Judicial Rules and Practical Implications of Shanghai Courts’ Ten Typical Cases on Trade Secret Protection
Published 30 April 2026
Sarah Xuan
Judicial Rules and Practical Implications of Shanghai Courts’ Ten Typical Cases on Trade Secret Protection
On April 23, 2026, the Shanghai High People’s Court announced and released typical cases of Shanghai courts concerning trade secret protection, presenting in a concentrated manner the judicial protection achievements of Shanghai courts in recent years in such areas as civil and criminal trade secret cases and pre-litigation conduct preservation. The ten cases released this time cover technical secrets and business secrets, involving multiple key industrial sectors, including communications, semiconductors, medical devices, chemical trading, online games, artificial intelligence chips, and new energy vehicles. They include not only traditional disputes such as disclosure of secrets by departing employees and disputes over customer information, but also new types of disputes and disputes arising in new business formats, such as premature disclosure of game-version content, illegal reproduction of artificial intelligence chip technology, and spying upon and providing trade secrets for overseas parties.
This article analyzes these cases one by one and summarizes their judicial rules and practical implications.
I. The Infrared Remote-Control Technical Secret Case: A Claim for Protection of Technical Secrets Must Be Supported by Clearly Defined Content and Carriers The first case was a dispute over infringement of infrared remote-control technical secrets among an information technology company, a terminal company, a technology company, and a certain company. The plaintiff asserted that it had launched relevant smart products as early as 2012 and had accumulated technical experience in infrared remote control. Thereafter, it cooperated and conducted joint debugging with the defendants regarding the infrared-control function of mobile phones, and entered into confidentiality agreements. The plaintiff alleged that the defendants, under the guise of commercial cooperation, obtained its infrared remote-control technical secrets and applied the relevant technology to chips and mobile phone products, and therefore requested cessation of infringement and damages of more than RMB 100 million.
The court ultimately did not support the plaintiff’s claims. The core reason was that the technical information claimed by the plaintiff did not satisfy the statutory requirements for trade secrets, and some of the so-called “secret points” lacked support from any carrier. Even assuming that the relevant technical secrets were established, the plaintiff also failed to prove that the defendants had access to the technical secrets at issue, and failed to prove that the alleged infringing information and the secret information it claimed were substantially identical. Accordingly, the court of first instance dismissed all claims, and the court of second instance affirmed the original judgment.
The key point in the trial of this case lies in the preliminary and stringent examination of the “establishment of technical secrets.” Trade secrets are not established merely by a unilateral assertion of the right holder, and this is particularly true of technical secrets. Because technical information is intangible, complex, and divisible, the right holder must clearly identify the specific technical content for which protection is claimed and provide carriers capable of embodying such technical content, such as documents, drawings, code, experimental records, and technical solutions. The court must not only examine whether the relevant information is secret, valuable, and subject to confidentiality measures, but must also further determine the time when the carrier was formed, whether the carrier can reflect the technical content alleged by the right holder, and whether the carrier is original or credible.The significance of this case is that it sends a clear rule signal to market participants: protection of technical secrets is not protection of abstract R&D experience, cooperation processes, or general technical capabilities; rather, it is protection of specific, definite, identifiable information that is controlled by confidentiality measures and has commercial value. When asserting rights in technical secrets, enterprises should, in the ordinary course of business, complete the archiving of technical materials, version management, access control, and fixation of secret points. Otherwise, even where a commercial cooperation relationship and confidentiality agreement exist, it may still be impossible to prove in litigation the establishment of trade secrets and the facts of infringement.
II. The “Possession-Type” Technical Secret Case Concerning Crystal-Growing Furnace Drawings: Illegal Possession of Trade Secrets May Also Constitute Infringement The second case involved technical secrets in drawings of semiconductor crystal-growing furnaces. The plaintiff, a semiconductor company, asserted that the defendant, Fu, as a senior manager and member of the confidentiality team during his employment with the company, had access to design and process R&D information concerning crystal growth systems. During his employment, he used a USB flash drive to copy crystal-growing furnace drawings and repeatedly sent emails involving technical secrets from the company email account to his personal email account. After his departure, Fu was subjected to criminal liability for other criminal offenses. The plaintiff therefore filed a civil action for infringement of technical secrets, seeking cessation of infringement and damages of RMB 5 million.
The court held that Fu’s transfer of the company’s technical secrets to his personal laptop lacked any lawful basis and constituted acquisition of technical secrets by improper means. Although there was no evidence in the case proving that he further disclosed, used, or allowed others to use the technical secrets, the illegal transfer and possession themselves had already created potential risks for the right holder and could compel the enterprise to increase prevention costs. Accordingly, the court ordered Fu not to disclose, use, or allow others to use the technical secrets at issue, and to compensate economic losses and reasonable rights-enforcement expenses in the amount of RMB 100,000. The judgment was affirmed on appeal.
The key value of this case lies in confirming the boundaries of liability for “possession-type” infringement of technical secrets. In traditional trade secret cases, the right holder often must prove that the infringer disclosed, used, or allowed others to use the secret information. However, in high-tech fields, once trade secrets are illegally copied and transferred to personal devices, even if no actual utilization has yet occurred, the right holder is placed in a state of high uncertainty and risk. This is especially so for information such as semiconductor drawings, process parameters, and R&D materials; once leaked, the damage may be difficult to reverse.
The court did not completely deny the existence of damage on the ground that evidence of actual use was absent; instead, it determined damages in its discretion from the perspectives of potential harm and prevention costs, reflecting the idea that trade secret protection extends from “ex post compensation for damage” to “risk prevention and control.” For enterprises, this case indicates that particular attention should be paid to departure handover, device audits, email traceability, control over external storage media, and management of senior-management access permissions, so as to reduce the risk that “the secret remains, but the carrier has gone out of control.”
III. The Case Concerning “Passive Use” of Technical Information Relating to Medical Devices: Reference to Another’s Technical Secrets May Also Confer an Improper Competitive Advantage The third case was a technical secret dispute among Hangzhou Qi, a medical device company, Shanghai Yu Medical Company, Shanghai Xin Medical Company, and an individual, Wu. Wu had formerly worked at Qi and was subject to confidentiality obligations. Later, when arranged by Yu to conduct project-establishment research for a medical device project, he provided to members of the project team, for their reference, medical device technical information that he had privately retained from his former employer. Yu and its affiliated company subsequently applied for patents in the same field, but upon comparison, the relevant patents and the technical secrets at issue were materially different in terms of technical route, structure, function, and effect. Qi alleged that the defendants induced theft and used technical secrets for R&D and production, and claimed more than RMB 86 million in damages.
The court found that the technical information at issue claimed by Qi constituted technical secrets. Wu, in breach of his confidentiality obligations, retained without authorization and provided the relevant technical information to Yu, which constituted infringement. Although Yu did not directly copy the technical secrets into the final R&D results, and the relevant patents were not substantially identical to the secrets at issue, its reference to the technical secrets during project-establishment research could provide R&D personnel with guidance and ideas, reduce research time and R&D costs, and thereby obtain a competitive advantage. Therefore, the court held that such “reference” also constituted an act of using technical secrets in production and business operations, and ordered Wu and Yu to delete the technical documents at issue and jointly compensate RMB 600,000.
