Know Your Secrets

1. Step 1: Know Your Secrets
Nearly all businesses in all industries and sectors possess trade
secrets. Trade secrets are a valuable and highly useful form of
intellectual property right. It is strongly recommended that you
take the adequate steps to protect them because trade secrets
can ensure your business advantage over competitors and by
being able to prove that you made the eort to keep it secret,
you have an option of enforcing your rights against those who
misappropriate your trade secrets.
Unlike some other forms of IP rights such as patents and copyrights
that have a nite term, trade secrets can theoretically enjoy an
innite term of protection so long as the trade secret remains just
that - a secret. The main dierence between protecting something
by patent or as a trade secret is that, while technical information
is publicly disclosed in patents, it is kept away from the public eye
in trade secrets. A trade secret can last forever as long as the
condentiality measures that protect it continue to work, while an
invention patent typically expires aer 20 years.
Perhaps the most classic example of a trade secret is the recipe
or formulation for Coca-Cola. This has been closely guarded for
decades by The Coca-Cola Company, and nobody has been able
to gure it out. Had the formulation been patented when it was
rst invented, it would have entered the public domain as soon as
the patent expired.
On the other hand, legal protection of trade secrets can be easily
lost. Once the information becomes public information, it no longer
enjoys any legal protection. As a result, prevention is the golden
rule when it comes to protecting your trade secrets because once
your secret is out, there is usually very little that you can do about
it. China, like most other countries, provides a legal framework for
the protection for trade secrets, and the law provides for remedies
in the event that your trade secrets are unlawfully disclosed. You
can use the following steps to protect your trade secrets in China.
You can only protect trade secrets when you know you have
them. But what exactly can be a trade secret? The universe
of what can be a trade secret is vast, but there are certain
requirements. Simply calling something a secret is not enough. In
China, by denition, a trade secret is any non-public information
with actual or potential commercial value and that is guarded
by condentiality measures. In the 2019 amendment of the
Anti-Unfair Competition Law, the denition of a trade secret
was broadened to include all “trade-related information”, not
just technical information and “business information”.
Denition of trade secret
n order for the informatio n to be a trade secre t,
it must a) be non-p ublic - it must not be kn own
by the general pu blic or by your competit ors; (b)
have actual or pote ntial commercial va lue - it
must give the owner a c ompetitive ad vantage
or be capable of generating eco nomic benet ;
and (c) gua rded by condentialit y measur es -
the owner must t ake reasonable m easures to
protect the condentiality of the information. All
three element s are essential for the information
to be considered a tr ade secret.
If you are still unsure whether you have trade secrets, a good
rule of thumb is to consider whether the information is something
your competitors would want to know or that would give them a
commercial advantage. Your trade secrets may include:
a) expressions of ideas that give your business a competitive
advantage, for example, a new type of product, an innovative
business model, or a new online concept, etc.;
b) know-how such as manufacturing or design techniques,
skills, formulations, work-ow processes, quality control
methods, knowledge, etc. relevant to the development,
testing, and manufacture of your products, including also
“negative know-how” or information learned during research
and development on what not to do or what does not work;
c) the status of products or services under development,
expected product release dates, and details of how they
function and their technical features, for example, new
design features, a new interface, device functions, or how a
new soware program works, etc.
d) valuable business information such as customer lists, cost
and price information, suppliers and contractors, contract
terms, marketing strategy and plans, etc.; or
e) any other information with potential commercial value such
as your preferences with regard to customers or suppliers,
rankings of quality of suppliers or creditworthiness of
customers, etc.
Protecting your Trade Secrets in China

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT