Liping Xu

Key takeaways from a recent Chinese judgment
&nbsp;
Confidential technical information is a critical source of competitive advantage for enterprises whose market position depends on technical expertise, product design or process innovation. That information, however, is placed at significant risk when employees with access to confidential materials leave the company.&nbsp; 
Employee turnover is now the leading risk factor for the loss of trade secret rights. A recent technical secret infringement judgment issued by Suzhou Intermediate Court considered precisely this issue, clarifying the criteria for identifying protectable technical secrets.&nbsp; 
The judgment provides important guidance on the management of confidential technical information and serves as a reminder that effective intellectual property protection requires robust confidentiality controls before disputes arise.
&nbsp;
<div class="WordSection1">
<h2 class="MsoNormal" style="word-break: break-all; margin: 12.9pt 0in 8.35pt 0in;">Case background</h2>
</div>
The dispute arose after a senior research and development employee left the plaintiff company, which had invested substantial resources in developing a proprietary technical solution for a spare part for escalators.&nbsp; 
The relevant information was not limited to isolated structural parameters. Rather, it covered nine categories of confidential technical information, including the product's overall dimensions, the length and width of supporting structures, hole-opening angles, plate thicknesses, machining tolerances, cut-out shapes, the layout of connecting cavities and other technical specifications.&nbsp; 
These parameters were derived from repeated testing and technical calculation and were critical to achieving the required product performance while controlling production costs. This information was comprehensively recorded in the plaintiff’s proprietary technical drawings.&nbsp; 
During his long-term employment with the plaintiff, the former employee held a senior R&amp;D role that gave him access to the relevant confidential technical information. He obtained access to the related technical materials through internal emails, project drawings and 3D model files, and was bound by multiple confidentiality agreements imposing continuing obligations during and after his employment.&nbsp; 
Two months after his departure, the employee joined a competing company in the same industry. Soon after, rival component products were launched on the market with structures, dimensions and tolerances that were highly consistent with the plaintiff's confidential technical information. Evidence preserved through notarisation showed that the products had been mass-produced and sold by the competing company.&nbsp; 
The plaintiff subsequently filed a lawsuit against the former employee and the competing company, alleging that they had jointly infringed its technical secrets.&nbsp; 
In response, the defendants denied that the information claimed by the plaintiff qualified as protectable technical secrets. They argued that the relevant products had already been publicly circulated and that their structural features could be obtained by any member of the public through visual observation and simple measurement.
&nbsp;
<h2 class="MsoNormal" style="word-break: break-all; margin: 13.95pt 0in 7.95pt 0in;">Key findings</h2>
The court’s judgment provides useful guidance on the criteria for identifying technical secrets and clarifies several issues commonly raised in technical secret disputes.&nbsp;
One such issue is the extent to which a combination of technical features may remain protectable even where the individual elements are publicly known.&nbsp;
The court held that, in determining whether technical information is publicly known, it is insufficient to examine individual dimensions or partial structural features in isolation. Rather, the focus should be on whether the complete combination of technical parameters, structural features and machining tolerances is publicly available.&nbsp;
Applying this approach, the court found that although the relevant products had been sold on the market and certain external features were visible, this did not mean that the full set of confidential technical information had entered the public domain.&nbsp;
In particular, the tolerances, internal cavity layouts, slot angles, plate-matching ratios and modular connection logic could not be obtained through simple observation or measurement; they were the result of substantial R&amp;D effort.&nbsp;
The court found that the publicly available materials relied on by the defendants disclosed, at most, certain isolated structural features. They did not disclose the complete combination of confidential technical information claimed by the plaintiff and were therefore insufficient to negate confidentiality. 
The court further held that the plaintiff had taken reasonable measures to preserve confidentiality before the alleged infringement. The relevant technical information was recorded in technical drawings marked with ownership information and dates. Employees with access to such information had signed confidentiality agreements, employee confidentiality declarations and code of conduct confirmations, which identified the scope of confidential information and set out their confidentiality obligations. The plaintiff had also included confidentiality provisions in technical service contracts with third parties. 
