Uncovering trade secrets in China: an empirical study of civil litigation from 2010 to 2020
Jyh‐An Lee, Jingwen Liu, Haifeng Huang · Journal of Intellectual Property Law & Practice · 2022
Both policymakers and industry players in China have become increasingly aware of the importance of trade secrets. However, the country’s trading partners and foreign investors have the strong impression that trade secret protection in the country is far from adequate.1 This intuition is rooted in China’s lack of a stand-alone trade secret act,2 deficiencies in China’s civil enforcement mechanisms,3 the unsatisfactory win rate for plaintiffs in China,4 the low damages awarded there5 and the excessive burden-of-proof requirements imposed on trade secret owners.6 Although these issues have been controversial for more than two decades, relevant debates have often lacked even the barest empirical support. Because of their increasing commercial value and importance for fierce business competition and large-scale labour mobility, trade secrets have attracted extensive attention in recent years.7 While both patents and trade secrets are valuable assets for businesses, trade secrets provide their proprietors with some unique competitive advantages that do not arise from patents. Unlike patent rights, trade secrets do not require ex-ante filing followed by a substantive examination process. Moreover, the disclosure requirement in patent law entails the full revelation of core technical specifications in the patented invention, but trade secret proprietors can and should keep the information secret. Third, whereas patents are normally protected for at most 20 years, no limits are attached to the duration of trade secret protection.