What to Do When Your Secret is Out
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Step 5: What to Do When Your Secret is Out
The key to protecting your trade secrets is prevention. While
China provides for administrative, civil and criminal protection
for trade secrets, by the time you have to consider legal
action through any one of these channels, your trade secret
and commercial advantage may already have own away.
Nevertheless, enforce your rights when your trade secrets
are being infringed.
If you nd that your trade secrets may have been stolen,
the rst step is to conduct an internal investigation and to
preserve as much evidence as possible, including preserving
documents and e-mails. It may be necessary to engage the
services of an external investigator to investigate a particular
employee or competitor. IT specialist can also determine
whether a cyber-attack has taken place. Once you have
gathered all the information, you together with your lawyer
can decide on the best course of action.
The 2019 amendment of the Anti-Unfair Competition
Law expanded the scope of persons who are subject to
the provisions of trade secret infringement including all
individuals and entities, rather than only business operators
as it used to be under the previous Law. Currently, natural
persons, legal persons, and non-legal person organisations
other than business operators are also deemed as infringing
on trade secrets if they commit the acts prohibited by the
Law. This means that now you’re also able to enforce your
rights against individual actors not just business operators.
Furthermore, instigating, inducing, or assisting in the breach
of condentiality to acquire, disclose, use, or allow others to
use a trade secret is also illegal under the new Anti-Unfair
Competition Law. For example, if your trade secrets were
misappropriated in the course of a cyber-attack, not just the
hacker who stole your trade secrets can be held liable, but
also the person or the company that ordered the hacker’s
services can be held liable for the misappropriation of your
trade secrets.
Civil litigation
Litigation is the primary means by which you can pursue
a remedy for the misappropriation of your trade secrets in
China. If you are successful, the court can require the infringer
to pay you damages and order the infringer to stop using
the trade secret. The 2019 amendment of the Anti-Unfair
Competition Law added punitive damages for malicious
trade secret infringement, which could be one to ve times
the actual loss or illegal gains. The amendment also makes
it easier for trade secret holders to bring infringement cases
before the courts.
5. Step 5: What to Do When Your Secret is Out
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