These measures, viewed collectively, formed a coherent confidentiality management system which the court considered to be sufficiently clear in demonstrating the plaintiff’s intention to preserve confidentiality. The court found the measures were capable of preventing disclosure under normal circumstances.&nbsp;
&nbsp;
<h2 class="MsoNormal" style="word-break: break-all; margin: 13.95pt 0in 7.95pt 0in;">A finding of joint infringement</h2>
The court placed particular weight on evidence that the former employee had access to the plaintiff’s confidential technical information during his employment. In particular, the court verified internal email records showing that the employee had received confidential technical materials, including complete 3D model files, confirming that he had access to the full set of technical secrets. The significance of that access was reinforced by the employee’s subsequent move to a competitor, which later launched identical component products.&nbsp;
Crucially, the defendants also failed to submit independent R&amp;D drawings, design logs, test records or other evidence showing a legitimate technical source for the accused products.&nbsp;
Therefore, the court found that the former employee had breached his confidentiality obligations by disclosing confidential technical information and that the competing company had knowingly obtained and used that information. The two defendants were accordingly held jointly liable and ordered to cease the infringement and pay compensation.&nbsp;
This case highlights the importance of robust technical information protection and effective personnel management, particularly for R&amp;D and manufacturing enterprises whose employees have access to confidential technical materials.&nbsp;
To reduce the risk of unauthorised use or disclosure and strengthen protection under the Anti-Unfair Competition Law, enterprises should consider the following measures.&nbsp;
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<div class="WordSection1">
<h2 class="MsoNormal" style="line-height: 115%; margin: 13.95pt 52.8pt 4.65pt 0in;">Classify technical information and coordinate patent and technical secret protection&nbsp;</h2>
</div>
Enterprises should first classify their technical information according to the most appropriate form of protection. For technologies susceptible to reverse engineering and whose core structures are fully exposed after product launch, patent protection may be more appropriate.&nbsp;
By contrast, where the value of technical information lies in precise tolerances, internal cavity combinations, process ratios and parameter sets that cannot be fully obtained through visual observation, technical secret protection may be more suitable for long- term protection.&nbsp;
&nbsp;
<h2 class="MsoNormal" style="word-break: break-all; margin: 13.95pt 0in 7.95pt .75pt;">Establish a robust confidentiality management system</h2>
Enterprises should implement confidentiality controls throughout the employee lifecycle, including onboarding, employment and departure. R&amp;D staff and other employees with access to sensitive technical information should sign confidentiality agreements when joining the company, clearly defining the scope of confidential information, their continuing confidentiality obligations and liability for breach.&nbsp;
Enterprises should also adopt hierarchical control over technical documents. Confidential drawings and 3D models, in particular, should be encrypted, access should be restricted according to job responsibilities and full operation logs should be retained. Transmission of confidential files through personal email, USB drives or unauthorised cloud storage should be prohibited.&nbsp;
Finally, enterprises should standardise exit procedures. These should include recovering physical and electronic confidential materials, obtaining signed confirmations of continuing post-employment confidentiality obligations, and promptly disabling internal system access. In the event of infringement disputes, a complete record of confidentiality measures and employee access can significantly strengthen the rights holder’s evidentiary position.
&nbsp;
<h2>Conduct regular IP risk reviews</h2>
Enterprises should regularly review their core technical assets, define the boundary between patent protection and technical secret protection, and update confidentiality controls in a timely manner. 
Market monitoring should also be implemented, especially where employees have joined competitors or where competing products appear to use similar technical features.&nbsp; 
&nbsp;
This article was first published in <a href="https://www.iam-media.com/trade-secrets/article/protecting-technical-trade-secrets-in-product-design-key-takeaways-recent-chinese-judgment">IAM</a> in September 2026.&nbsp;

Protecting technical trade secrets in product design: key takeaways from a recent Chinese judgment

Alice Yu

Livestream e-commerce has become one of the fastest-growing channels in China’s online retail market, but it has also introduced new complexities for rights holders seeking to combat counterfeit and copycat products.
Real-time selling, fragmented evidence, account switching and replacement-entity operations can make it more challenging to prove infringement, identify responsible parties and secure effective remedies.&nbsp;
Two recent civil cases handled by this author – one resulting in an award of Rmb10 million (approximately $1.5 million) in punitive damages and the other in an award of Rmb5 million ($740,000) in maximum statutory damages – reveal the practical challenges of livestream IP infringement in China and present strategies that may help rights holders pursue stronger enforcement outcomes.&nbsp;
&nbsp;
<h2>New infringement patterns in livestream and traditional e-commerce</h2>
China’s online retail market continues to grow, according to statistics published by the National Bureau of Statistics.&nbsp;
At the same time, third-party industry analysts suggest a divergence between traditional shelf-based e-commerce and livestream commerce. Growth in the former has slowed, while the latter continues to expand at a significantly faster pace.
