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.