In recent years, the protection of trade secrets has become a new hot spot in intellectual property protection. At the legislative level, in 2019, the Standing Committee of the National People’s Congress specifically revised the trade secret provisions in the Anti-Unfair Competition Law. In the judicial aspect, the Supreme People’s Court continues to promote the civil judgment of trade secrets. Under the parallel law enforcement system for intellectual property protection with local characteristics, the administrative protection of trade secrets has incomparable characteristics of civil protection and criminal protection, which should also receive sufficient attention.
Advantages of Admininistrative Protection
Convenient and Fast
Unlike civil protection, which has the advantage of parties directly seeking compensation, or criminal protection, which has the advantage of severe punishment, administrative protection has the advantage of being more convenient and accelerated.
Low Threshold
On one hand, during the administrative investigation of trade secrets, the threshold for parties to successfully register a case is low, and law enforcement agencies can implement inspections, inquiries, and even sealing and seizure measures as well as other powerful evidence collection capabilities.
Short Investigation Period
On the other hand, although parties cannot directly receive compensation during the administrative investigation, the administrative investigation period is short. The parties involved in the procedure can also achieve quick compensation through a settlement agreement. These advantages effectively make up for the shortcomings of civil protection and criminal protection for infringement of trade secrets that have not yet caused serious consequences due to the resignation of personnel, or the infringers in the same area or between small start-up enterprises.
Flexibility
The adoption of administrative penalties can not only protect the trade secret right holders, but also achieve equal punishment purpose for infringers so as to avoid heavy punishments for small mistakes, which is reflected the flexibility of administrative protection.
However, administrative protection inevitably has problems such as large discretionary power and local protectionism. Moreover, since there are still administrative litigation remedies in the future, it is generally difficult to achieve the right holder’s ultimate purpose in the administrative procedures, resulting in mixed effects of administrative protection of trade secrets in practice.
In recent years, the protection of trade secrets by local Market Supervision and Regulation Bureau, has become an important part of the anti-unfair competition enforcement scheme deployed by the State Administration for Market Regulation, which has also achieved positive results across the country. Market supervision departments in various regions not only paid more attention to investigating and handling specific trade secret cases, but also continued to pool resources and manpower to improve law enforcement levels and the issuance of administrative law enforcement guidelines.
In recent years, the protection of trade secrets by local Market Supervision and Regulation Bureau, has become an important part of the anti-unfair competition enforcement scheme deployed by the State Administration for Market Regulation, which has also achieved positive results across the country. Market supervision departments in various regions not only paid more attention to investigating and handling specific trade secret cases, but also continued to pool resources and manpower to improve law enforcement levels and the issuance of administrative law enforcement guidelines.
Case Filing
Who Collect Evidence
Illegal acts that infringe on trade secrets are often concealed. It is usually difficult for rights holders to obtain and fix straightforward evidence of infringement on their own. Right holders need to rely on law enforcement measures to identify infringements, such as investigation measures by Public Security Bureau and evidence preservation by People’s Courts.
How to Collect Evidence
Regarding administrative protection, Article 13 of the Anti-Unfair Competition Law of the People’s Republic of China clearly stipulates that administrative agencies may enter into the business premises where the unfair competition occurs during inspection process. They can also take measures such as requiring the person under investigation to explain the situation, submit materials, seal and detain relevant suspected property, etc. Compared with the right holder’s burden of proof in criminal and civil procedures, the threshold for initiating these investigation measures is relatively lower.
Burden of Proof
The effective Regulations on Prohibition of Infringement of Trade Secrets published in 1998 only specifies that the burden of proof of the right holder in a trade secret case, which is, when the right holder believes that his or her trade secret has been infringed and applies to administration departments to investigate and deal with the infringement , he or she should provide relevant evidence in connection with the existence of infringement behaviors of trade secrets.
Case Filing Standard Set by Local Guidelines
In practice, there is no clear and unified case filing standards for trade secret administrative cases. At present, local market supervision departments at various levels, through the issuance of local trade secret protection guidelines and guidance, clarified the reporting materials and evidence standard.
For example, in the Guidelines for the Administrative Enforcement of Trade Secrets issued by Tianjin Economic and Technological Development Zone gave a detailed explanation of the rights holder’s reporting materials and listed and explained various preliminary evidence required in the reporting materials. The right holder can preliminarily prove the existence of the infringement by showing confidentiality facilities destroyed or trade secrets disclosed or used. At the same time, it also leaves room for the right holder to reasonably prove the infringement through other means.
Compared with the public security bureaus requiring the right holder to submit a Non-public Appraisal Report, Consistency Appraisal Report and Loss Calculation and Assessment Report issued by a third party, these administrative regulations set a lower threshold for filing a trade secret infringement case, which is simpler and more conducive to rights holders to get protection fast.
Case deadline
15+15 days and 90 +30+N days
Another advantage of administrative protection of trade secrets is the short period of enforcement and injunction issuance.
According to the Provisions on Administrative Punishment Procedures for Market Supervision and Regulation, the administrative procedures for trade secrets are subject to 15+15 days case checking and filing, 90 +30+N days case deciding.
Appraisals etc Excluded
At the same time, during the case filing and handling procedures, it is stipulated that the time of appraisal, inspection, identification and other matters will not be included in the period.
Time for case suspension and hearing are also excluded from the period calculation.
Official Appraisal Entrusted
In trade secret administrative cases, if the case involves a relatively complex technical secret, and the evidence provided by the right holder is not sufficient to prove that non-public feature during the verification stage, the administrative department will, before the case is filed, entrust an appraisal agent to conduct a non-public appraisal.
After the case is filed and when the more complex consistency comparison is involved, the administrative department will also entrust a technical consistency appraisal agent again. The above time for appraisal is not included into the prescribed period for handling the trade secret case.
For trade secret case without complex issues the processing time limit is relatively clear, and it has a clear time limit advantage compared with civil and criminal legal procedures.
Measures Taken in Enforcement
It should be noted that Article 13 of the Anti-Unfair Competition Law stipulates that administrative departments may take measures of seizure relevant property during enforcements; Article 56 of the Administrative Punishment Law also stipulates those measures adopted such as seizure, recording and preservation of suspected infringing products during the investigation are permitted.
These measures can often effectively prevent trade secret infringement promptly and the infringer might voluntarily give up continuous commitment of infringement, which can quickly and substantially resolve disputes.
