China’s Anti-Unfair Competition Law Amendment: Stronger Protection of Trade Secrets

The amended Anti-Unfair Competition Law entered into force in China in the end of April 2019. It is one of a series of laws that have been revised in the course of improving IP protection in China.

In our last blog post (link) we analyzed the changes in China’s Trademark Law, where it is questionable how great the practical relevance will actually be. In contrast, a complete paragraph has been added to the Anti-Unfair Competition Law, which is likely to have a very direct and specific impact on the court decisions. It regulates the burden of proof in trade secret cases in civil processes and lowers the hurdles to successful litigation. 

So far, the burden of proof in a trade secret case has been entirely on the right holder. The right holder not only had to prove that the trade secrets were protected in accordance with the legal requirements, but also that the information misappropriated by the opposed party actually constituted trade secrets and had been obtained illegally.

These requirements have now been limited to a more realistic level: If the plaintiff can prove that the information has been protected and can provide prima facie evidence of a trade secret violation, the burden of proof is passed to the respondent. The defendant in turn, must prove that the information in question is not a trade secret under the Anti-Unfair Competition Law. The same applies to proof of infringement of a trade secret. After preliminary evidence of the infringement, e.g. that the opposed party had access to the information and that it was published or used, it is up to the defendant to provide counter-evidence showing that there was no infringement. 

Another very favourable change is that after amendment, not only business operators can be held liable for the misappropriation or theft of trade secrets, but also any natural or legal person. 

The amendment of the Anti-Unfair Competition Law is an important piece in the puzzle to improve the IP protection system in China. However, the practical implementation by the courts remains to be seen.

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