Protecting Trade Secrets: Don’t Be “Belatedly Aware” 

“Focusing on knowledge-intensive enterprises, technology-intensive enterprises, innovative enterprises, and time-honored brands, establishing trade secret protection liaison points, providing timely ‘one-on-one’ service guarantees for enterprises, and accelerating the improvement of the trade secret protection service network.” Not long ago, the State Administration for Market Regulation launched a service activity to enhance enterprises’ trade secret protection capabilities. In recent years, many enterprises have improved their trade secret protection capabilities, but at the same time, some enterprises have misconceptions, and this “belated awareness” often affects their rights protection actions.

Traditionally, people’s understanding of trade secret protection is often that they take confidentiality measures themselves. However, the risk of leakage is ubiquitous in modern business society, making it more important to consider the rights protection channels after leakage. In judicial practice, a common situation exists: certain information has not been actively disclosed, and its owner believes it to be a trade secret. Only when the information is infringed does the information owner discover that it does not meet the conditions for trade secret protection.

my country’s Anti-Unfair Competition Law stipulates that “trade secrets, as referred to in this Law, are commercial information such as technical information and business information that are not publicly known, have commercial value, and have been protected by the right holder through corresponding confidentiality measures.” Therefore, to constitute a trade secret, three conditions must be met simultaneously: secrecy, value, and confidentiality. These, along with the source and the right holder, constitute the four main aspects that should be considered in the protection of trade secrets.

In infringement cases, it is essential to first clarify whether the right holder possesses the rights. Therefore, in disputes involving the infringement of trade secrets, the source and the right holder are crucial. Some “trade secrets,” due to the lack of prior protective measures, result in the right holder not being identified, leading to significant losses.

Regarding value, there is little dispute in disputes involving the infringement of technical secrets, as their commercial value is often self-evident. In disputes involving the infringement of business secrets, some controversy may exist. In such cases, the right holder needs to provide evidence that the business secret in question has commercial value, while the accused infringer needs to provide evidence that the business secret in question lacks commercial value.

Regarding secrecy, the author believes that the strategies adopted in litigation are very important. Trade secrets and business secrets involved in legal disputes often encompass a considerable amount of information. In some cases, the selection of “secret points” is inappropriate, sometimes contradictory, or even information that has already been proactively disclosed is used as a claim for trade secrets, resulting in self-inflicted losses. In other cases, although the main information has clearly been disclosed, the selection of “secret points” is very skillful, making them difficult to find within the publicly available information. The court ultimately supported the relevant claims.

Confidentiality depends on the rights holder’s level of trade secret management. In a dispute over infringement of trade secrets, the plaintiff company failed to prove that it had taken confidentiality measures to prevent the defendant company from conducting measurements. Therefore, the plaintiff’s claim that the defendant stole and disclosed its trade secrets was unfounded.

To effectively protect trade secrets, companies must start with their employees. Companies should regularly conduct confidentiality education and training to ensure that employees fully understand the importance of protecting trade secrets, understand relevant laws and regulations, and clarify their confidentiality responsibilities. At the same time, companies should establish and improve confidentiality systems, clearly define confidentiality regulations and operating procedures, and ensure that trade secrets are effectively protected. Furthermore, companies should strengthen information security training for employees to improve their information security awareness and skills, preventing the leakage of trade secrets due to employee negligence.

Information is the primary carrier of trade secrets. To effectively protect trade secrets, enterprises must strengthen information security management. Enterprises should establish and improve information security management systems, clearly define information security management responsibilities, and strengthen the security protection of information systems to ensure that trade secrets are not leaked, tampered with, or damaged.

Protecting trade secrets is a crucial guarantee for enterprise development. Reasonable measures must be taken for protection; otherwise, enterprises may face the risk of being unable to protect their rights. Enterprises should take measures from multiple aspects to ensure the security of trade secrets in order to survive and develop in fierce market competition.