The highlight of the judgment in this case lies in its expansive but bounded interpretation of the meaning of “use of trade secrets.” The value of trade secrets is not reflected only in complete copying, direct production, or formation of the same technical solution; it may also be reflected in helping competitors avoid trial and error, shorten the R&D cycle, clarify the technical direction, and eliminate ineffective paths. In other words, trade secrets may be “actively used” or “passively used.” Although the latter may not necessarily leave, in the final results, any technical expression identical to the secret information, it may still be substantively transformed into a competitive advantage.
At the same time, the court did not, as a matter of course, presume all subsequent R&D results to be infringing results. As to those parts for which there was no substantial connection between the accused patents and the technical secrets at issue, the court did not support the right holder’s allegations of higher-degree infringement, such as use in improvements or product manufacturing. This adjudicatory approach takes into account both trade secret protection and the space for independent R&D: it prevents competitors from evading liability by asserting that they “looked at it but did not copy it,” while also avoiding undue restrictions on others’ independent R&D merely because the right holder shows prior access.
IV. The Case Concerning Customer and Supplier Information of Departing Employees: Customer Relationships Do Not Necessarily Constitute Business Secrets The fourth case arose in the field of chemical product purchase and sale. The plaintiff, Sui Company, asserted that its customer materials, sales strategies, supplier information, and other information constituted business secrets. The defendants, Zhang and Zheng, had been employees of Sui, and later established or controlled several companies engaged in the same type of chemical product business. Sui alleged that the two defendants breached their confidentiality and non-compete obligations and disclosed and used its trade secrets; it further alleged that the relevant companies and supplier Tian Company committed joint infringement, and therefore sought cessation of infringement and damages of more than RMB 22 million.
The court did not support Sui’s claims. The court held that customer information constituting trade secrets must satisfy secrecy, value, and confidentiality requirements at the same time. Where customer names, addresses, contact information, and the like can be obtained through public channels, they generally cannot, as a matter of course, constitute trade secrets. Even where some customers overlapped, the defendants also submitted evidence proving that the products traded were different, or that the customers had independently chosen their trading counterparties, which was insufficient to establish that they had used Sui’s business secrets. Zhang and Zheng had completed work handover upon departure and could no longer log in to the internal system; the existing evidence was insufficient to prove that they used or disclosed trade secrets after leaving employment. A supplier’s adjustment of dealer cooperation relationships also falls within the scope of independent business operations and, absent evidence proving that the supplier instigated or assisted infringement, does not constitute trade secret infringement.
This case has important normative significance for the common practical disputes involving “departing employees taking customers.” Commercial relationships formed through long-term transactions between an enterprise and customers may certainly have commercial value, but not all customer information is protected by trade secret law. What may truly constitute business secrets is usually in-depth information accumulated through long-term transactions, such as customers’ special requirements, purchasing habits, transaction prices, credit status, decision-making chains, service preferences, and non-public business plans. A customer list alone, or the mere existence of a stable cooperative relationship between the parties, is insufficient to exclude customers’ right freely to choose their trading counterparties.
This case also clarifies the relationship between non-compete restrictions and trade secret infringement. An employee’s breach of a non-compete obligation may give rise to liability under a labor contract or non-compete arrangement, but it does not necessarily constitute trade secret infringement. Trade secret infringement must still be proved by reference to such elements as whether secret information is established, whether the defendant had access to it, whether it was used or disclosed, and whether substantial identity exists. This case reflects the court’s balance between protection of right holders and free market competition, and also reminds enterprises that trade secret litigation cannot be used as a substitute for management of ordinary market competition risks.
V. The Case Concerning Premature Publication of Game Trial Videos: Non-Public Game Content May Constitute Business Secrets The fifth case involved non-public version content of the well-known online game “a certain deity.” The plaintiff, Mi You Company, developed and operated the game. The defendant, Wu, was a game information blogger on a certain platform. He published five trial-play videos through the platform, in which scenes, plot settings, and other content appearing in the videos had not yet been made public. The plaintiff asserted that new-version game content was not known to the public before the update, that confidentiality measures had been taken, and that it had relatively high commercial value and constituted trade secrets; the defendant had illegally obtained and disclosed it and should bear liability.
The court held that information such as newly added scenes and plot settings in “a certain deity” was a core resource in the course of game operation, could bring the right holder competitive advantages, had commercial value, was not known to the public when the infringing acts occurred, and had been subject to necessary and reasonable confidentiality measures; it therefore constituted trade secrets. Wu, as a game information blogger who obtained income by undertaking commercial orders, was an operator within the meaning of the Anti-Unfair Competition Law. He obtained an installation package for a non-public version from a social group that shared leaked materials, installed and ran it according to instructions, and recorded and published videos. Taking into account that the manner in which the videos were produced was obviously different from the ordinary process of downloading and running a game, the court presumed that he knew or should have known that the relevant content was a trade secret obtained by others through improper means, yet still obtained and disclosed it, constituting infringement. The court ordered him to publish a statement, eliminate the effects, and compensate RMB 100,000.
The important significance of this case lies in bringing scenes, plots, images, and other operational content before a game update within the scope of trade secret protection. The commercial value of an online game exists not only in the code, engine, and art assets themselves, but also in the version rhythm, content suspense, player expectations, and operational strategy. Premature disclosure of non-public version content may not only weaken the game company’s publicity arrangements and commercial conversion effects, but may also disrupt player experience and market order.
From the perspective of adjudicatory logic, the court’s findings concerning “operator” status and “knew or should have known” are particularly instructive. Where an individual blogger participates in market competition through account operation, commercial promotion, commercial-order cooperation, and similar means, he or she may be brought within the regulatory scope of the Anti-Unfair Competition Law. For a game version whose source is obviously abnormal, whose installation path is plainly non-ordinary, and whose content is clearly non-public, an actor cannot deny subjective fault on the grounds that he or she was “only reposting” or “only trying it out.” This case has exemplary significance for combating such acts in the game industry as “package leaks,” “early access leaks,” and “spoiler-style marketing.”
VI. The Case Concerning “Spoilers” of Non-Public Game Characters: Pre-Litigation Conduct Preservation Strengthens Immediate Protection The sixth case likewise arose in the game industry. The plaintiff, Mi You Company, was the operator of the game “a certain collapse” and had obtained the corresponding authorization to enforce rights. The game launches new characters, scenes, plots, activities, and other content through periodic version updates, in order to maintain attention and product vitality. The relevant content is subject to closed beta testing before official launch. The defendant, Chen, as a closed-beta player, entered into a confidentiality agreement with the company, but during the testing period he secretly photographed and recorded, without authorization, the in-game appearances, skill effects, skill data, and other content of seven game characters, and disclosed them multiple times to third parties.
