high incidence zone, the Industry and Information technology field. The criminal technique is relatively fixed, which shows that the main body of infringement is mainly internal personnel. "With the development of Lin-gang Special Area of the Shanghai Pilot FTZ and the construction of science and technology innovation center, the characteristics of economic globalization in Shanghai are becoming increasingly obvious. And trade secrets as the core competitiveness of enterprises will continue to become the focus of competition," Lu said. “At the same time, we are also concerned that the anti-unfair competition law has changed the traditional dichotomy and extended the definition of  trade secrets, which will gradually increase the demand for the protection of rights holders, which will also put forward more requirements for the procuratorates’ protection." Later, Lu briefly analyzed the causes of the difficulty in investigating and dealing with trade secret crimes. There are three main points: first, it is difficult to find the infringement, and the source of case clues needs to be further expanded; The second is the lack of confidentiality measures, resulting in doubtful identification of infringement acts; Third, the threshold of admission of crime is high, the standard of evidence is becoming stricter. For these reasons, Lu puts forward some suggestions to the right holders: "Companies need to pay attention to the effectiveness of the security measures and the clarity of the core secret point. The company should avoid rough general secrecy rules and casual office way to cause leakage situation which is difficult to determine and estimate the loss when reporting the case. Otherwise, from the view of criminal law, it will affect the determination of trade secret infringement, evaluation of damages and investigation for evidence, etc." Lu finally stressed that training series for trade secrets protection is not only in order to help enterprises to safeguard their own rights and interests, and promote its development and innovation, but also provide employees, especially R&D with guidance to estimate risks for individual work behavior and avoid adverse affection of a temporary fault on long-term development, even the life and reputation.


In the following session, Mr. Xiaojun Shi, Director of the third Procuratorial Department of the Changning District People's Procuratorate, explained in detail the relevant laws and regulations on the crime of violating trade secrets, the difficulties and hot issues of trade secrets protection, and the construction of the protection system of commercial and technical information to the attendees. Through the analysis of the actual cases in recent years and the statistical big data of trade secret dispute cases from 2015 to 2020, Shi found that the cases supported or partially supported by the judgment results only accounted for 9.06% of the total cases, with a very low victory ratio. "The reason for losing the lawsuit was that the information claimed by the plaintiff could not be regarded as a trade secret, which was mainly reflected in the failure to prove the confidentiality of the information and the adoption of confidentiality measures. In addition, the preposition of trade secret protection is very important. If no measures are taken to protect trade secrets before entering the proceedings, it will be difficult to win the lawsuit." He said, "Compared with the different relief means of trade secrets protection between criminal and civil law, how to choose more suitable way to the protect the rights and interests of companies' trade secrets needs to be weighed in actual cases. The difficulties in the case of trade secrets protection are more worth considering. First, it is difficult to distinguish trade secrets from employees' basic skills. Secondly, the determination and selection of the core secret points of technical information has its dilemma; Thirdly, the 'economic loss' in the crime trade secrets is currently mainly calculated based on the interests gained by the infringer due to the infringement and the value of the trade secrets. In the future, other calculation methods and basis should be explored according to the characteristics of each case." Gives the human by the fish to be inferior gives the human by the fishing. In regards to how to build better business and technical information protection system for a company, Shi Xiaojun also gave his suggestions that making the good commercial secret management strategy, setting up the business and technical information supervision system, attaching importance and take measures to prevent leaks, paying attention to guard against commercial secrets infringement partners.


At the end of the meeting, under the organization of Peter Yang, both online and offline representatives of companies participated had active discussions with the two prosecutors on the definition of secret points, whether overseas R&D costs should be considered in the scope of loss assessment, judicial policies related to trade secrets and other issues. After the meeting, the two prosecutors agreed to share their materials carefully prepared for the training with QBPC members to promote further study and communication. Each prosecutor who is dedicated to make contributions the unceasing enhancement of trade secrets protection consciousness and increasing efforts to crack down on infringements, which are of great significance for the development and the innovation of the industry and society. QBPC appreciate their great efforts to build a healthy legal environment. QBPC is willing to join hands with procuratorates to continuously contribute own strength in protecting trade secrets.