Answer: In the judicial practice, the right holders in trade secret infringement cases are usually the owner of trade secrets, but other right holders, such as the licensees of trade secrets, may also become the right holders of trade secrets. The persons who are liable for infringements of trade secrets are not necessarily limited to the direct tortfeasor (such as the employee who acquires the trade secret), and a third party who accepts and uses the trade secret disclosed by the direct tortfeasor may also be liable.
Understanding these issues is very important to determine whether you have the standing to claim damages and to whom you claim your rights.
The right holder who has the right to safeguard the rights and interests of a trade secret and the plaintiff who has the right to file a trade secret lawsuit include the following persons: trade secret proprietor, exclusive licensee (only the licensee can use it), non-exclusive licensee (only the licensee and the proprietor can use it) and trade secret proprietor as co-plaintiffs (or the non-exclusive licensee alone as plaintiff if the proprietor explicitly relinquishes the rights of the lawsuit), the ordinary licensee (the proprietor may license others in addition to the ordinary licensee to use it) and the proprietor of the trade secret as the co-plaintiffs (or the ordinary licensee as the sole plaintiff if authorized by the proprietor).1 Article 26 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). “Where the licensee of the exclusive license contract for the use of trade secrets brings a lawsuit against the infringement of trade secrets, the people’s court shall accept it according to law. Where the licensee and the right holder of the non-exclusive license contract jointly file a lawsuit, or file a lawsuit on their own if the right holder does not file a lawsuit, the people’s court shall accept it according to law. Where the licensee and the right holder of a general license contract file a lawsuit jointly or the licensee files a lawsuit separately with the written authorization of the right holder, the people’s court shall accept the lawsuit according to law.”
The difference between exclusive license and non-exclusive license is that the licensee of exclusive license is the only one who can use the relevant trade secret, and even the proprietor themselves can not use it. While in non-exclusive license, both the licensee and the proprietor may use the trade secret, but the proprietor must not license any other person to use it.
The person who may bear civil, administrative, and criminal liabilities for infringement of trade secrets are as follows: the tortfeasor (including under the type of acquisition, disclosure, and use infringements), and the third party who knows or should have known that the tortfeasor’s behavior is infringement but still commits the above three types of infringement. 2Article 9 of the 2019 Anti-Unfair Competition Law.Examples of such illegal acts include theft, bribery, fraud, coercion, electronic intrusion, breach of confidentiality obligations, and the use and permitting to use, of unauthorized trade secrets. It also includes abetting, enticing, and aiding others to commit acts of infringing 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.
Email: wangdong@royalaw.com
- 1Article 26 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). “Where the licensee of the exclusive license contract for the use of trade secrets brings a lawsuit against the infringement of trade secrets, the people’s court shall accept it according to law. Where the licensee and the right holder of the non-exclusive license contract jointly file a lawsuit, or file a lawsuit on their own if the right holder does not file a lawsuit, the people’s court shall accept it according to law. Where the licensee and the right holder of a general license contract file a lawsuit jointly or the licensee files a lawsuit separately with the written authorization of the right holder, the people’s court shall accept the lawsuit according to law.”
- 2Article 9 of the 2019 Anti-Unfair Competition Law.