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Many U.S. lawyers are surprised when I tell them that China has legal protection for trade secrets.  Although China’s trade secret protections are scattered across several statutes, the most important is the Anti-Unfair Competition Law (AUCL). Article 10 of the AUCL defines a trade secret as technical and business information unknown to the public which has economic value and practical utility and for which the trade secret owner has taken measures to protect its confidentiality. Article 10 of the AUCL prohibits three forms of misappropriation:

  • The acquisition of a trade secret by theft, inducement, duress or other illegal means;
  • The disclosure or use of a trade secret acquired by the above-described illegal means; and
  • The disclosure or use of a trade secret in breach of an agreement or confidentiality obligation imposed by the trade secret owner.

Continue Reading Surprise: Trade Secrets Are Protected In China

[via Flickr user phalinn]
[via Flickr user phalinn]
Earlier this month, the Ninth Circuit rejected a “will not reapply” clause in a settlement agreement under Business & Professions Code Section 16600, the California state statute that makes most non-compete provisions unenforceable. It is unclear if the holding is limited to the particular facts or if all “will not reapply” clauses are at risk. Such clauses are typical features of settlement agreements arising from employment-based disputes. In settling such disputes, the employer does not want to risk another lawsuit on the same grounds brought by the same person in connection with another job. The employer will bargain for the “will not reapply” clause, giving the employer a contractual basis to reject future employment for that same person, and thus avoiding the risk of another suit. The Ninth Circuit decided, in the case at bar, that Section 16600 precludes such a provision as unenforceable restraint of a substantial character on the ability to work within a particular field or industry.
Continue Reading “Will Not Reapply” Clauses on Life Support in California?

It is common knowledge that California is somewhat of an outlier when it comes to trying to enforce contracts which prohibit employees from competing with their former employer. The recent federal decision in Richmond Technologies, Inc. v. Aumtech Business Solutions, et al., No. 11-CV-02460-LHK, 2011 WL 2607158 (N.D. Cal. July 1, 2011), now provides…

Choice of law issues permeate trade secret and non-compete cases because employers are nationwide and, employees themselves are extraordinarily mobile. Many decisions begin with a discussion of relevant choice of law issues, but often avoid deciding them by finding that the result would be the same under any of the applicable state laws, which are…