Risk warning and prevention of trade secret crime in intellectual property compliance
foreword
Trade secrets belong to a special kind of intellectual property, which is the core competitiveness of enterprises and plays a crucial role in the operation and development of enterprises. Since the first case of infringement of trade secrets in our country was cracked in Nanjing in 1999, the phenomenon of infringement of trade secrets has become more and more, the means are more and more diverse, and the harm is more and more serious. Infringement of trade secrets has become one of the hot issues that seriously disrupt the market order at present, which has attracted much attention.
Enterprises should be highly vigilant and take strict precautions against the crime of infringing on trade secrets.
The crime of infringing on trade secrets refers to the act of infringing on trade secrets by theft, bribery, fraud, coercion, electronic intrusion or other improper means, with serious circumstances. It includes the act of obtaining the right holder's trade secrets by theft, bribery, fraud, coercion, electronic intrusion or other improper means; the act of disclosing, using or allowing others to use the right holder's trade secrets obtained by the preceding means; the act of disclosing, using or allowing others to use the trade secrets in the right holder's possession in violation of confidentiality obligations or in violation of the right holder's requirements for keeping trade secrets; and the act of obtaining, disclosing, using or allowing others to use the trade secrets knowing the above-mentioned acts.
Large fines for infringement of trade secrets
Yu Mouhong, Luo and other four people were originally employees of Zhuhai Saina printing technology joint stock company, and were able to contact and master the customer information of Zhuhai Saina printing technology joint stock company and annual sales volume, sales amount and Zhuhai Saina printing technology joint stock company product cost price, warning price, sales price and other operating information, and have the obligation to keep the trade secrets of Zhuhai Saina printing technology joint stock company.
In early 2011, Yu Mouhong and Huang Mouzhi established Jiangxi Yibo Electronic Technology Co., Ltd. to produce printer toner cartridges and other consumables, and established Zhongshan Ward Company and Hong Kong Aaster Company, American Aaster Company, and European Aaster Company to sell Jiangxi Yibo Electronic Technology Co., Ltd.
Yu Mouhong, Luo and other four people will be due to their working relationship to master the Zhuhai Saina printing technology joint stock company's customer procurement product situation, sales price system, product cost and other information privately brought into Jiangxi Yibo Electronic Technology Co., Ltd., Zhongshan Ward Company, in order to designate the US price system and European price system of some products of the two companies, and to lower than the price of Zhuhai Saina printing technology joint stock company to the original part of Zhuhai Saina printing technology joint stock company customers sell the same type of products.
After the financial information and export declaration audit of Jiangxi Yibo Electronic Technology Co., Ltd. and Zhongshan Ward Company, the two companies sold to 11 customers of the original Zhuhai Saina Printing Technology joint stock company the same type of products as Zhuhai Saina Printing Technology joint stock company for a total amount of about 7.66 million US dollars; according to the Zhuhai Saina Printing Technology joint stock company The average gross profit margin of the same type of products is calculated, the economic loss caused to Zhuhai Saina Printing Technology joint stock company totaled RMB 22.
70million yuan.
The court sentenced Jiangxi Yibo Electronic Technology Co., Ltd. to a fine of 21.40 million yuan for the crime of infringing on trade secrets; Zhongshan Ward Printer Equipment Co., Ltd. for the crime of infringing on trade secrets, and sentenced a fine of 14.20 million yuan;.... (The other parties in this case also made corresponding penalties are not listed one by one).
II. Crimes and penalties for infringing on trade secrets
1. Criminal liability for the crime of infringing on trade secrets
Article 219 of the Criminal Law stipulates that anyone who commits any of the following acts of infringing on trade secrets, if the circumstances are serious, shall be sentenced to fixed-term imprisonment of not more than three years, and shall also be sentenced to a fine or a single fine; if the circumstances are particularly serious, he shall be sentenced to fixed-term imprisonment of not less than three years but not more than ten years, and shall also be fined:
(1) Obtaining the trade secrets of the right holder by theft, bribery, fraud, coercion, electronic intrusion, or other improper means;
(2) Disclosing, using, or allowing others to use the trade secrets of the rights holder obtained by the means of the preceding paragraph;
(3) Disclosing, using or allowing others to use the trade secrets in their possession in violation of confidentiality obligations or in violation of the right holder's requirements for keeping trade secrets.