After discovering this, Mi You first applied to the court for pre-litigation conduct preservation. Upon review, the court held that failure to take timely measures could cause irreparable damage to the right holder, and that the preservation measures would not result in a significant imbalance of interests between the parties. Within 48 hours after receiving the application, the court issued a ruling ordering Chen not to disclose, use, or allow others to use the game content that he had secretly recorded during testing. In the subsequent substantive trial, the court found that the in-game appearances, skill effects, skill data, and other content of the game characters at issue met the characteristics of business information and the constituent requirements for trade secrets. Chen breached his confidentiality obligations by secretly photographing, recording, and disseminating the content, and should bear liability. Even if the game characters were later made public as a result of version updates, Chen still could not disclose the test footage in his possession. The court ordered him to cease infringement, eliminate the effects, and compensate RMB 500,000.
This case echoes the fifth case, but more prominently highlights the unique value of pre-litigation conduct preservation in trade secret cases. The core risk in trade secret cases lies in the fact that “once disclosed, the secret status is difficult to restore.” For the game industry, once non-public characters, skill data, and dynamic images are disseminated on online platforms, they may spread rapidly, causing irreversible operational damage. Therefore, the court’s issuance of a conduct preservation ruling within 48 hours demonstrates an accurate grasp of the speed of online dissemination and the irreversible nature of damage to trade secrets.
This case also emphasizes that the object of trade secret protection is not merely the art image of a single character, but rather the operational resources and competitive advantages jointly composed of in-game appearances, skill effects, skill data, and the rhythm of version updates. After a game is officially updated, the relevant content may enter the public domain, but this does not mean that the illegal recording and dissemination during the testing period can be “laundered” after the fact. The information status, confidentiality obligations, and competitive value at the time of the infringing act remain important bases for determining liability.
VII. The Case Concerning Submission of Evidence in a Labor Dispute: Trade Secret Protection Must Not Improperly Restrict Employees’ Litigation Rights The seventh case involved whether submission of company documents in a labor dispute procedure constituted infringement of business secrets. The defendant, Chen, was formerly the head of the digital-intelligence business department of Si Company. Around the time of his departure, a labor arbitration and labor dispute litigation arose between him and Si. In those proceedings, he submitted certain company documents as evidence and also obtained, through evidence exchange, certain documents submitted by Si. Later, an employee not party to the case submitted some related documents in another labor dispute. Si asserted that the foregoing documents constituted trade secrets, alleged that Chen illegally obtained and disclosed them, and sought cessation of infringement and damages of RMB 1 million.
The court dismissed Si’s claims. The court held that the primary value of the documents at issue lay in the company’s internal management, rather than in bringing direct and positive competitive advantages to the company; they therefore lacked the value required of business secrets and did not constitute business secrets protected by the Anti-Unfair Competition Law. Chen had learned of and possessed some of the documents in the ordinary course of his work, and obtained some documents lawfully in the judicial procedure of the labor dispute; no illegal acquisition existed. His submission of documents to the arbitration authority and the court was performance of his statutory burden of proof, and did not result in improper expansion of the scope of persons aware of the relevant information. The existing evidence was also insufficient to prove that Chen disclosed company documents to other employees.
The significance of this case lies in drawing the boundary between enterprise trade secret protection and employees’ litigation rights. Enterprise internal documents do not necessarily have the attributes of trade secrets. Although certain institutional documents, management documents, and process materials may be internal, if they cannot confer competitive advantages or do not possess value in the sense required for trade secrets, they cannot be recognized as business secrets merely because “the company is unwilling to make them public.”
At the same time, employees enjoy the right lawfully to adduce evidence and protect their own rights and interests in labor disputes. If, for litigation purposes, an employee submits materials related to the dispute to a statutory authority in arbitration or judicial proceedings, and does not exceed the necessary scope or cause improper dissemination, such conduct should not, in principle, readily be found to constitute trade secret infringement. This case helps prevent enterprises from improperly suppressing employees’ rights protection in the name of trade secrets, and also encourages enterprises, in labor disputes that genuinely involve trade secrets, to achieve balanced protection through procedural mechanisms such as applications for non-public hearings, evidence confidentiality orders, and restrictions on review and reproduction of case materials.
VIII. The Criminal Case Concerning Collusion Between Insiders and Outsiders to Infringe Trade Secrets: Organized Enforcement Against Crimes Involving High-End Chip Technology The eighth case was a criminal case concerning infringement of trade secrets involving radio-frequency chip technology. The defendant, Zhang, was formerly the head of the radio-frequency chip development department of Hai Company, and after leaving employment he established Zun Company. Before and after the establishment of that company, Zhang induced employees of Hai to join Zun, and they jointly decided to develop chips of the same type as those of Hai. In order to shorten the R&D cycle, quickly complete tape-out and mass production, and attract financing, Zhang instructed relevant personnel to continue recruiting employees of Hai. Although many defendants knew that Hai had adopted confidentiality measures, before and after leaving employment they nevertheless, either on their own or in collusion with internal employees, obtained technical information by browsing, downloading, excerpting, taking screenshots, and other means, and used it for chip R&D by Zun. After Zhang learned that Hai intended to file an infringement lawsuit, he also instructed others to delete server data, replace or destroy hard drives, and arrange for employees to sign so-called “undertakings,” in order to conceal the illegality of the technical source.
The court held that Zhang and others, knowing that Hai had adopted strict confidentiality measures for its trade secrets, nevertheless induced internal employees through high salaries and benefits to illegally provide trade secrets; they formed a group to obtain the right holder’s trade secrets through improper means, and the circumstances were especially serious, constituting the crime of infringement of trade secrets. In the case, the investigating authority commissioned an appraisal institution to appraise the discounted value of the reasonable license fee for the technical information at issue at more than RMB 317 million. The court held that the appraisal was reasonable and could be used to determine the amount of loss. Ultimately, the court convicted 14 defendants of the crime of infringement of trade secrets and sentenced them to fixed-term imprisonment ranging from six years to one year, together with fines ranging from RMB 3 million to RMB 200,000.
This case reflects the intensity and precision of criminal protection of trade secrets in the field of high-end chips. Unlike ordinary disclosure of secrets by an individual employee, this case displayed obvious organized, chain-based, and industrialized characteristics: core personnel left employment to start a business, recruited technical personnel from the original employer, colluded internally and externally to obtain secrets, used the secrets to advance R&D of similar products, and, after a dispute arose, destroyed evidence and fabricated an appearance of compliance. Such conduct directly erodes the original enterprise’s long-term R&D investment and industrial competitive advantages; if not severely punished, it will cause major harm to the ecosystem of scientific and technological innovation.
This case also involves the application of reasonable license fees in determining losses in criminal cases. Losses from trade secrets are often difficult to measure directly through actual sales profits or a decline in market share, especially where chip technology has not been fully commercialized or infringing use remains at the R&D stage. Appraising the value of trade secrets by using a reasonable license fee can better reflect the R&D costs saved and the technological opportunities obtained by the infringer through illegal acquisition of the technology. Of course, this method also requires the appraisal process to be scientific, explainable, and supported by evidence.