That shift is important for rights holders. Livestream e-commerce’s low barriers to entry, high traffic concentration and rapid monetisation have attracted large numbers of small streamers, micro-businesses and individual operators.&nbsp;
These same features have also created new practical issues for traditional IP enforcement strategies. Compared with the relatively standardised and static operating model of traditional e-commerce, infringement in livestream settings often presents a different evidential and litigation profile.
In traditional shelf-based e-commerce, infringing product listings may remain visible for extended periods, store operators are comparatively stable and transaction records are often easier to trace. Rights holders can therefore rely on post-event evidence collection and platform complaint procedures to pursue relatively routine enforcement.
Livestream commerce operates differently. It is built around real-time, content-led selling. Infringing conduct may therefore be instantaneous, fragmented, dynamic and difficult to preserve in full for the following reasons:
<ul>
<li>Infringing content may disappear as soon as a stream ends.&nbsp;</li>
<li>Product listings may be repeatedly taken down and relaunched.</li>
<li>Operators may switch accounts, stores or livestream rooms with minimal delay.</li>
</ul>
As a result, livestream infringement often requires a more tailored evidence and enforcement strategy, particularly in industries such as fashion and luxury goods, where these issues arise frequently.
&nbsp;
<h2>Challenges of livestream IP infringement cases</h2>
IP infringement cases involving livestream sales tend to raise four recurring practical challenges:&nbsp;
<ul>
<li>preserving evidence effectively;</li>
<li>quantifying the scale of infringement;&nbsp;</li>
<li>identifying the parties truly responsible; and&nbsp;</li>
<li>proving bad faith.&nbsp;</li>
</ul>
These issues can, in some cases, make it more difficult for rights holders to obtain higher damages and to address repeat infringement in a comprehensive way.
&nbsp;
<h2>Evidence disappears quickly, and front-end evidence collection is inherently partial</h2>
A defining feature of livestream selling is real-time transaction activity. Product displays, comparative references to well-known brands and misleading promotional statements may appear only briefly during the broadcast itself. To reduce the risk of platform scrutiny or rights holder action, infringers may rotate product listings, shut down stores, cancel accounts and move between livestream rooms.
As a result, traces of infringement are often not preserved for long. Traditional methods (eg, screenshots and short video captures) usually record only isolated fragments of a single stream. They may not sufficiently reconstruct the infringer’s sustained commercial conduct or the full scale of the operation, which can make it harder to meet the evidential threshold for higher damages.
&nbsp;
<h2>Organised operations may disperse liability and obscure the operator</h2>
Livestream infringement often involves multiple actors, including manufacturers, suppliers, store operators, hosts and MCN agencies.
The boundaries of responsibility between them are often not immediately clear. In practice, larger-scale infringing operations may be run as co-ordinated networks, with the real operator controlling multiple accounts, stores and presenters while presenting them as separate businesses.&nbsp;
Where each individual store or account appears to generate only modest sales, the traditional ‘one store, one action’ or ‘one account, one action’ model may fail to identify the controlling party and can leave the underlying operation largely unaffected. This makes it more difficult to address the conduct at its source.
&nbsp;
<h2>The scale of infringement may be difficult to quantify, affecting the basis for damages</h2>
In traditional e-commerce cases, rights holders can often rely on publicly visible information (eg, product listings, historical sales volumes and customer reviews) to estimate the scale of infringement.
In livestream commerce, by contrast, there may be no stable product listing, and key transaction data is generally held only in the platform back end. Front-end users often cannot access cumulative sales figures, operating periods or other core metrics.&nbsp;
This creates an evidential issue. Rights holders may be unable to prove that the infringement was continuous, frequent and large-scale through self-collected evidence alone.&nbsp;
That may have direct consequences for damages. At the filing stage, limited evidence may make it harder for the claimant to support a higher-value claim, which can in turn affect court jurisdiction.&nbsp;
At trial, if back-end data is not obtained from the platform and damages are assessed primarily on the basis of front-end evidence, the damages awarded may be more limited than the rights holder considers appropriate.
&nbsp;
<h2>Bad faith can be difficult to prove, making repeat infringement harder to address fully</h2>
Many infringers respond to complaints, administrative penalties or litigation by changing the operating entity, switching accounts or moving to a different livestream room.&nbsp;
Formally, this may create the appearance of a new business. In substance, however, the same operational team may continue the same infringing activity.
Although this tactic is also seen in traditional e-commerce infringement, the nature of livestream commerce makes this pattern more frequent.
This type of concealed continuity can make it difficult for rights holders to prove repeated infringement or subjective bad faith.
It may also create practical obstacles for courts considering whether the legal conditions for punitive damages have been met.
