Recently, the first instance of a business secret infringement dispute with a claim of over RMB 8 million, represented by Shengzhi, was concluded. The court fully rejected all claims of the plaintiff, a thermal energy technology company, and the defendant represented by our firm secured a complete victory, successfully saving the client from huge economic losses. This victory demonstrates our firm’s professional strength in handling complex intellectual property disputes.
Case Summary
The plaintiff in this case is a thermal energy technology company (hereinafter referred to as “the Plaintiff”). Its former employee Zhang, during and after his employment, jointly established multiple affiliated companies with his relatives and engaged in the same business as the Plaintiff. The Plaintiff accused Zhang and the affiliated companies of engaging in unfair competition by utilizing business secrets such as its key customer information, and demanded that our client immediately cease the infringement and jointly compensate over RMB 8 million in economic losses plus reasonable expenses.
Case Handling Process
After accepting the engagement, our lawyers conducted an in-depth analysis of the case. We held that the core issue lies in whether the “customer information” claimed by the Plaintiff constitutes a trade secret under the law.
During the trial, we put forward strong defense arguments centering on the statutory elements of trade secrets:
- The Plaintiff failed to prove secrecy: most of the supplier and customer information it claimed was accessible through public channels and was not confidential information “unknown to the public”.
- The Plaintiff failed to take reasonable confidentiality measures: the Plaintiff could not provide valid evidence of a confidentiality agreement signed with the involved former core employee, nor could it prove that specific confidentiality measures commensurate with the commercial value had been taken before the alleged infringing act occurred. Although the Plaintiff submitted documents such as the Management System and Confidentiality Agreement, it could not prove that Zhang had signed the agreement or was aware of the content of the aforementioned documents before the infringing act took place.
The court fully adopted our agency opinions in the judgment, holding that the Plaintiff failed to prove it had taken reasonable confidentiality measures for the relevant customer information before the alleged infringing act, and the information it claimed did not meet the constituent elements of a trade secret. Therefore, all its claims lacked factual and legal basis and were rejected in accordance with the law.
Legal Insights
This victory once again clarifies the judiciary’s prudent attitude toward the identification of trade secrets. The boundaries of rights must be clear, and the claimant shall bear the full burden of proof. In particular, the key link of taking “reasonable confidentiality measures” directly determines the success or failure of a rights protection claim.
For enterprises, this case also serves as an important warning: it is necessary to establish and improve an internal trade secret protection system, especially signing confidentiality agreements with clear rights and responsibilities with core employees, and implementing confidentiality measures in detail, so as to effectively protect their core competitiveness.
Successfully resolving the client’s risk of a claim of over RMB 8 million is another practice of our firm’s philosophy of Shengzhi: Excellence in Action. Beijing Shengzhi Law Firm will continue to provide clients with optimal legal solutions and defend their legitimate rights and interests by virtue of profound professional knowledge and rich practical experience in commercial dispute resolution, intellectual property and other fields.
(Note: Case details have been desensitized for privacy. For specific case information, please contact the firm for further consultation.)
