There’s a lot of discussion about American companies and citizens risking their trade secrets by using AI based in China. What about Chinese companies? How do they protect their own trade secrets against misappropriation from other Chinese domestic companies seeking to gain an unfair advantage?
As Chinese companies develop their own innovations, they need solid protection from theft too. This has driven an improvement in the Chinese legal system for both domestic and international companies. This same thing happened in the patent system already – pressure from domestic companies led to an improvement in the quality and enforcement of patents.
China does not have a separate trade secret statute (like DTSA in the US), but instead it is part of Article 2 of the “AUCL” – Anti-Unfair Competition Law.
Definitions of trade secrets are remarkably harmonized around the world, unlike patent systems that can vary considerably. China defines them as commercial information unknown to the public that has commercial value and for which its lawful holder has taken proper confidentiality measures. Sounds very similar to DTSA’s three-part definition, doesn’t it? The AUCL even says that trade secrets can include both technical and business information.
The AUCL provides both civil as well as criminal sanctions, again much like DTSA in the US.
There is also increasing litigation in China over trade secret theft, often between two Chinese companies.
Everyone should take steps to maintain the confidentiality of their valuable trade secrets, no matter where they are. This is especially true in today’s politically charged business environment.
