商业秘密的保护途径企业司法行政ipkey

Approaches to Protection of Trade Secrets in ChinaHuang YongSchool of Law of University of International Business and EconomicsArticle 10 of the Law of the Peoples Republic of China against Unfair Competition (“Law against Unfair Competition”) stipulated that trade secrets refer to the technical information and business information, which is not known to the public, which is capable of bringing economic benefits to the owners of rights, which has practical applicability and for which the trade right owner has taken measures to keep secrets.I. Necessity to Protect Trade SecretsTrade secrets may bring economic benefits to the owners of rights so that more people will be encouraged to discover and possess the trade secrets. To certain spatial-temporal extent, the more people know about a trade secret, the more contributions will be made to the social progress. However, if no protection is made to the trade secrets on legal sense, there will no owners rights at all and what the right owner can see is that his efforts are being used free of charge by the whole society. Therefore, it is necessary to protect the trade secrets, embodying in the following aspects: (A) Incentive Effect and Economic Rationality of Trade Secret ProtectionAs the trade secrets are those resources and information which are obtained in the course of operating activities done by the operators and which are resources to carry out further operations and the basis to make decisions for operators, it will become difficult for operators to maintain their business if their trade secrets are severely infringed, and the social progress will be obstructed because such infringement will deprive the operators of the incentive mechanism for information innovation. It is also to protect the fairness and safety of social economic by protecting the trade secrets. Confirming and safeguarding the property right of trade secrets aims at making a reasonable arrangement for the innovation cost and returns so as to bring the cost and the returns closer and to encourage people to develop and create intangible properties. To protect the trade secrets means that certain property title will be protected to some extent for the unique and useful information and means the results of personal efforts can become certain and foreseeable.(B) Protection of Trade Secrets Benefits Economic Efficiency and Effective Resource AllocationThe exchanges in market economy represent the respect to others labor and can satisfy the self-interests. The trade secret has the positive externality, namely, the trade secret can benefit the right owner as well as the whole society without imposing social load. On one hand, the trade secrets, as the intangible asset, has not the characteristic of exclusivity as a material object has, so trade secrets will not cause the negative-sum effect or Zero-sum effect which benefits one party and damages the other party. The possession of a trade secret will not preclude others from obtaining the same information through proper efforts. On the contrary, nobody will pay great efforts to obtain such valuable information if the trade secret is not under protection. The protection of trade secrets by law has clear boundary. Taking the Law against Unfair Competition as example, the law does not grant either the preoccupancy right or exclusive right to the trade secrets so that people can obtain the same property right by decoding the trade secrets through independent development, reverse engineering, etc. This compatible feature is under the premise that it benefits ourselves but does not damage others. The legal information communication which makes it come to the public domain can enable such valuable information to create a positive social effect so that the whole social economy will greatly benefit from the information communication.(C) IPR Law Lacks in Protection of Non-patentable TechnologiesArticle 48 of the Law of Patent of P.R China states that where any entity which is qualified to exploit the invention or utility model has made requests for authorization from the patentee of an invention or utility model to exploit its or his patent on reasonable terms and such efforts have not been successful within a reasonable period of time, the patent administrative organ under the State Council may, upon the application of that entity, grant a compulsory license to exploit the patent for invention or utility model. As the patent system balances the relationship between the patentees interests and the social interests, it means that any company which has applied for the patent to protect its know-how will give up the monopolistic control of such know-how. Therefore, when a company chooses to protect its technology by patent, they should take all kinds of factors into consideration. For the technologies which cannot be protected by the patent or which are not suitable to be protected by patent or which can be better protected by a way of trade secrets, they should be protected by the trade secret system so as to maintain the interests or competitive advantages.(D) IPR Lacks in Detailed Measures for Protection of Trade SecretsAlthough the Trade-related Aspects of Intellectual Property Rights (TPIPS) defines the “protection of unprotected information” as the content of intellectual property right in a way of enumeration, many countries do not lay down detailed provision in their IPR laws but incorporate the protection of trade secrets into the protection system of their competition laws in practice so as to enable the IPR law system to protect the copyright, trademark right and patent right in a complete and centralized way. Just as the World Intellectual Property Organization (WIPO) states in the Notes Concerning the Model Provisions on Protection against Unfair Competition, “the protection against unfair competition constitutes a supplementary protection, additional to the protection of specific intellectual property subject matter”. As the intellectual property right is featured with the timeliness, locality, exclusivity and proprietariness, it can be distinguished from other rights by statutory procedures. For the ways of IPR protection, we can define the scope, period and space for a given IP right and to prohibit others. It is similar with the protection of the property right. However, the trade secrets have no such features compared with the IPR, so the effective protection of the trade secrets should be made according to their inherent features. Most scholars tend to take the trade secrets as an independent branch of IPR