The Revisions of Anti-unfair Competition Law Effective Commencing April 23, 2019

May 30, 2019

On April 23, 2019, the "Anti-Unfair Competition Law of the People's Republic of China (Second Amendment)" was adopted by the 10th Session of the Standing Committee of the 13th National People's Congress of China, which went into force immediately upon announcement.

 

The revised provisions are as follows:

 

Article 9

 

In the definition of “trade secret”:

“Technology or business information” is revised as “technology, business and other information”.

 

Item 3 of the acts of infringing on trade secret:

“In violation of an agreement” is revised as “in violation of the confidentiality obligations”

 

One newly added circumstance in Item 1 of the infringing acts:

“Obtaining trade secrets of right holders by theft, bribery, fraud, intimidation, electronic intrusion or other improper means”

 

Item 4 of the infringing acts (newly added)

“Instigating, tempting, helping others to violate confidentiality obligations or rights holders’ confidentiality requirements; obtaining, disclosing, using or allowing others to use the trade secrets of the right holder”.

 

Newly added paragraph:

“Any other natural person, legal person or unincorporated person other than the business operator who commits the illegal acts listed in the preceding paragraph shall be deemed to have infringed on trade secrets”.

 

 

Article 17

 

Increased legal indemnity:

The limit increased from RMB 3 million to RMB 5 million.

 

Newly added punitive compensation provisions applicable to trade secret infringement cases:

“If the business operator maliciously commits a violation of trade secrets, in serious cases, the amount of compensation shall be determined according to the actual loss suffered by the right holder due to the infringement or the infringer’s gains from the infringement and then multiplied by one to five times”

 

 

Article 21

 

Increased legal indemnity:

The limit increased from RMB 3 million to RMB 5 million.

 

Increased administrative penalties for violations of trade secrets:

  • Added punishment: Confiscation of illegal gains
  • Increased fine limits: “in serious cases, impose a fine between RMB 500,000 and RMB 3 million” is revised as “in serious cases, impose a fine between RMB 1 million and RMB 5 million”.

 

 

Article 32 (Newly added)

 

The provisions concerning the transfer of burden of proof in “the elements of constitution of trade secrets”:

“In the civil trial procedure for infringing trade secrets, the trade secret right holder has provided prima facie evidence that confidential measures against the claimed trade secrets is taken and has reasonably indicated the trade secret is infringed, the alleged infringer should prove that the trade secret claimed by the right holder is not a trade secret under this law.

 

The provisions concerning the transfer of burden of proof in “infringement acts”:

“The trade secret right holder has provided prima facie evidence that the trade secret is infringed and has provided one of the following evidences, the alleged infringer should prove that there is no infringement of the trade secret:

(1) There is evidence that the alleged infringer has access to or has opportunity to obtain the trade secret and the information used by the alleged infringer is substantially the same as the trade secret;

(2) There is evidence that the trade secret has been disclosed, used or suspected of being disclosed and used by the alleged infringer;

(3) There is other evidence that the trade secret is infringed by the alleged infringer.”

 

(Translated from the original article on the National People’s Progress of P.R.C. website)

 

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