China's updated Anti-Unfair Competition Law tightens up the law in the areas of trade secrets and confidentiality 新"反不正当竞争法"加强了对雇主保密信息的保护

This bilingual article looks at how the new law might offer better protection to employers' trade secrets and confidential information.

The long-awaited revisions to the 1993 Anti-Unfair Competition Law were finally approved by the standing committee of National Congress on November 4, 2017 (“New Law”) and will take effect on January 1, 2018.  The final form of the revisions has been eagerly anticipated following two previous drafts of the revised law, which were released for public consultation in February and September, respectively.

众人期待的《反不正当竞争法》修订案(“新《反不正当竞争法》”)终于在2017年11月4日由全国人大常委会通过,并将于2018年1月1日正式生效。最终通过的修订案是经过三次修正的版本,第一次和第二次修订案草案分别于2017年2月和9月对外公开征求公众意见。

In addition to the revisions to anti-bribery related provisions, the New Law contains some important changes in relation to trade secrets and confidentiality. While the changes are not as detailed as they could be, and there may still be questions as to interpretation and how the provisions will be enforced, the revisions nevertheless should be helpful for better protecting an employer’s confidential information in addition to the existing legal mechanisms available, such as non-compete laws and regulations.

新《反不正当竞争法》除了对引人注目的反商业贿赂相关规定的修订之外,也包含对商业秘密相关规定的重要修订。虽然目前的修订仍然不是十分具体,且对这些规定的解释与执行仍然还有遗留问题,但修订后的规定和已有的其他法律规定,如:竞业限制等,加强了对雇主保密信息的保护。

According to the Article 9 of the New Law, “ a business operator shall not engage  in any of the following infringements of trade secrets :

  1. obtaining the trade secrets from right holders by theft, bribery, fraud, intimidation or other improper means
  2. disclosing, using or allowing others to use the trade secrets of right holders obtained by the means mentioned in the preceding paragraph, or
  3. disclosing, using or allowing others to use the trade secrets under its possession by breaching agreements or violating the requirements of the right holders on keeping the trade secrets confidential.

Where a third party obtains, discloses, uses or allows others to use the trade secrets of others when it has, or should have, the clear knowledge of the employee or former employee of the right owner, or any other entity or individual conducts the illegal acts infringing the trade secrets of the right holders, the third party shall be deemed to have infringed on the trade secrets of others.

For the purpose of this article, trade secrets refer to the technical information and operational information that is not known to the public, and has commercial value and for which the right holders have taken measures to ensure confidentiality.”

根据新《反不正当竞争法》第9条的规定,经营者不得实施下列侵犯商业秘密的行为:

(一)以盗窃、贿赂、欺诈、胁迫或者其他不正当手段获取权利人的商业秘密
(二)披露、使用或者允许他人使用以前项手段获取的权利人的商业秘密
(三)违反约定或者违反权利人有关保守商业秘密的要求,披露、使用或者允许他人使用其所掌握的商业秘密。

第三人明知或者应知商业秘密权利人的员工、前员工或者其他单位、个人实施前款所列违法行为,仍获取、披露、使用或者允许他人使用该商业秘密的,视为侵犯商业秘密。
本法所称的商业秘密,是指不为公众所知悉、具有商业价值并经权利人采取相应保密措施的技术信息和经营信息。

Based on the above, there are three key revisions in the New Law in terms of protection of confidential information.  Firstly, the definition of trade secrets.  The New Law specifies “information of commercial value” will be protected, replacing the previous “information that could bring economic benefit to the right holder and have practical usage” in the old law.  This is in essence just a small change, but may widen the scope for what information is protected and ease the plaintiff’s burden for proving that that certain information is a trade secret, because the new definition seems broader and there is no express requirement to show practical usage. We will keep a close eye regarding what factors the courts or relevant government authorities take into consideration when determining what constitutes “commercial value” in practice.

根据以上规定,新《反不正当竞争法》在保密信息的保护方面有三个主要修订。首先是对商业秘密定义的修改。新《反不正当竞争法》 用“具有商业价值的信息”替代了之前的“能够为权利人带来经济利益,且具有实用性。”这个定义的修改并不算实质性修改,但扩大了保密信息的范围,并且对于原告方来讲,因为保护范围的扩大,并且无需证明实用性,可能会一定程度减轻其举证难度。我们会进一步关注法院和相关政府部门在实践中确定“商业价值”时所考虑的因素。

Significantly, the New Law also expressly provides protection for trade secrets in the context of former employees moving to a new employer or business. In particular, if a third party obtains, discloses, uses or allows others to use the trade secrets of another party when it has, or should have, the clear knowledge that such information is being unlawfully used or provided by a former employee of the rightful owner (or by another third party who happens to provide such information), the third party can be deemed to have infringed on the trade secrets of others.