Anyone who knowingly acquires, discloses, uses or allows others to use the trade secret, knowing the acts listed in the preceding paragraph, shall be considered as infringing on the trade secret.
The right holder as mentioned in this Article refers to the owner of the trade secret and the user of the trade secret authorized by the owner of the trade secret.
Article 220 of the Criminal Law provides that if a unit commits a crime specified in Articles 213 to 219-1 of this section, the unit shall be fined, and the person in charge directly responsible for it and other directly responsible persons shall be punished in accordance with the provisions of each article of this section.
2. Criteria for filing crimes of infringement of trade secrets
Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases of Intellectual Property Infringement (3) Article 4: Where an act stipulated in Article 219 of the Criminal Law is carried out under any of the following circumstances, it shall be determined as "causing major losses to the right holder of trade secrets".
(The Criminal Law Amendment (XI), which came into effect on March 1, 2021, changes the original criminalization standard "causing significant losses to the owner of the trade secret" to "serious circumstances" on the constitution of the crime of infringing on trade secrets.):
(1) The amount of losses caused to the right holder of the trade secret or the amount of illegal income from infringing the trade secret is more than 300,000 yuan;
(2) directly causing the right holder of the trade secret to go bankrupt or close down due to major business difficulties;
(3) causing other major losses to the right holder of the trade secret.
If the amount of losses caused to the right holder of a trade secret or the amount of illegal gains from infringing a trade secret is more than 2.5 million yuan, it shall be determined as "causing particularly serious consequences" as stipulated in Article 219 of the Criminal Law.
III. Key points for preventing trade secret risks
The above-mentioned "huge fine case for infringement of trade secrets" is a successful example of the Guangdong Provincial court system implementing the "three-in-one" model of intellectual property trial to try intellectual property criminal cases. The spirit of the judgment, whether in terms of the amount of fines or the criminal responsibility of natural persons, reflects the orientation of severe punishment for intellectual property infringement crimes, demonstrating China's determination to strictly protect intellectual property rights.
Coincidentally, on November 18, 2021, the Shenzhen Longgang District People's Court issued the criminal judgment (2020) Guangdong 0307 Xingchu No. 3076, in order to safeguard the country's intellectual property protection system, protect the legitimate rights and interests of others from infringement, and crack down on crimes, according to the facts, nature, circumstances, and degree of harm to society of the two defendants Zhao Yifa and Li Xiaogang's crimes, as well as their status and role in public crimes, comprehensive their guilty attitude, and after deliberation by the collegial panel, sentenced the two defendants to the crime of infringing trade secrets, each sentenced to three years in prison, and each fined 5 million yuan.
Under the guidance of the national innovation-driven development and the strategy of rejuvenating the country through science and education, managing and preventing trade secret risks is an important module that cannot be ignored in corporate compliance management, and it is a matter of life and death for enterprises, especially start-up high-tech companies. According to the laws of our country, "not known to the public," "having commercial value" and "taking corresponding confidentiality measures" together constitute the legal elements of trade secrets.
It is recommended that enterprises conduct trade secret compliance management from the following aspects and pay attention to risk prevention.
1. Enterprises should enhance their legal awareness of trade secret protection and beware of infringement or infringement
Trade secrets such as technical information and business information can bring economic benefits and practicality to the right holders, and are the intangible assets and core competitiveness of enterprises. Today's social market competition is extremely fierce, enterprises not only need to work hard to develop but also pay attention to how to protect their trade secrets and other intellectual property rights, which is an invincible sword for enterprises in the market competition.