&nbsp;
<h2>A three-part strategy for stronger outcomes</h2>
To respond to these practical challenges, rights holders and their counsel often need to move beyond superficial evidence collection and single-point claims.&nbsp; Based on the author’s experience in multiple disputes involving well-known fashion brands, a more effective approach combines three elements:
<ul>
<li>looking beyond surface-level party structures to identify the controller;</li>
<li>using common identifying features to filter and aggregate infringing sales data; and&nbsp;</li>
<li>constructing a closed evidential chain capable of demonstrating bad faith.</li>
</ul>
This strategy helped to secure, in separate civil trademark infringement cases, a Rmb5 million maximum statutory damages award and a Rmb10 million punitive damages award.
Together, those cases illustrate a practical enforcement pathway that is better suited to the infringement patterns increasingly seen in livestream commerce.&nbsp; They also show that, where rights holders can present a sufficiently robust and well-structured evidential record, Chinese courts are prepared to grant meaningful remedies in appropriate cases.
&nbsp;
<h2>Look beyond surface-level party structures and build a multi-party infringement case</h2>
Large-scale livestream infringement often follows a ‘multiple accounts, multiple stores, single controller’ model. On paper, several independent business entities appear to operate separately. In reality, the same team may control supply, operations and profit extraction across the network.
Rights holders should therefore consider moving beyond the traditional model of suing only the nominal operator of a single store or account. Instead, they may seek to identify hidden organisational links between stores, accounts and livestream rooms through cross-comparison of multiple factual indicators. These includes:
<ul>
<li>supply chains;&nbsp;</li>
<li>after-sales arrangements;&nbsp;</li>
<li>operator information;&nbsp;</li>
<li>product styles;&nbsp;</li>
<li>product markings;&nbsp;</li>
<li>naming conventions;&nbsp;</li>
<li>visual presentation of livestream rooms;&nbsp;</li>
<li>presenter scripts; and&nbsp;</li>
<li>operating schedules.</li>
</ul>
By systematically extracting and preserving common features across different infringing touchpoints, rights holders may be able to demonstrate operational unity.&nbsp; This type of evidence can:
<ul>
<li>support findings of co-ordinated infringement;</li>
<li>help to identify the actual controller behind formally separate entities; and</li>
<li>strengthen claims for joint and several liability.</li>
</ul>
It also enables the courts to look beyond formal separation created by business registration and address practical problems such as fragmented responsibility and continued infringement through replacement accounts.
&nbsp;
<h2>Filter and aggregate infringing sales data to quantify large-scale infringement</h2>
Because front-end evidence in livestream cases is highly fragmented, rights holders should consider a layered evidence strategy combining real-time notarised evidence capture, back-end data retrieval and systematic screening of infringing data based on common features of the infringing products. On the front end, monitor target livestream rooms continuously and store notarised recordings made across different time periods to capture key aspects of the stream, including:
<ul>
<li>product displays;&nbsp;</li>
<li>livestream set-up;&nbsp;</li>
<li>sales language; and&nbsp;</li>
<li>infringing claims.&nbsp;</li>
</ul>
This helps to preserve the real-time state of the infringement as it occurs. On the back end, rights holders should, pursuant to the applicable rules on civil evidence, consider applying for a court order requiring the platform to disclose operational data relating to the stores or accounts at issue, including:
<ul>
<li>the registration information of store or account owners;</li>
<li>transaction records;</li>
<li>order information; and</li>
<li>periods of operation.&nbsp;</li>
</ul>
Once obtained, such data may be combined with the batch identification and screening of common features of the infringing products to reconstruct, with substantially greater completeness, the infringer’s sustained, frequent and large-scale commercial activity.
Even where back-end data cannot be obtained through the court, rights holders may still, on the basis of the identified common features of the infringing listings, filter and aggregate infringing sales data reflected in front-end evidence across different stores or accounts.
This approach is particularly useful in rebutting common defence arguments that the conduct was isolated, accidental or minor.
More importantly, it provides a stronger factual basis for a court to assess the seriousness of the infringement and to consider higher statutory damages or, where the legal threshold is met, punitive damages.
&nbsp;
<h2>Demonstrate serious infringement and bad faith through a closed evidential chain</h2>
Under Chinese law, punitive damages require not only serious infringement, but also a sufficiently strong showing of subjective bad faith.
In one case handled by the author, the infringing party had previously been subject to administrative penalties for similar infringing conduct. It then sought to reduce further legal exposure by concealing the identity of the real controller and continuing the same activity through a newly established company, newly registered livestream accounts and newly operated stores nominally unrelated to the original infringer.