其次,新《反不正当竞争法》比较重大的变更是明确了员工跳槽情形下的商业秘密保护。尤其明确“第三人明知或者应知商业秘密权利人的员工、前员工或者其他单位、个人实施前款所列违法行为,仍获取、披露、使用或者允许他人使用该商业秘密的,视为侵犯商业秘密。”

The background to this revision is that confidentiality infringements involving former employees have resulted in a large number of disputes and legal cases. It has been very hard for right holders to protect themselves by taking action against a third party (such as a subsequent employer), if a former employee uses confidential information at or for the benefit of the third party, because the third party / subsequent employer generally is not a party to any agreements signed by the former employer and employee, so has no contractual relationship with the former employer. As such, the revised Anti-unfair Competition law provides a possible route for a former employer to file a claim against a third party / subsequent employer, in addition to other potential legal actions against the former employee only, such as enforcement of any non-compete obligations. 

此修改的背景之一是在现实生活中跳槽员工引发的商业秘密侵权案件数量较多。一般情况下,若员工跳槽后继续使用前雇主的保密信息,或将保密信息提供给第三人,由于第三人不属于前雇主与员工之前所签署的任何协议的当事方,权利人很难直接提出针对第三人的诉讼或请求。虽然实践中也是如此操作,新法对此进一步明确,前雇主除了可以依据竞业限制协议针对前员工提出请求以外,还可以选择向第三人或前员工的新雇主提出请求。

A third and eye-catching revision in the New Law relates to how to determine liability for infringement of the trade secret provisions.  According to Article 17 of the New Law, “if any business operator violates the trade secret related clauses” and “if it is hard to determine the actual damage caused to the right holder, or to determine the unlawful benefit received by the infringer, the court can award compensation of up to RMB three million. ” This is the rough equivalent of USD 475,000.

新《反不正当竞争法》在商业秘密保护方面的第三个修订是针对侵犯商业秘密时的法律责任的确定问题。根据新《反不正当竞争法》第17条规定,“若任何经营者权利人因被侵权所受到的实际损失、侵权人因侵权所获得的利益难以确定的,由人民法院根据侵权行为的情节判决给予权利人三百万元以下的赔偿”,约等于475,000美元左右的赔偿。

Under Chinese law, for any infringement related cases, compensation is usually determined according to either actual damage caused to the right holder, or by any illegal benefit gained by the infringer through the infringing activities.  However, in practice, it is often extremely difficult to quantify or prove either of these figures. The New Law provides the possibility for compensation even if damages or illegal benefit cannot be clearly determined. This concept may take a reference from relevant laws regarding intellectual property rights infringements. This new provision in relation to trade secrets should act as a useful deterrent against potential infringement.

在中国法下,侵权有关责任的确定,一般都是根据给权利人造成的损害,或者侵权人因侵权所获得的利益作为依据来定。但是实践中,这些损害或损失经常是很难界定的。新《反不正当竞争法》对于在难以界定损害或损失的情况下如何确定法律责任进行了规定。这可能借鉴了中国知识产权保护相关规定中的概念,对于潜在商业秘密侵权来讲,有一定的威慑作用。

One point which is not clear is whether a “former employee” will be deemed to be a “business operator” under Article 2 of the Anti-Unfair Competition Law. There has been considerable discussion on this point, although given that the former employee and the new employer are usually listed as joint defendants, and bear joint and several liabilities if an infringement is confirmed, this probably is not such a big issue in infringement cases. As always, it will be important to monitor how the New Law is interpreted and enforced as cases are brought and there additional implementing regulations or legislative guidance may also be issued in due course. 

新《反不正当竞争法》并没有在修改中明确是否“前雇员”会被纳入为《反不正当竞争法》第2条规定的“经营者”的范畴。关于这点,在实务中有不少争论。考虑到在商业秘密侵权案件中,前雇员和新的雇主经常被列为共同被告,对被确认的侵权行为承担连带责任,所以这个在侵权案件中不会是太大的障碍。 我们会密切关注新《反不正当竞争法》在这方面的相关案例与权威解释。

At present, using the Anti-Unfair Competition Law is probably the final remedy for a former employer to take action in relation to disclosure and use of its confidential information by a former employee in his/her new circumstances, if there are no other legal remedies available under other laws and regulations. If there are any agreements in place, such as non-compete or other similar agreements,  the courts tend to look at the rights and obligations in those agreements first before considering the Anti-Unfair Competition Law. However, the New Law seems to provide enhanced protection for employers in situations where former employees use trade secrets when working for subsequent employers, not least because right holders will have a basis to claim against the subsequent employer directly.

目前对于前雇主来讲,运用新《反不正当竞争法》是对于前员工跳槽后可能披露和使用商业秘密的行为提出请求的最后救济手段。或者说,新《反不正当竞争法》的使用前提是在其他法律框架下没有提供相关救济。若有其他方式,如竞业限制协议或其他类似约定,法院则会首先根据这些协议的规定确定双方权利义务。但是总体上,新《反不正当竞争法》对商业秘密保护的规定有了进一步明确与细化,权利人可以直接依据新《反不正当竞争法》提起相关诉讼,一定程度上加强了对前雇主方的保护。

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This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document. Simmons & Simmons is registered in China as a foreign law firm. We are permitted by Chinese regulations to provide information on the impact of the Chinese legal environment and also to provide a range of other services. We are not admitted to practise in China and cannot, and do not purport to, provide Chinese legal services. We are, however, able to co-ordinate with local counsel to issue a formal legal opinion should this be required.