IX. The Criminal Case Concerning Artificial Intelligence Chip Trade Secrets: Criminal Application of the Cost Method to Assess a Notional License Fee The ninth case was the first criminal case nationwide involving infringement of trade secrets in the field of artificial intelligence chips. The two injured enterprises jointly engaged in R&D and sales of artificial intelligence chips and had completed the chip project at issue. The two items of technical information at issue belonged to self-developed modules of the chip project and were key technologies for realizing chip functions; before the case arose, they were not known to the public, and the companies had also adopted corresponding confidentiality measures. The defendant, Guo, was formerly a founder of the injured enterprises, had signed a confidentiality agreement, and was responsible for project R&D. In order to increase his bargaining leverage in negotiations with the company and facilitate his continued use of the relevant data after departure, he, without authorization, copied and transmitted a large amount of confidential data, including the technical information at issue, to his local computer and uploaded it to his personal cloud drive.
The court found that this case involved the crime of infringement of trade secrets through illegal acquisition and possession. The amount of loss suffered by the right holder may be determined on the basis of a reasonable license fee for the trade secrets. Trade secret appraisal may adopt the cost method, income method, or market method. Because the chip products at issue had been sold for only a short period of time and in small quantities, and the sales data did not satisfy the conditions for applying the income method or market method, while the injured enterprises were able to provide standardized and complete vouchers for R&D expenditures, the cost method was adopted for the appraisal. During the appraisal process, irrelevant expenses were also excluded, and findings favorable to the defendant were made. The court ultimately determined the amount of loss to be RMB 2.31 million, and sentenced Guo, for the crime of infringement of trade secrets, to fixed-term imprisonment of two years, suspended for two years, and a fine of RMB 100,000.
This case has typical significance in two respects. First, it further confirms that “illegal acquisition and possession-type” conduct may likewise constitute the crime of infringement of trade secrets in the criminal field. Even if the defendant has not yet fully put the technology at issue into production or business operation, so long as he obtains trade secrets by theft or other improper means and reaches the criminal prosecution threshold, he should bear criminal liability. In the field of artificial intelligence chips, the R&D cycle is long, investment is high, and trial-and-error costs are substantial; once core module technology is copied and transferred to a personal cloud drive, the risks of leakage and reuse are significantly increased.
Second, this case provides a refined explanation of methods for appraising the amount of loss. For start-up technology enterprises, products are often still in the early stage of commercialization, and the income method and market method often lack stable data support. Assessing a notional license fee on the basis of R&D costs helps reflect the actual investment in the formation of trade secrets and, provided the evidence is sufficient and the exclusion of expenses is reasonable, realize proportionality between crime, responsibility, and punishment. This case also facilitated a package agreement between the injured enterprises and the defendant to resolve equity disputes, demonstrating that criminal justice is not only about punishing crimes, but may also promote the restoration of business order for innovative entities through procedural mechanisms.
X. The Case Concerning Spying Upon and Illegally Providing Trade Secrets for Overseas Parties in the New Energy Vehicle Sector: Connecting Trade Secret Protection with Industrial Security The tenth case involved the crime of spying upon and illegally providing trade secrets for overseas parties in the field of new energy vehicles. Hua Company engaged in R&D, production, and sales of automobile components and intelligent systems. The defendant, Zhang, had worked at Hua, signed a confidentiality undertaking, and received confidentiality training. After leaving employment, Zhang probed employees of Hua for information such as personnel migration arrangements for the intelligent-selection vehicle team, and, upon arrangements by relevant companies, provided paid consulting services to a company registered in Hong Kong. He illegally provided to overseas organizations and persons the internal code names, market positioning, configurations, pricing, and other information of vehicle models to be launched, which he had learned in the course of his work, as well as information on team migration arrangements that he had obtained by probing others, and made illegal gains of more than RMB 1,700.
The court held that business information such as the internal code names, market positioning, configurations, pricing, and personnel migration arrangements for the three vehicle models to be launched constituted trade secrets of Hua. Zhang knew that the consulting principal might be an overseas organization, yet allowed that result to occur and accepted the consulting engagement; by spying upon and illegally providing trade secrets for an overseas organization, he constituted the crime of spying upon and illegally providing trade secrets for overseas parties. Considering such circumstances as his truthful confession, admission of guilt and acceptance of punishment, and disgorgement of illegal gains, the court sentenced him to fixed-term imprisonment of one year and six months and imposed a fine of RMB 8,730. At the same time, because he had committed a specific-obligation offense in breach of occupational requirements, the court, comprehensively considering the actual circumstances of his possession of trade secrets and the need to prevent recidivism, prohibited him from engaging in occupations related to new energy vehicles for three years from the date of completion of his sentence or parole.
This case highlights the connection between trade secret protection and national industrial security and enterprises’ global competitiveness. Competition in the new energy vehicle industry is reflected not only in hardware manufacturing and software algorithms, but also in business information such as the rhythm of vehicle-model launches, market positioning, pricing strategies, configuration plans, and team organization arrangements. If information on vehicle models to be launched flows prematurely to overseas competitors, it may affect the enterprise’s market strategy, supply-chain negotiations, capital-market expectations, and even global layout.
The most notable aspect of this case is the application of the occupational prohibition system. The court not only imposed an actual custodial sentence on the defendant, but also applied occupational prohibition for the first time under this offense, indicating that, for persons who have particular occupational backgrounds, possess sensitive trade secrets, and breach duties of occupational trust, criminal liability should not be limited to deprivation of liberty and property penalties, but should also reduce the risk of recidivism through occupational restrictions. This rule has important warning significance for industries that are highly dependent on talent mobility and technological accumulation, such as new energy vehicles, artificial intelligence, semiconductors, and biomedicine.
Comment The ten typical cases on trade secret protection released by Shanghai courts present, in a concentrated manner, the trend of China’s judicial protection of trade secrets evolving from traditional individual-case remedies toward systematic, refined, and industrialized protection. In civil cases, the courts emphasize strict proof of the constituent elements of trade secrets, while also responding to new types of conduct such as possession-type infringement, passive use, disclosure of game content, and “spoilers” during the testing stage. In criminal cases, the courts punish in accordance with law such conduct as insider-outsider collusion to steal chip technology, illegal copying of artificial intelligence chip data, and spying upon and providing new energy vehicle business secrets for overseas parties, and have developed adjudicatory rules that may serve as references in such respects as loss determination, layering of liability, and occupational prohibition.
These cases also provide clear directions for enterprises’ trade secret compliance construction. Enterprises should shift from “ex post rights enforcement” to “full-process protection,” and establish complete mechanisms in such areas as R&D project initiation, technical archiving, document classification, access control, employee onboarding and departure management, confidentiality agreements with partners, closed-beta management, audits of outbound data transmission, non-compete arrangements, and confidentiality of litigation evidence. Particularly in high-tech enterprises, trade secret protection should not remain merely at the level of signing confidentiality agreements, but should be implemented through carrier management, access logs, confidentiality-level markings, personnel training, and early warning of abnormal conduct.
From the judicial perspective, the key to trade secret protection is not the indiscriminate expansion of rights boundaries, but the achievement of a balance among protecting innovative achievements, maintaining fair competition, safeguarding reasonable talent mobility, and respecting litigation rights. The signal released by the Shanghai courts through these typical cases is clear: for trade secrets that truly carry enterprises’ innovation investment and competitive advantages, the judiciary will provide strong, timely, and multi-dimensional protection; for claims that lack secrecy, value, confidentiality, or sufficient evidentiary support, the courts will not break through statutory requirements to grant protection. It is precisely through such a strict yet forceful, prudent yet proactive adjudicatory stance that the trade secret system can truly serve innovation-driven development and the construction of a high-level law-based business environment.