law, proposing that a separate law should be enacted independent of the traditional system of IPR law, namely the trade secrets law. The U.S, which pays more attention to the IPR protection, has formulated the Uniform Trade Secrets Act, which clearly takes the trade secrets as a kind of property right, which can be protected by the infringement theories and the contract theories.II. Laws, Regulations and Judicial Interpretations in relation to Protection of Trade Secrets (See the attachment for detailed provisions)(A) Law against Unfair Competition (Articles 10, 20 & 25)(B) Interpretation of the Supreme Peoples Court on Some Issues Concerning the Application of Law in the Trial of Civil Cases involving in Unfair Competition (FA SHI2007No.2) (Articles 9, 10, 11, 12, 13, 14, 15, 16, 17 & 18)(C) Law of the Peoples Republic of China on Employment Contract (Article 23, 24 & 90)(D) Criminal Law of the Peoples Republic of China (Article 219 Offence of Infringing upon Trade Secrets)(E) Interpretation of the Supreme Peoples Court and the Supreme Peoples Procuratorate on Some Issues concerning the Specific Application of Law in Handling Criminal Cases Involving in Infringement upon Intellectual Property Rights (Article 7)III. Traits of Trade Secrets and Protection Features(A) Main Traits of Trade Secrets1. Confidentiality. The expression of “Unknown to the public” constitutes the most basic element of the trade secrets. The trade secrets belong to the nonpublic information in nature. No matter how much any technical information or business information weighs, it will loose the precondition and possibility to be a trade secret as long as such information becomes public. 2. Practical Applicability: means the economic interests and competitive advantages which may be brought by the trade secrets to the owners of rights.3. Secrecy: the right owner must take reasonable measures to keep secrecy; otherwise such information will not constitute a trade secret.(B) Differences between Trade Secrets and Other Intellectual PropertiesThe nature of trade secret always can influence the basic theory of a country on protection of trade secrets, which is a key issue concerning the definition of the basis, ways and level for protection of trade secrets and also the core basis for confirmation of the conditions of constituting the trade secrets. At present, the IPR theoretical circle and the judicial circle in China tend to the property right theory, proposing to incorporate the trade secrets into the protection system of the IPR law.We often bring the trade secrets in relation with the copyright, trademark right and patent right because they fall within the IP rights, taking the value and uniqueness as the common features. The traits of trade secret make it different from intellectual properties clearly:1. Differences in Confidentiality and Publicness: the principle of public summons and public trust is one of important principles in the property law. The possession of and the change to the property right often requires to be completed in a statutory way, and the direct and periodical protection of copyright, trademark right and patent right in the IP rights by law is also at expense of the their secrecy. However, the confidentiality is a unique feature of the trade secrets. The trade secret owner should take proper confidentiality measures objectively with the hope that such trade secret will not be disclosed to others to keep the trade secret only for his own use.2. Difference in Nature of Protection Targets: the targets under the protection of copyright, trademark right and patent right are always some specific objects which are in compliance with the laws and regulations and are subject matters which can be recognized by law or related authorities through the statutory procedures. However, there is no definite protection target in the trade secrets. Normally, the protection target of the trade secrets is the information which the owner deems within the scope of the trade secrets and requires confirmation by the judicial authorities according to the traits of the trade secrets in case of any dispute arising in relation to the trade secrets.3. Difference in Openness of Transfer of Property Rights: The establishment of the property right system and the IPR system is for the purpose of protecting the interest of the right owners on one hand, but it is of great social significance, such as to define the property right and protect the security of exchanges, so it can bring benefits to the promotion of technological development and exchange. However, it is very difficult to assess the value of a trade secret, and the transfer of a trade secret does not preclude the possibility of transfer of property right in such trade secret. The protection of trade secrets addresses more about the protection of the right owner. As the trade secrets have irreplaceable value, serious consequences may be caused in case of any infringement upon trade secrets.4. Independence: The trade secrets can exist independently. A patent system should coexist with the trade secret system, so the patent system cannot exist without the trade secret system. There is an interval from the development of a patent to the grant of the patent, so the trade secret protection system is required during such interval to protect the public technology, the phase-to-phase technological achievements and the technical information. (C) Features of Protection of Trade Secrets 1. Wide Scope of Protective Technologies: the scope of technologies under the protection by the trade secret system is wider than the protection by the patent system. All technologies under the protection by the patent system can fall within the protection by the trade secret system. The patent system cannot help for some technologies which can be protected by the trade secret system.2. Relatively Low Cost: the cost on protection of trade secrets is relatively low.3. High Difficulty: it is difficult and complicated to protect the trade secrets, so it requires more self power.4. Weaker Protection by Trade Secret System: Compared with the patent protection, the protection by the trade secret system is much weaker.5. Be help to control the know-how by enterprises: Choosing the trade secret system to protect the trade secrets will be in favor of the control and monopoly of the know-how by enterprises. In particular for some difficult technologies which cannot be developed by other enterprises and individuals within a number of years, the trade secret system can be selected for protection of such technologies.IV. Measures of Remedies for Infringement upon Trade Secrets1. Civil Relief: to lodge the civil action to the peoples court.This is a way by which the party in violation of the confidentiality agreement is required to take the responsibilities for breach of contract or the offender is requirement to take responsilities for the infringement upon a trade secret according to the provision of the civil law, and the right of claim for civil remedies is based on the contract or the infringement act. According to the General Principles of Civil Laws, the Contract Law, the Law against Unfair Competition and the Civil Procedure Law, any entity may lodge the civil action directly to the peoples court where any trade secret is infringed.