Enterprises should raise their awareness of the protection of trade secrets by law, strictly protect their trade secrets, and prevent losses to the enterprise from being infringed by others. At the same time, they should also pay attention to abide by relevant laws and regulations to prevent violations of other people's trade secrets from being punished.
2. Enterprises need to determine the specific scope of trade secret protection
Although trade secrets are protected by law, it is not easy to determine the infringement of trade secrets. In judicial practice, in the trial of trade secret cases, the right holder must first clarify the scope of their trade secrets - that is, clarify the secret points. The focus of controversy in many cases is the determination of the scope of trade secrets.
Therefore, the author suggests that enterprises should take risk prevention and control before doing good deeds, improve the management level of trade secrets, and eliminate hidden dangers in the bud as much as possible. According to the provisions of the Anti-Unfair Competition Law, trade secrets refer to technical information and business information that are not known to the public, can bring economic benefits to the right holder, are practical and have been kept confidential by the right holder.
Therefore, trade secrets include two parts: technical information and business information. Enterprises should clarify the scope of technical information and business information that need to be kept confidential in the management of trade secrets. Generally speaking, technical information includes technical design, technical samples, quality control, application tests, technological processes, industrial formulas, chemical formulas, production processes, production methods, computer programs, etc.
As technical information, trade secrets, also known as technical secrets, know-how, non-patented technology, etc., are often referred to as Know-How in international trade. Business information mainly includes: development planning, competition plans, management know-how, customer lists, sources of goods, customer information, price plans, production and sales strategies, financial status, investment and financing plans, tender bids, negotiation plans, etc.
After the content of the trade secret is determined, it is necessary to divide the trade secret into three different secret levels: top secret, secret and secret according to the importance of the trade secret. According to the different secret levels, different levels of protection and protection periods can be set.
According to Article 9 of the Anti-Unfair Competition Law and Article 1 of the Judicial Interpretation of Trade Secrets, trade secrets refer to technical information, business information, and other commercial information that is not known to the public, has commercial value, and has been subject to corresponding confidentiality measures by the right holder. Among them, the structure, raw materials, components, formulas, materials, samples, patterns, plant variety propagation materials, processes, methods or their steps, algorithms, data, computer programs, and related documents related to technology may be determined by the people's court to constitute technical information within the meaning of Article 9, Paragraph 4 of the Anti-Unfair Competition Law.
The people's court may determine that information related to business activities, such as creativity, management, sales, finance, plans, samples, bidding materials, customer information, data, etc., constitutes business information referred to in Article 9, Paragraph 4 of the Anti-Unfair Competition Law. Customer information referred to in the preceding paragraph includes information such as the customer's name, address, contact information, trading habits, intentions, and content.
3. Businesses need to take specific and effective confidentiality measures
Trade secrets, as an important intangible asset that exists through the self-protection of the right holder, have confidentiality measures is an inherent requirement for their protection by law. Especially in criminal cases, there are stricter standards for the investigation of confidentiality measures. As the information protected by trade secrets, the right holder must subjectively have the awareness of protecting the information as a secret, and objectively should also implement corresponding confidentiality measures.
In the three legal components of trade secrets, confidentiality requires active measures and should be taken seriously. If confidential information is not protected by reasonable confidentiality measures, it may lose confidentiality and not be protected by law.
Article 5 of the "Judicial Interpretation on Trade Secrets" stipulates that the reasonable confidentiality measures taken by the right holder to prevent the leakage of trade secrets before the alleged infringement occurs shall be determined by the people's court as the corresponding confidentiality measures as mentioned in Article 9, Paragraph 4 of the Anti-Unfair Competition Law. The people's court shall determine whether the right holder has taken corresponding confidentiality measures based on factors such as the nature of the trade secret and its carrier, the commercial value of the trade secret, the degree of identification of the confidentiality measures, the degree of correspondence between the confidentiality measures and the trade secret, and the right holder's willingness to keep secrets.