On April 23, 2026, the Shanghai High People’s Court announced and released typical cases of Shanghai courts concerning trade secret protection, presenting in a concentrated manner the judicial protection achievements of Shanghai courts in recent years in such areas as civil and criminal trade secret cases and pre-litigation conduct preservation. The ten cases released this time cover technical secrets and business secrets, involving multiple key industrial sectors, including communications, semiconductors, medical devices, chemical trading, online games, artificial intelligence chips, and new energy vehicles. They include not only traditional disputes such as disclosure of secrets by departing employees and disputes over customer information, but also new types of disputes and disputes arising in new business formats, such as premature disclosure of game-version content, illegal reproduction of artificial intelligence chip technology, and spying upon and providing trade secrets for overseas parties.
This article analyzes these cases one by one and summarizes their judicial rules and practical implications.
I. The Infrared Remote-Control Technical Secret Case: A Claim for Protection of Technical Secrets Must Be Supported by Clearly Defined Content and Carriers The first case was a dispute over infringement of infrared remote-control technical secrets among an information technology company, a terminal company, a technology company, and a certain company. The plaintiff asserted that it had launched relevant smart products as early as 2012 and had accumulated technical experience in infrared remote control. Thereafter, it cooperated and conducted joint debugging with the defendants regarding the infrared-control function of mobile phones, and entered into confidentiality agreements. The plaintiff alleged that the defendants, under the guise of commercial cooperation, obtained its infrared remote-control technical secrets and applied the relevant technology to chips and mobile phone products, and therefore requested cessation of infringement and damages of more than RMB 100 million.
The court ultimately did not support the plaintiff’s claims. The core reason was that the technical information claimed by the plaintiff did not satisfy the statutory requirements for trade secrets, and some of the so-called “secret points” lacked support from any carrier. Even assuming that the relevant technical secrets were established, the plaintiff also failed to prove that the defendants had access to the technical secrets at issue, and failed to prove that the alleged infringing information and the secret information it claimed were substantially identical. Accordingly, the court of first instance dismissed all claims, and the court of second instance affirmed the original judgment.
The key point in the trial of this case lies in the preliminary and stringent examination of the “establishment of technical secrets.” Trade secrets are not established merely by a unilateral assertion of the right holder, and this is particularly true of technical secrets. Because technical information is intangible, complex, and divisible, the right holder must clearly identify the specific technical content for which protection is claimed and provide carriers capable of embodying such technical content, such as documents, drawings, code, experimental records, and technical solutions. The court must not only examine whether the relevant information is secret, valuable, and subject to confidentiality measures, but must also further determine the time when the carrier was formed, whether the carrier can reflect the technical content alleged by the right holder, and whether the carrier is original or credible.The significance of this case is that it sends a clear rule signal to market participants: protection of technical secrets is not protection of abstract R&D experience, cooperation processes, or general technical capabilities; rather, it is protection of specific, definite, identifiable information that is controlled by confidentiality measures and has commercial value. When asserting rights in technical secrets, enterprises should, in the ordinary course of business, complete the archiving of technical materials, version management, access control, and fixation of secret points. Otherwise, even where a commercial cooperation relationship and confidentiality agreement exist, it may still be impossible to prove in litigation the establishment of trade secrets and the facts of infringement.
II. The “Possession-Type” Technical Secret Case Concerning Crystal-Growing Furnace Drawings: Illegal Possession of Trade Secrets May Also Constitute Infringement The second case involved technical secrets in drawings of semiconductor crystal-growing furnaces. The plaintiff, a semiconductor company, asserted that the defendant, Fu, as a senior manager and member of the confidentiality team during his employment with the company, had access to design and process R&D information concerning crystal growth systems. During his employment, he used a USB flash drive to copy crystal-growing furnace drawings and repeatedly sent emails involving technical secrets from the company email account to his personal email account. After his departure, Fu was subjected to criminal liability for other criminal offenses. The plaintiff therefore filed a civil action for infringement of technical secrets, seeking cessation of infringement and damages of RMB 5 million.
The court held that Fu’s transfer of the company’s technical secrets to his personal laptop lacked any lawful basis and constituted acquisition of technical secrets by improper means. Although there was no evidence in the case proving that he further disclosed, used, or allowed others to use the technical secrets, the illegal transfer and possession themselves had already created potential risks for the right holder and could compel the enterprise to increase prevention costs. Accordingly, the court ordered Fu not to disclose, use, or allow others to use the technical secrets at issue, and to compensate economic losses and reasonable rights-enforcement expenses in the amount of RMB 100,000. The judgment was affirmed on appeal.
The key value of this case lies in confirming the boundaries of liability for “possession-type” infringement of technical secrets. In traditional trade secret cases, the right holder often must prove that the infringer disclosed, used, or allowed others to use the secret information. However, in high-tech fields, once trade secrets are illegally copied and transferred to personal devices, even if no actual utilization has yet occurred, the right holder is placed in a state of high uncertainty and risk. This is especially so for information such as semiconductor drawings, process parameters, and R&D materials; once leaked, the damage may be difficult to reverse.
The court did not completely deny the existence of damage on the ground that evidence of actual use was absent; instead, it determined damages in its discretion from the perspectives of potential harm and prevention costs, reflecting the idea that trade secret protection extends from “ex post compensation for damage” to “risk prevention and control.” For enterprises, this case indicates that particular attention should be paid to departure handover, device audits, email traceability, control over external storage media, and management of senior-management access permissions, so as to reduce the risk that “the secret remains, but the carrier has gone out of control.”
III. The Case Concerning “Passive Use” of Technical Information Relating to Medical Devices: Reference to Another’s Technical Secrets May Also Confer an Improper Competitive Advantage The third case was a technical secret dispute among Hangzhou Qi, a medical device company, Shanghai Yu Medical Company, Shanghai Xin Medical Company, and an individual, Wu. Wu had formerly worked at Qi and was subject to confidentiality obligations. Later, when arranged by Yu to conduct project-establishment research for a medical device project, he provided to members of the project team, for their reference, medical device technical information that he had privately retained from his former employer. Yu and its affiliated company subsequently applied for patents in the same field, but upon comparison, the relevant patents and the technical secrets at issue were materially different in terms of technical route, structure, function, and effect. Qi alleged that the defendants induced theft and used technical secrets for R&D and production, and claimed more than RMB 86 million in damages.
The court found that the technical information at issue claimed by Qi constituted technical secrets. Wu, in breach of his confidentiality obligations, retained without authorization and provided the relevant technical information to Yu, which constituted infringement. Although Yu did not directly copy the technical secrets into the final R&D results, and the relevant patents were not substantially identical to the secrets at issue, its reference to the technical secrets during project-establishment research could provide R&D personnel with guidance and ideas, reduce research time and R&D costs, and thereby obtain a competitive advantage. Therefore, the court held that such “reference” also constituted an act of using technical secrets in production and business operations, and ordered Wu and Yu to delete the technical documents at issue and jointly compensate RMB 600,000.
