Answer: In practice, information that may be trade secrets includes: technical information such as structure, raw materials, components, formulas, materials, samples, patterns, propagation materials of new plant varieties, processes, methods or steps, algorithms, data, computer programs, and related documents, and business information such as management, sales, finance, planning, samples, bidding materials, customer information (including customer name, address, contact information and trading habits, intentions, content), and data.1Article 1 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases of Infringement of Trade Secrets (FaShi (2020) No.7).
Of course, patents, copyrights and trademarks owned by right holders can not be protected as trade secrets due to their publicity nature. Unpatented technologies (typically the formula of Coca-Cola drink) and unregistered layout designs of integrated circuits can of course be protected as trade secrets, and computer software source codes can also be protected as trade secrets even if they are published through software registration.2Shenzhen Huaer Blooming Network Technology Co., Ltd., Zhejiang Panxing Digital Intelligence Technology Co., Ltd. and other appeals for disputes over infringement of technical secrets, the Supreme People’s Court of the People’s Republic of China Civil Judgment (2021) No.2298. The Supreme People’s Court held that although some source codes were published in computer software registration, not all codes were published. Therefore, it can be identified as a trade secret. Beijing yuanding Times Technology Co., Ltd., Qu Zhanbin, etc. Civil Judgment of the Second Instance of the Civil Dispute over Infringement of Technical Secrets Civil Judgment of the Supreme People’s Court of the People’s Republic of China (2021) SFZMZ No.2389.
As a special kind of trade secret, the scope of protection of computer software source code is a noteworthy issue. In practice, the common situation is that the computer source code requested for protection is a combination of independent innovation part code, open source code, and third-party authorized code. In the case of Anmei Weike (Beijing) Internet Technology Co., Ltd. before the Supreme Court in 2020, the court seems to consider that only part of the code of independent innovation of the right holder should be protected.3Anmei Weike (Beijing) Internet Technology Co., Ltd. and Lingbo Technology (Beijing) Co., Ltd., Zheng Guanghui, Wu Jianming, Shi Hongliang and Xu Feng Infringement of Computer Software Copyright and Infringement of Trade Secrets Civil Judgment of the Supreme People’s Court of the People’s Republic of China (2020) No.1099. In the case, a former employee established a competitive software company. The right holder requested to identify trade secret infringement and software copyright infringement. The software source code of the right holder includes three parts: open source code, third-party licensed code, and self-developed code. The right holder did not specify the scope of the protected code, so the court determined that it could not support the existence of trade secrets, and the claim was rejected. There is a problem here, if the right holder uses the combination of open source code and third-party licensed code to make innovative software, it seems that it should still be protected, and can not be understood as a simple stack of codes as the judgment of this considered.However, we believe that the source code of the three parts mentioned above normally is not a simple code superposition but an organic innovation and reconstruction. After an right holder has paid the third-party authorization fee, they should enjoy the trade secret of their software as a whole, as long as the whole code is non-public in terms of code expression and function.
The courts may comprehensively judge whether the relevant information is a trade secret according to an appraisal report, a novelty search report, evidence of the right holder’s investment and development of the relevant information, and the legitimacy of the tortfeasor’s means of obtaining the information.4Civil Ruling of the Supreme People’s Court of the People’s Republic of China (2015) No.2035 on the application for retrial of disputes over infringement of trade secrets between Xinfa Pharmaceutical Co., Ltd. and Yifan Xinfu Pharmaceutical Co., Ltd. The court determined that the information was trade secrets according to the investment made by the right holder and the means of secret acquisition by the tortfeasor. It did not depend entirely on trade secret appraisal report. The courts usually directly find business information such as financial information or company’s planned bidding information as trade secrets.
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Mr. Dong Wang has been in practice for over 20 years, specializing in business law, including employment law, commercial law, company law, and intellectual property law. Mr. Wang has earned respect and trust from his clients due to his professionalism, fidielty, and kindness.
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- 1Article 1 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases of Infringement of Trade Secrets (FaShi (2020) No.7).
- 2Shenzhen Huaer Blooming Network Technology Co., Ltd., Zhejiang Panxing Digital Intelligence Technology Co., Ltd. and other appeals for disputes over infringement of technical secrets, the Supreme People’s Court of the People’s Republic of China Civil Judgment (2021) No.2298. The Supreme People’s Court held that although some source codes were published in computer software registration, not all codes were published. Therefore, it can be identified as a trade secret. Beijing yuanding Times Technology Co., Ltd., Qu Zhanbin, etc. Civil Judgment of the Second Instance of the Civil Dispute over Infringement of Technical Secrets Civil Judgment of the Supreme People’s Court of the People’s Republic of China (2021) SFZMZ No.2389.
- 3Anmei Weike (Beijing) Internet Technology Co., Ltd. and Lingbo Technology (Beijing) Co., Ltd., Zheng Guanghui, Wu Jianming, Shi Hongliang and Xu Feng Infringement of Computer Software Copyright and Infringement of Trade Secrets Civil Judgment of the Supreme People’s Court of the People’s Republic of China (2020) No.1099. In the case, a former employee established a competitive software company. The right holder requested to identify trade secret infringement and software copyright infringement. The software source code of the right holder includes three parts: open source code, third-party licensed code, and self-developed code. The right holder did not specify the scope of the protected code, so the court determined that it could not support the existence of trade secrets, and the claim was rejected. There is a problem here, if the right holder uses the combination of open source code and third-party licensed code to make innovative software, it seems that it should still be protected, and can not be understood as a simple stack of codes as the judgment of this considered.
- 4Civil Ruling of the Supreme People’s Court of the People’s Republic of China (2015) No.2035 on the application for retrial of disputes over infringement of trade secrets between Xinfa Pharmaceutical Co., Ltd. and Yifan Xinfu Pharmaceutical Co., Ltd. The court determined that the information was trade secrets according to the investment made by the right holder and the means of secret acquisition by the tortfeasor. It did not depend entirely on trade secret appraisal report.