Navigating the Minefield of Trade Secrets Protection in China

30 Pages Posted: 1 Jun 2014 Last revised: 27 Jan 2023

See all articles by Daniel C. K. Chow

Daniel C. K. Chow

Ohio State University (OSU) - Michael E. Moritz College of Law

Date Written: May 30, 2014

Abstract

Many MNCs now consider trade secrets to be the most important intellectual property right in China, ahead of patents, trademarks, and copyrights. While trade secrets have become more valuable than ever as a business asset in China, many MNCs also find that protecting their trade secrets in China is full of pitfalls and traps. Unlike in the case of patents, trademarks, and copyrights, China has no unified law governing trade secrets, but has disjointed provisions scattered throughout various laws. The pitfalls are also created by a high evidentiary burden in proving a theft of a trade secret that many MNCs find difficult to meet. China places an emphasis on documentary proof of the theft of the trade secret, which can be difficult to obtain. A comparison of the enforcement of trademarks in China with the enforcement of trade secrets illustrates how much more difficult it is to enforce trade secrets. In addition, MNCs that attempt to enforce their trade secrets can find themselves caught in risky and dangerous entanglements with Chinese enforcement authorities that demand illegal payments as a price of enforcement.

While these enforcement problems admit of no easy solutions given the realities of China’s current trade secrets legal regime, many of these problems can be avoided altogether if MNCs implemented some simple advanced planning and preventative measures. MNCs should invest in these preventative measures, which, if carefully implemented, can avoid the traps in China’s murky enforcement regime while at the same time protecting valuable confidential and propriety information of the company.

JEL Classification: K20, K29, K33

Suggested Citation

Chow, Daniel Chee King, Navigating the Minefield of Trade Secrets Protection in China (May 30, 2014). 47 Vand. J. Transnat'l L. 1007 (2014), Ohio State Public Law Working Paper No. 258, Available at SSRN: https://ssrn.com/abstract=2443922

Daniel Chee King Chow (Contact Author)

Ohio State University (OSU) - Michael E. Moritz College of Law ( email )

55 West 12th Avenue
Columbus, OH 43210
United States
614 292-0948 (Phone)
614 292-3202 (Fax)

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