The highlight of the judgment in this case lies in its expansive but bounded interpretation of the meaning of “use of trade secrets.” The value of trade secrets is not reflected only in complete copying, direct production, or formation of the same technical solution; it may also be reflected in helping competitors avoid trial and error, shorten the R&D cycle, clarify the technical direction, and eliminate ineffective paths. In other words, trade secrets may be “actively used” or “passively used.” Although the latter may not necessarily leave, in the final results, any technical expression identical to the secret information, it may still be substantively transformed into a competitive advantage.
At the same time, the court did not, as a matter of course, presume all subsequent R&D results to be infringing results. As to those parts for which there was no substantial connection between the accused patents and the technical secrets at issue, the court did not support the right holder’s allegations of higher-degree infringement, such as use in improvements or product manufacturing. This adjudicatory approach takes into account both trade secret protection and the space for independent R&D: it prevents competitors from evading liability by asserting that they “looked at it but did not copy it,” while also avoiding undue restrictions on others’ independent R&D merely because the right holder shows prior access.
IV. The Case Concerning Customer and Supplier Information of Departing Employees: Customer Relationships Do Not Necessarily Constitute Business Secrets The fourth case arose in the field of chemical product purchase and sale. The plaintiff, Sui Company, asserted that its customer materials, sales strategies, supplier information, and other information constituted business secrets. The defendants, Zhang and Zheng, had been employees of Sui, and later established or controlled several companies engaged in the same type of chemical product business. Sui alleged that the two defendants breached their confidentiality and non-compete obligations and disclosed and used its trade secrets; it further alleged that the relevant companies and supplier Tian Company committed joint infringement, and therefore sought cessation of infringement and damages of more than RMB 22 million.
The court did not support Sui’s claims. The court held that customer information constituting trade secrets must satisfy secrecy, value, and confidentiality requirements at the same time. Where customer names, addresses, contact information, and the like can be obtained through public channels, they generally cannot, as a matter of course, constitute trade secrets. Even where some customers overlapped, the defendants also submitted evidence proving that the products traded were different, or that the customers had independently chosen their trading counterparties, which was insufficient to establish that they had used Sui’s business secrets. Zhang and Zheng had completed work handover upon departure and could no longer log in to the internal system; the existing evidence was insufficient to prove that they used or disclosed trade secrets after leaving employment. A supplier’s adjustment of dealer cooperation relationships also falls within the scope of independent business operations and, absent evidence proving that the supplier instigated or assisted infringement, does not constitute trade secret infringement.
This case has important normative significance for the common practical disputes involving “departing employees taking customers.” Commercial relationships formed through long-term transactions between an enterprise and customers may certainly have commercial value, but not all customer information is protected by trade secret law. What may truly constitute business secrets is usually in-depth information accumulated through long-term transactions, such as customers’ special requirements, purchasing habits, transaction prices, credit status, decision-making chains, service preferences, and non-public business plans. A customer list alone, or the mere existence of a stable cooperative relationship between the parties, is insufficient to exclude customers’ right freely to choose their trading counterparties.
This case also clarifies the relationship between non-compete restrictions and trade secret infringement. An employee’s breach of a non-compete obligation may give rise to liability under a labor contract or non-compete arrangement, but it does not necessarily constitute trade secret infringement. Trade secret infringement must still be proved by reference to such elements as whether secret information is established, whether the defendant had access to it, whether it was used or disclosed, and whether substantial identity exists. This case reflects the court’s balance between protection of right holders and free market competition, and also reminds enterprises that trade secret litigation cannot be used as a substitute for management of ordinary market competition risks.
V. The Case Concerning Premature Publication of Game Trial Videos: Non-Public Game Content May Constitute Business Secrets The fifth case involved non-public version content of the well-known online game “a certain deity.” The plaintiff, Mi You Company, developed and operated the game. The defendant, Wu, was a game information blogger on a certain platform. He published five trial-play videos through the platform, in which scenes, plot settings, and other content appearing in the videos had not yet been made public. The plaintiff asserted that new-version game content was not known to the public before the update, that confidentiality measures had been taken, and that it had relatively high commercial value and constituted trade secrets; the defendant had illegally obtained and disclosed it and should bear liability.
The court held that information such as newly added scenes and plot settings in “a certain deity” was a core resource in the course of game operation, could bring the right holder competitive advantages, had commercial value, was not known to the public when the infringing acts occurred, and had been subject to necessary and reasonable confidentiality measures; it therefore constituted trade secrets. Wu, as a game information blogger who obtained income by undertaking commercial orders, was an operator within the meaning of the Anti-Unfair Competition Law. He obtained an installation package for a non-public version from a social group that shared leaked materials, installed and ran it according to instructions, and recorded and published videos. Taking into account that the manner in which the videos were produced was obviously different from the ordinary process of downloading and running a game, the court presumed that he knew or should have known that the relevant content was a trade secret obtained by others through improper means, yet still obtained and disclosed it, constituting infringement. The court ordered him to publish a statement, eliminate the effects, and compensate RMB 100,000.
The important significance of this case lies in bringing scenes, plots, images, and other operational content before a game update within the scope of trade secret protection. The commercial value of an online game exists not only in the code, engine, and art assets themselves, but also in the version rhythm, content suspense, player expectations, and operational strategy. Premature disclosure of non-public version content may not only weaken the game company’s publicity arrangements and commercial conversion effects, but may also disrupt player experience and market order.
From the perspective of adjudicatory logic, the court’s findings concerning “operator” status and “knew or should have known” are particularly instructive. Where an individual blogger participates in market competition through account operation, commercial promotion, commercial-order cooperation, and similar means, he or she may be brought within the regulatory scope of the Anti-Unfair Competition Law. For a game version whose source is obviously abnormal, whose installation path is plainly non-ordinary, and whose content is clearly non-public, an actor cannot deny subjective fault on the grounds that he or she was “only reposting” or “only trying it out.” This case has exemplary significance for combating such acts in the game industry as “package leaks,” “early access leaks,” and “spoiler-style marketing.”
VI. The Case Concerning “Spoilers” of Non-Public Game Characters: Pre-Litigation Conduct Preservation Strengthens Immediate Protection The sixth case likewise arose in the game industry. The plaintiff, Mi You Company, was the operator of the game “a certain collapse” and had obtained the corresponding authorization to enforce rights. The game launches new characters, scenes, plots, activities, and other content through periodic version updates, in order to maintain attention and product vitality. The relevant content is subject to closed beta testing before official launch. The defendant, Chen, as a closed-beta player, entered into a confidentiality agreement with the company, but during the testing period he secretly photographed and recorded, without authorization, the in-game appearances, skill effects, skill data, and other content of seven game characters, and disclosed them multiple times to third parties.
After discovering this, Mi You first applied to the court for pre-litigation conduct preservation. Upon review, the court held that failure to take timely measures could cause irreparable damage to the right holder, and that the preservation measures would not result in a significant imbalance of interests between the parties. Within 48 hours after receiving the application, the court issued a ruling ordering Chen not to disclose, use, or allow others to use the game content that he had secretly recorded during testing. In the subsequent substantive trial, the court found that the in-game appearances, skill effects, skill data, and other content of the game characters at issue met the characteristics of business information and the constituent requirements for trade secrets. Chen breached his confidentiality obligations by secretly photographing, recording, and disseminating the content, and should bear liability. Even if the game characters were later made public as a result of version updates, Chen still could not disclose the test footage in his possession. The court ordered him to cease infringement, eliminate the effects, and compensate RMB 500,000.
