China’s Supreme People’s Court Clarifies Trade Secret Protection for Integrated Technical Solutions
Published 9 October 2026
Yu Du
On 8 October 2026, the Intellectual Property Court of the Supreme People’s Court of China (SPC) published a trade secret infringement case involving AROTEC Diagnostics Limited, a New Zealand biotechnology company, and its former employee. The case, which had previously been selected as one of the SPC’s 2025 Typical Anti-Unfair Competition Cases, highlights that a complete technical solution developed through experimentation and optimization may qualify for trade secret protection even if certain individual elements are publicly known.
Case Background
AROTEC Diagnostics Limited (AROTEC) is a New Zealand biotechnology company specializing in biological products and diagnostic materials. The company developed proprietary processes for extracting and purifying proteinase 3 (PR3) from human blood cells, using a combination of specific processing steps, purification techniques, buffer compositions and operating parameters documented in its standard operating procedures (SOPs).
Sun Peng joined AROTEC in November 2011 as a laboratory technician and subsequently became a production manager. His responsibilities included laboratory operations, process optimization, production management and access to the company's technical documentation. Sun signed confidentiality and intellectual property agreements requiring him to protect proprietary information acquired during his employment, including after termination.
Sun left AROTEC on 15 December 2017. On 18 April 2018, he became an 80% shareholder and legal representative of Wuhan Bobaiou Biotechnology Co., Ltd. (Bobaiou), a Chinese biotechnology company established in October 2016.
On 14 May 2018, Bobaiou filed a Chinese invention patent application entitled “A Method for Separating and Purifying Natural Proteinase 3 from Azurophilic Granules of Human Blood Neutrophils”, naming Sun and his wife, also a former AROTEC employee, as inventors. The patent application was published on 2 October 2018 and subsequently granted in April 2021.
AROTEC alleged that Sun had disclosed its confidential technical information to Bobaiou, which used the technology to apply for a patent and manufacture and market competing PR3 products. On 25 March 2022, AROTEC commenced trade secret infringement proceedings before the Wuhan Intermediate People's Court, seeking injunctive relief and RMB 5 million in damages and reasonable enforcement expenses.
Court Decisions
On 28 May 2023, the Wuhan Intermediate People’s Court found that Sun and Bobaiou had jointly infringed AROTEC’s technical trade secrets. It ordered them to cease the infringing activities and pay RMB 1.8 million jointly and severally.
All parties appealed. On 30 December 2024, the SPC issued its final judgment [ https://ipc.court.gov.cn/zh-cn/news/view-5534.html ], dismissing all appeals and upholding the first-instance judgment..
i) Protection of the Complete Technical Solution
One central dispute concerned whether AROTEC’s PR3 purification process constituted protectable trade secrets. The defendants argued that the relevant purification techniques, operational steps and buffer solutions were already disclosed in scientific publications or constituted common technical knowledge.
The SPC rejected this argument, distinguishing between publicly known technical principles and a complete, commercially workable process developed through repeated experimentation and optimization.
As the Court stated:
“The disclosure of specific information in separate pieces of evidence does not establish that the overall technical solution, or the particular steps corresponding to each trade secret, has become publicly known.”
The Court emphasized that selecting and combining purification steps, reagent compositions, concentrations and operating parameters required substantial research and development. The mere availability of individual techniques did not establish that the resulting integrated process was generally known or readily accessible to relevant industry professionals.
ii) Infringement through Patent Filing and Commercial Use
The SPC further found that Sun had access to AROTEC’s confidential SOPs during his employment and was subject to continuing confidentiality obligations.
Comparing Bobaiou’s patent application with AROTEC’s technical information, the Court concluded that their overall technical solutions were substantially identical. Importantly, differences in certain parameters or modifications to a technical process did not necessarily exclude infringement. Under the applicable judicial interpretation, using a trade secret includes using it after modification or improvement.
The Court also considered the timing of the patent application, the relationship between Sun and Bobaiou, the company’s marketing of PR3 products and the defendants’ inability to produce convincing records of independent development. It concluded that Sun had unlawfully disclosed AROTEC’s technical information and that Bobaiou had used it in its patent application and commercial activities.
iii) Injunctive Relief and Damages
The SPC confirmed that publication of the patent application had disclosed certain elements of AROTEC’s confidential technology. However, other elements remained undisclosed and continued to qualify for trade secret protection.
Accordingly, the defendants were required to cease unauthorized disclosure and use of the protected information until it became publicly known. The judgment also maintained restrictions on exploiting the disputed patent during its validity period.
Regarding damages, neither party had sufficiently established the actual losses or profits attributable to the infringement. The SPC therefore upheld the RMB 1.8 million award, taking into account the defendants’ intentional conduct, the commercial value of the technology, the disclosure caused by the patent filing, and the competitive advantages gained through the unauthorized use of AROTEC’s know-how.
Comment
The case reinforces the protection available under Chinese law for integrated technical solutions developed through experimentation, refinement and optimization. Companies should therefore assess the confidentiality of their technical processes as a whole, rather than assuming that the public availability of individual elements necessarily defeats trade secret protection.