(1) Legal Proceeding against Breach of ContractsLegal Basis: Contract Law & Law on Employment Contract (Articles 23, 24 & 29)According to the confidentiality contract for trade secrets, where the party under the confidentiality obligation is in violation of the confidentiality contract, discloses or use any trade secret accessible to him without the authorization, he shall be liable for such breach. In this case, the entity can protect its legal rights and interest by a way as agreed in the confidentiality contract or by lodging an action to the peoples court which has the jurisdiction where the defendant is located or the contract is performed according to the civil procedure law.(2) Infringement ProceedingLegal Basis: General Principles of Civil Law (Articles 117, 130 & 134) and Law against Unfair Competition (Articles 10 & 20) Where the infringement upon the trade secrets by the infringer has caused damages to the entity, the entity may lodge an action to the peoples court which has the jurisdiction (the court of the place where the defendant is located or the where the infringement occurs) to require the defendant to take the civil responsibilities to stop the infringement and pay the compensation for loss suffered.The entity shall provide the following facts if he claims for damages: the evidence certifying the entity has such trade secret and the evidence certifying that the entity has taken the confidentiality measures and the evidences certifying the offender has committed the infringement. Such evidences include those certifying that the offender has possessed, used or disclosed such information which are same or similar with the trade secret information owned by the entity, those certifying that the offender has the opportunity or capability to access such trade secrets and those certifying that such trade secret infringement has caused damages to the entity.(3) Ways to Take Civil Responsilities: to pay the penalties, to cease the infringement, to eliminate the effects and to compensate for loss.(4) Case Analysis:A. Jilong Electromechanical (Beijing) Co., Ltd. v Xie Yanqiang & Beijing Sipuruide Science & Technology Co., Ltd. regarding the trade secret infringement;B. No.18 Research Institute of Ministry of Electronic Industry v Sun xx, Shao xx and Qinghuangdao Futian Power Source Company regarding unfair competition.2. Criminal RemediesLegal Basis: According to Article 219 of the Criminal Law of the Peoples Republic of China, any person who infringes upon commercial secrets shall, if the offence causes another person (enterprise) who enjoys the rights of the trade secrets to suffer heavy losses, be sentenced to fixed-term imprisonment of not more than three years or criminal detention, and concurrently or independently be sentenced to a fine. If the offence causes especially serious consequences, the offender shall be sentenced to a fixed-term imprisonment of not less than three years and not more than seven years, and concurrently be sentenced to a fine.If the offence against trade secret constitutes the element of committing crimes and bring a loss of more than RMB 500,000 to the owner of the trade secret right, such offence shall fall within the expression of “causing the owner of trade secret right to suffer heavy loss”, so the right owner may protect its legal rights and interest in accordance with the criminal law. The criminal procedures include three types: public prosecution procedure, private prosecution procedure and criminal procedure with collateral civil proceedings.When the infringement upon the trade secrets constitutes the crime, the owner of the trade secret right may report to the public security authorities for investigation. After the investigation is finalized, the case should be delivered to the peoples procuratorate who may lodge the public prosecution before the peoples court at the same level if the procuratorate considers that the offender should take the criminal liability based clear facts and adequate evidences.(B) Administrative Protection of Trade SecretsLegal Basis: According to Article 3 of the Law against Unfair Competition, the administration for industry and commerce of the people's governments at or above the county level shall exercise supervision over and inspection of unfair competition acts. Where any party infringes on trade secrets, the relevant administration for industry and commerce shall order it or him to cease the illegal act and may, according to circumstances, impose on it or him a fine of more than RMB 10,000 Yuan but less than RMB 200,000 Yuan.The administration authorities for industry and commerce are responsible to deal with the trade secret infringement. According to the Law of the Peoples Republic of China on Administrative Punishments and other administrative regulations and rules, any entity may submit the compliant to the administration for industry and commerce at county level or above when he considers his trade secrets have been infringed, and provide evidences in relation to such infringement. When the competent administration for industry and commerce determines that the infringement upon trade secrets by the offender is established, the offender shall be required to take the corresponding administrative responsibilities for his act according to the Law on Administrative Punishments and other laws and regulations. The enterprise may request the administration for industry and commerce to mediate the issues concerning the damages and the administration for industry and commerce should participate in the mediation. After the administrative punishment order is issued, the trade secret right owner may lodge an action to the court with such order, claiming for compensation. The administrative punishment order has the legal effect as evidence.V. Protection of Trade Secrets by Enterprises(A) To sign th