This case echoes the fifth case, but more prominently highlights the unique value of pre-litigation conduct preservation in trade secret cases. The core risk in trade secret cases lies in the fact that “once disclosed, the secret status is difficult to restore.” For the game industry, once non-public characters, skill data, and dynamic images are disseminated on online platforms, they may spread rapidly, causing irreversible operational damage. Therefore, the court’s issuance of a conduct preservation ruling within 48 hours demonstrates an accurate grasp of the speed of online dissemination and the irreversible nature of damage to trade secrets.
This case also emphasizes that the object of trade secret protection is not merely the art image of a single character, but rather the operational resources and competitive advantages jointly composed of in-game appearances, skill effects, skill data, and the rhythm of version updates. After a game is officially updated, the relevant content may enter the public domain, but this does not mean that the illegal recording and dissemination during the testing period can be “laundered” after the fact. The information status, confidentiality obligations, and competitive value at the time of the infringing act remain important bases for determining liability.
VII. The Case Concerning Submission of Evidence in a Labor Dispute: Trade Secret Protection Must Not Improperly Restrict Employees’ Litigation Rights The seventh case involved whether submission of company documents in a labor dispute procedure constituted infringement of business secrets. The defendant, Chen, was formerly the head of the digital-intelligence business department of Si Company. Around the time of his departure, a labor arbitration and labor dispute litigation arose between him and Si. In those proceedings, he submitted certain company documents as evidence and also obtained, through evidence exchange, certain documents submitted by Si. Later, an employee not party to the case submitted some related documents in another labor dispute. Si asserted that the foregoing documents constituted trade secrets, alleged that Chen illegally obtained and disclosed them, and sought cessation of infringement and damages of RMB 1 million.
The court dismissed Si’s claims. The court held that the primary value of the documents at issue lay in the company’s internal management, rather than in bringing direct and positive competitive advantages to the company; they therefore lacked the value required of business secrets and did not constitute business secrets protected by the Anti-Unfair Competition Law. Chen had learned of and possessed some of the documents in the ordinary course of his work, and obtained some documents lawfully in the judicial procedure of the labor dispute; no illegal acquisition existed. His submission of documents to the arbitration authority and the court was performance of his statutory burden of proof, and did not result in improper expansion of the scope of persons aware of the relevant information. The existing evidence was also insufficient to prove that Chen disclosed company documents to other employees.
The significance of this case lies in drawing the boundary between enterprise trade secret protection and employees’ litigation rights. Enterprise internal documents do not necessarily have the attributes of trade secrets. Although certain institutional documents, management documents, and process materials may be internal, if they cannot confer competitive advantages or do not possess value in the sense required for trade secrets, they cannot be recognized as business secrets merely because “the company is unwilling to make them public.”
At the same time, employees enjoy the right lawfully to adduce evidence and protect their own rights and interests in labor disputes. If, for litigation purposes, an employee submits materials related to the dispute to a statutory authority in arbitration or judicial proceedings, and does not exceed the necessary scope or cause improper dissemination, such conduct should not, in principle, readily be found to constitute trade secret infringement. This case helps prevent enterprises from improperly suppressing employees’ rights protection in the name of trade secrets, and also encourages enterprises, in labor disputes that genuinely involve trade secrets, to achieve balanced protection through procedural mechanisms such as applications for non-public hearings, evidence confidentiality orders, and restrictions on review and reproduction of case materials.
VIII. The Criminal Case Concerning Collusion Between Insiders and Outsiders to Infringe Trade Secrets: Organized Enforcement Against Crimes Involving High-End Chip Technology The eighth case was a criminal case concerning infringement of trade secrets involving radio-frequency chip technology. The defendant, Zhang, was formerly the head of the radio-frequency chip development department of Hai Company, and after leaving employment he established Zun Company. Before and after the establishment of that company, Zhang induced employees of Hai to join Zun, and they jointly decided to develop chips of the same type as those of Hai. In order to shorten the R&D cycle, quickly complete tape-out and mass production, and attract financing, Zhang instructed relevant personnel to continue recruiting employees of Hai. Although many defendants knew that Hai had adopted confidentiality measures, before and after leaving employment they nevertheless, either on their own or in collusion with internal employees, obtained technical information by browsing, downloading, excerpting, taking screenshots, and other means, and used it for chip R&D by Zun. After Zhang learned that Hai intended to file an infringement lawsuit, he also instructed others to delete server data, replace or destroy hard drives, and arrange for employees to sign so-called “undertakings,” in order to conceal the illegality of the technical source.
The court held that Zhang and others, knowing that Hai had adopted strict confidentiality measures for its trade secrets, nevertheless induced internal employees through high salaries and benefits to illegally provide trade secrets; they formed a group to obtain the right holder’s trade secrets through improper means, and the circumstances were especially serious, constituting the crime of infringement of trade secrets. In the case, the investigating authority commissioned an appraisal institution to appraise the discounted value of the reasonable license fee for the technical information at issue at more than RMB 317 million. The court held that the appraisal was reasonable and could be used to determine the amount of loss. Ultimately, the court convicted 14 defendants of the crime of infringement of trade secrets and sentenced them to fixed-term imprisonment ranging from six years to one year, together with fines ranging from RMB 3 million to RMB 200,000.
This case reflects the intensity and precision of criminal protection of trade secrets in the field of high-end chips. Unlike ordinary disclosure of secrets by an individual employee, this case displayed obvious organized, chain-based, and industrialized characteristics: core personnel left employment to start a business, recruited technical personnel from the original employer, colluded internally and externally to obtain secrets, used the secrets to advance R&D of similar products, and, after a dispute arose, destroyed evidence and fabricated an appearance of compliance. Such conduct directly erodes the original enterprise’s long-term R&D investment and industrial competitive advantages; if not severely punished, it will cause major harm to the ecosystem of scientific and technological innovation.
This case also involves the application of reasonable license fees in determining losses in criminal cases. Losses from trade secrets are often difficult to measure directly through actual sales profits or a decline in market share, especially where chip technology has not been fully commercialized or infringing use remains at the R&D stage. Appraising the value of trade secrets by using a reasonable license fee can better reflect the R&D costs saved and the technological opportunities obtained by the infringer through illegal acquisition of the technology. Of course, this method also requires the appraisal process to be scientific, explainable, and supported by evidence.
IX. The Criminal Case Concerning Artificial Intelligence Chip Trade Secrets: Criminal Application of the Cost Method to Assess a Notional License Fee The ninth case was the first criminal case nationwide involving infringement of trade secrets in the field of artificial intelligence chips. The two injured enterprises jointly engaged in R&D and sales of artificial intelligence chips and had completed the chip project at issue. The two items of technical information at issue belonged to self-developed modules of the chip project and were key technologies for realizing chip functions; before the case arose, they were not known to the public, and the companies had also adopted corresponding confidentiality measures. The defendant, Guo, was formerly a founder of the injured enterprises, had signed a confidentiality agreement, and was responsible for project R&D. In order to increase his bargaining leverage in negotiations with the company and facilitate his continued use of the relevant data after departure, he, without authorization, copied and transmitted a large amount of confidential data, including the technical information at issue, to his local computer and uploaded it to his personal cloud drive.