The case is particularly relevant to foreign technology companies operating in China. The SPC expressly recognized that trade secrets developed overseas may receive protection under Chinese law, applying relevant international obligations and Chinese trade secret legislation. It also demonstrates that patent filings based on misappropriated know-how may constitute evidence of infringement and may expose the applicants to injunctive relief and damages. Companies should maintain clear technical records, enforce appropriate confidentiality obligations, control employee access to sensitive information and ensure that new patent applications are supported by demonstrably lawful sources of technology.
Case Background
AROTEC Diagnostics Limited (AROTEC) is a New Zealand biotechnology company specializing in biological products and diagnostic materials. The company developed proprietary processes for extracting and purifying proteinase 3 (PR3) from human blood cells, using a combination of specific processing steps, purification techniques, buffer compositions and operating parameters documented in its standard operating procedures (SOPs).
Sun Peng joined AROTEC in November 2011 as a laboratory technician and subsequently became a production manager. His responsibilities included laboratory operations, process optimization, production management and access to the company's technical documentation. Sun signed confidentiality and intellectual property agreements requiring him to protect proprietary information acquired during his employment, including after termination.
Sun left AROTEC on 15 December 2017. On 18 April 2018, he became an 80% shareholder and legal representative of Wuhan Bobaiou Biotechnology Co., Ltd. (Bobaiou), a Chinese biotechnology company established in October 2016.
On 14 May 2018, Bobaiou filed a Chinese invention patent application entitled “A Method for Separating and Purifying Natural Proteinase 3 from Azurophilic Granules of Human Blood Neutrophils”, naming Sun and his wife, also a former AROTEC employee, as inventors. The patent application was published on 2 October 2018 and subsequently granted in April 2021.
AROTEC alleged that Sun had disclosed its confidential technical information to Bobaiou, which used the technology to apply for a patent and manufacture and market competing PR3 products. On 25 March 2022, AROTEC commenced trade secret infringement proceedings before the Wuhan Intermediate People's Court, seeking injunctive relief and RMB 5 million in damages and reasonable enforcement expenses.
Court Decisions
On 28 May 2023, the Wuhan Intermediate People’s Court found that Sun and Bobaiou had jointly infringed AROTEC’s technical trade secrets. It ordered them to cease the infringing activities and pay RMB 1.8 million jointly and severally.
All parties appealed. On 30 December 2024, the SPC issued its final judgment [ https://ipc.court.gov.cn/zh-cn/news/view-5534.html ], dismissing all appeals and upholding the first-instance judgment..
i) Protection of the Complete Technical Solution
One central dispute concerned whether AROTEC’s PR3 purification process constituted protectable trade secrets. The defendants argued that the relevant purification techniques, operational steps and buffer solutions were already disclosed in scientific publications or constituted common technical knowledge.
The SPC rejected this argument, distinguishing between publicly known technical principles and a complete, commercially workable process developed through repeated experimentation and optimization.
As the Court stated:
“The disclosure of specific information in separate pieces of evidence does not establish that the overall technical solution, or the particular steps corresponding to each trade secret, has become publicly known.”
The Court emphasized that selecting and combining purification steps, reagent compositions, concentrations and operating parameters required substantial research and development. The mere availability of individual techniques did not establish that the resulting integrated process was generally known or readily accessible to relevant industry professionals.
ii) Infringement through Patent Filing and Commercial Use
The SPC further found that Sun had access to AROTEC’s confidential SOPs during his employment and was subject to continuing confidentiality obligations.
Comparing Bobaiou’s patent application with AROTEC’s technical information, the Court concluded that their overall technical solutions were substantially identical. Importantly, differences in certain parameters or modifications to a technical process did not necessarily exclude infringement. Under the applicable judicial interpretation, using a trade secret includes using it after modification or improvement.
The Court also considered the timing of the patent application, the relationship between Sun and Bobaiou, the company’s marketing of PR3 products and the defendants’ inability to produce convincing records of independent development. It concluded that Sun had unlawfully disclosed AROTEC’s technical information and that Bobaiou had used it in its patent application and commercial activities.
iii) Injunctive Relief and Damages
The SPC confirmed that publication of the patent application had disclosed certain elements of AROTEC’s confidential technology. However, other elements remained undisclosed and continued to qualify for trade secret protection.
Accordingly, the defendants were required to cease unauthorized disclosure and use of the protected information until it became publicly known. The judgment also maintained restrictions on exploiting the disputed patent during its validity period.
Regarding damages, neither party had sufficiently established the actual losses or profits attributable to the infringement. The SPC therefore upheld the RMB 1.8 million award, taking into account the defendants’ intentional conduct, the commercial value of the technology, the disclosure caused by the patent filing, and the competitive advantages gained through the unauthorized use of AROTEC’s know-how.
Comment
The case reinforces the protection available under Chinese law for integrated technical solutions developed through experimentation, refinement and optimization. Companies should therefore assess the confidentiality of their technical processes as a whole, rather than assuming that the public availability of individual elements necessarily defeats trade secret protection.
The case is particularly relevant to foreign technology companies operating in China. The SPC expressly recognized that trade secrets developed overseas may receive protection under Chinese law, applying relevant international obligations and Chinese trade secret legislation. It also demonstrates that patent filings based on misappropriated know-how may constitute evidence of infringement and may expose the applicants to injunctive relief and damages. Companies should maintain clear technical records, enforce appropriate confidentiality obligations, control employee access to sensitive information and ensure that new patent applications are supported by demonstrably lawful sources of technology.