Article 6 of the Judicial Interpretation on Trade Secrets stipulates that under any of the following circumstances, which are sufficient to prevent the leakage of trade secrets under normal circumstances, the people's court shall determine that the right holder has taken corresponding confidentiality measures: (1) signing a non-disclosure agreement or stipulating confidentiality obligations in the contract; (2) through articles of association, training, rules and regulations, written notifications, etc., making confidentiality requirements for employees, former employees, suppliers, customers, visitors, etc. who can access or obtain trade secrets; (3) restricting visitors or conducting differentiated management of confidential factories, workshops, and other production and business places; (4) marking, classifying, isolating, Where trade secrets and their carriers are distinguished and managed by means of encryption, storage, or limiting the scope of personnel who can access or obtain them; (5) Where measures such as prohibiting or restricting the use, access, storage, or copying of computer equipment, electronic equipment, network equipment, storage equipment, or software that can access or obtain trade secrets are taken; (6) Where former employees are required to register, return, clear, or destroy the trade secrets and their carriers they have contacted or obtained, and continue to bear the obligation of confidentiality; (7) Where other reasonable confidentiality measures are taken.
The corresponding confidentiality measures listed in the above legal provisions can be summarized into two categories. The first category is the confidentiality measures for classified personnel, including items (1) (2) (6); the second category is the confidentiality measures for classified information, including physical isolation methods and electronic isolation methods, corresponding to items (3) (4) (5).
4. Enterprises need to pay attention to preventing the criminal risk of "recruiting talents" leading to the crime of infringing trade secrets
The problem of taking away trade secrets due to the flow of talents is very prominent in judicial practice. Enterprises should not only strengthen confidentiality measures in the management of intellectual property compliance to prevent the loss of talents from damaging the rights and interests of enterprises, but also avoid attracting talents through improper means and conducting improper talent transactions. Be vigilant that new employees bring the trade secrets of their former employers to bear criminal responsibility.
According to the second paragraph of Article 219 of the Criminal Law, "Anyone who knowingly obtains, discloses, uses or allows others to use the trade secret shall be considered as infringing on the trade secret." It can be seen that if he knowingly or should have known that others have committed acts of infringing on the trade secret, he still obtains, discloses, uses or allows others to use the trade secret shall be punished as the crime of infringing on the trade secret.
In the "huge penalty case for infringing trade secrets" mentioned above, it was through talent poaching that the former employer's trade secrets were infringed. Jiangxi Yibo Electronic Technology Co., Ltd. and Zhongshan Ward Printer Equipment Co., Ltd. were convicted of infringing trade secrets and sentenced to huge fines. If they did not know the law and violated the law, it also showed that the legal awareness of the two companies was weak, and other companies should take this as a warning.
IV. Conclusion
As one of the most important intangible assets of an enterprise, adequate management and protection of trade secrets is the foundation for an enterprise to gain a competitive advantage. Infringement of other people's trade secrets should also be punished by law. Enterprises should not only protect their own competitive advantages in management, but also prevent violations of laws and regulations, which is a long-term solution.
* The above published articles only represent the author's own views and do not represent any form of legal advice or advice issued by Guangdong
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About the Author
Wang Qionghua, Lawyer
, Partner Lawyer
Secretary General of Copyright Law Professional Committee of Shenzhen Law Association
Real Estate and Construction Engineering Research Center
Urban Renewal Professional Committee, Deputy Director
Representative cases: Shenzhen Luohu District shantytown reconstruction legal special project service (was rated as "advanced individual" in the legal service work of the project), Shenzhen Longhua Investment Holdings (Group) Co., Ltd. Historical legacy problem handling policy research special project legal services, Shenzhen Baoan District Shiyan Street Land Preparation Affairs Center Land Preparation Legal special project services, etc.