The court found that this case involved the crime of infringement of trade secrets through illegal acquisition and possession. The amount of loss suffered by the right holder may be determined on the basis of a reasonable license fee for the trade secrets. Trade secret appraisal may adopt the cost method, income method, or market method. Because the chip products at issue had been sold for only a short period of time and in small quantities, and the sales data did not satisfy the conditions for applying the income method or market method, while the injured enterprises were able to provide standardized and complete vouchers for R&D expenditures, the cost method was adopted for the appraisal. During the appraisal process, irrelevant expenses were also excluded, and findings favorable to the defendant were made. The court ultimately determined the amount of loss to be RMB 2.31 million, and sentenced Guo, for the crime of infringement of trade secrets, to fixed-term imprisonment of two years, suspended for two years, and a fine of RMB 100,000.
This case has typical significance in two respects. First, it further confirms that “illegal acquisition and possession-type” conduct may likewise constitute the crime of infringement of trade secrets in the criminal field. Even if the defendant has not yet fully put the technology at issue into production or business operation, so long as he obtains trade secrets by theft or other improper means and reaches the criminal prosecution threshold, he should bear criminal liability. In the field of artificial intelligence chips, the R&D cycle is long, investment is high, and trial-and-error costs are substantial; once core module technology is copied and transferred to a personal cloud drive, the risks of leakage and reuse are significantly increased.
Second, this case provides a refined explanation of methods for appraising the amount of loss. For start-up technology enterprises, products are often still in the early stage of commercialization, and the income method and market method often lack stable data support. Assessing a notional license fee on the basis of R&D costs helps reflect the actual investment in the formation of trade secrets and, provided the evidence is sufficient and the exclusion of expenses is reasonable, realize proportionality between crime, responsibility, and punishment. This case also facilitated a package agreement between the injured enterprises and the defendant to resolve equity disputes, demonstrating that criminal justice is not only about punishing crimes, but may also promote the restoration of business order for innovative entities through procedural mechanisms.
X. The Case Concerning Spying Upon and Illegally Providing Trade Secrets for Overseas Parties in the New Energy Vehicle Sector: Connecting Trade Secret Protection with Industrial Security The tenth case involved the crime of spying upon and illegally providing trade secrets for overseas parties in the field of new energy vehicles. Hua Company engaged in R&D, production, and sales of automobile components and intelligent systems. The defendant, Zhang, had worked at Hua, signed a confidentiality undertaking, and received confidentiality training. After leaving employment, Zhang probed employees of Hua for information such as personnel migration arrangements for the intelligent-selection vehicle team, and, upon arrangements by relevant companies, provided paid consulting services to a company registered in Hong Kong. He illegally provided to overseas organizations and persons the internal code names, market positioning, configurations, pricing, and other information of vehicle models to be launched, which he had learned in the course of his work, as well as information on team migration arrangements that he had obtained by probing others, and made illegal gains of more than RMB 1,700.
The court held that business information such as the internal code names, market positioning, configurations, pricing, and personnel migration arrangements for the three vehicle models to be launched constituted trade secrets of Hua. Zhang knew that the consulting principal might be an overseas organization, yet allowed that result to occur and accepted the consulting engagement; by spying upon and illegally providing trade secrets for an overseas organization, he constituted the crime of spying upon and illegally providing trade secrets for overseas parties. Considering such circumstances as his truthful confession, admission of guilt and acceptance of punishment, and disgorgement of illegal gains, the court sentenced him to fixed-term imprisonment of one year and six months and imposed a fine of RMB 8,730. At the same time, because he had committed a specific-obligation offense in breach of occupational requirements, the court, comprehensively considering the actual circumstances of his possession of trade secrets and the need to prevent recidivism, prohibited him from engaging in occupations related to new energy vehicles for three years from the date of completion of his sentence or parole.
This case highlights the connection between trade secret protection and national industrial security and enterprises’ global competitiveness. Competition in the new energy vehicle industry is reflected not only in hardware manufacturing and software algorithms, but also in business information such as the rhythm of vehicle-model launches, market positioning, pricing strategies, configuration plans, and team organization arrangements. If information on vehicle models to be launched flows prematurely to overseas competitors, it may affect the enterprise’s market strategy, supply-chain negotiations, capital-market expectations, and even global layout.
The most notable aspect of this case is the application of the occupational prohibition system. The court not only imposed an actual custodial sentence on the defendant, but also applied occupational prohibition for the first time under this offense, indicating that, for persons who have particular occupational backgrounds, possess sensitive trade secrets, and breach duties of occupational trust, criminal liability should not be limited to deprivation of liberty and property penalties, but should also reduce the risk of recidivism through occupational restrictions. This rule has important warning significance for industries that are highly dependent on talent mobility and technological accumulation, such as new energy vehicles, artificial intelligence, semiconductors, and biomedicine.
Comment The ten typical cases on trade secret protection released by Shanghai courts present, in a concentrated manner, the trend of China’s judicial protection of trade secrets evolving from traditional individual-case remedies toward systematic, refined, and industrialized protection. In civil cases, the courts emphasize strict proof of the constituent elements of trade secrets, while also responding to new types of conduct such as possession-type infringement, passive use, disclosure of game content, and “spoilers” during the testing stage. In criminal cases, the courts punish in accordance with law such conduct as insider-outsider collusion to steal chip technology, illegal copying of artificial intelligence chip data, and spying upon and providing new energy vehicle business secrets for overseas parties, and have developed adjudicatory rules that may serve as references in such respects as loss determination, layering of liability, and occupational prohibition.
These cases also provide clear directions for enterprises’ trade secret compliance construction. Enterprises should shift from “ex post rights enforcement” to “full-process protection,” and establish complete mechanisms in such areas as R&D project initiation, technical archiving, document classification, access control, employee onboarding and departure management, confidentiality agreements with partners, closed-beta management, audits of outbound data transmission, non-compete arrangements, and confidentiality of litigation evidence. Particularly in high-tech enterprises, trade secret protection should not remain merely at the level of signing confidentiality agreements, but should be implemented through carrier management, access logs, confidentiality-level markings, personnel training, and early warning of abnormal conduct.
From the judicial perspective, the key to trade secret protection is not the indiscriminate expansion of rights boundaries, but the achievement of a balance among protecting innovative achievements, maintaining fair competition, safeguarding reasonable talent mobility, and respecting litigation rights. The signal released by the Shanghai courts through these typical cases is clear: for trade secrets that truly carry enterprises’ innovation investment and competitive advantages, the judiciary will provide strong, timely, and multi-dimensional protection; for claims that lack secrecy, value, confidentiality, or sufficient evidentiary support, the courts will not break through statutory requirements to grant protection. It is precisely through such a strict yet forceful, prudent yet proactive adjudicatory stance that the trade secret system can truly serve innovation-driven development and the construction of a high-level law-based business environment.