To address this structure, the case strategy focused on systematic comparison across the periods before and after the change of entities and accounts.
Key factors included the business model, livestream scenes, product-specific QR code markings, product style system and supply channels.&nbsp;
This made it possible to build a complete chain of associated evidence showing that, although the old and new entities were formally distinct, both were in fact controlled by the same person and the infringement was continuous, repeated and deliberately structured to avoid liability.
The court accepted this evidential framework, looked beyond the formal separation between the entities, imposed personal joint and several liability on the actual controller, and found repeated infringement, deliberate attempts to avoid liability and large-scale malicious conduct.
On that basis, the court applied punitive damages and awarded damages in the eight-figure range.
In another matter handled by the author, a complete evidential chain linking multiple entities was combined with targeted screening and analysis of front-end transaction data across different stores and accounts.
This demonstrated that the infringement was broad in scope, long in duration, large in transaction volume and highly profitable.
On that factual basis, the court awarded the maximum level of statutory damages available.
&nbsp;
<h2>Key takeaways for rights holders</h2>
The commercial structure of livestream e-commerce means that its infringement patterns and enforcement logic differ materially from those of traditional shelf-based e-commerce.
Instantaneity, concealment, organised operation and iterative re-emergence mean that conventional enforcement models may not always be sufficient on their own.
For rights holders, effective enforcement in the livestream context often requires a more penetrating, systematic and data-driven strategy.
By combining analysis of the infringing network, analysis of sales data and a closed evidential chain demonstrating bad faith, rights holders can materially improve their prospects of securing substantial damages while also targeting organised and recurring infringing activity at its source.
Recent cases also suggest that, within the existing legal framework, Chinese courts are willing to adopt a more penetrating analysis of livestream infringement structures and to grant stronger remedies where the evidence justifies it.
In this sense, stronger outcomes in livestream infringement cases depend not simply on more evidence, but on better-structured evidence and a more integrated enforcement approach.
&nbsp;
This article was first published in <a href="https://www.worldtrademarkreview.com/article/ip-enforcement-in-chinas-livestream-e-commerce-sector-practical-lessons-two-high-damages-cases">WTR</a> in August 2026.

IP enforcement in China’s livestream e-commerce sector: practical lessons from two high-damages cases

Sophia Hou

On June 1, 2026, the Provisions on the Protection of Trade Secrets (China’s State Administration for Market Regulation Order No. 126) officially came into force, marking a new stage in the development of China's administrative protection system for trade secrets. Based on a comprehensive review of recent judicial practice and administrative enforcement experience, the new regulations systematically improve the rules governing trade secret identification, confidentiality measures, infringement determination, administrative procedures, evidentiary standards, and legal liabilities. They further establish an integrated protection framework that combines prevention, supervision, and post-infringement remedies.
&nbsp;
<h2>Background of the New Regulations: Building a More Comprehensive Trade Secret Protection System</h2>
The former Provisions on Prohibiting Infringements of Trade Secrets, issued in 1995, played an important role during the early development of China's administrative trade secret protection regime. However, with the rapid growth of the digital economy, remote working arrangements, and cross-border collaboration, the old regulations could no longer effectively address the realities of the modern business environment.
The new Provisions on the Protection of Trade Secrets draw extensively from the Anti-Unfair Competition Law, judicial interpretations, and recent judicial practice. They systematically refine the standards for determining trade secrets, confidentiality measures, infringement acts, administrative procedures, evidentiary requirements, and penalties. As a result, the new regulations achieve better alignment among statutory law, judicial interpretations, and administrative rules, creating a comprehensive protection framework encompassing prevention before infringement, regulatory oversight during business operations, and remedies after infringement occurs.
&nbsp;
<h2>Key Highlight 1: Expanded Scope of Trade Secret Protection</h2>
One of the most significant changes introduced by the new regulations is the replacement of the requirement of "practical applicability" with "commercial value" as a constitutive element of trade secrets.
Unlike the previous approach, which emphasized the ability of a trade secret to generate direct economic benefits, the new regulations focus on the actual or potential value of the information itself. For example, failed experimental data, interim research results, and testing plans generated during the R&amp;D process may qualify as trade secrets even if they have not yet resulted in commercial products, provided they can reduce development costs, minimize trial-and-error expenses, or enhance future competitive advantages.
At the same time, the new rules further clarify the scope of technical information and business information, including algorithms, source code, customer information, operational data, financial information and sales strategies. This broadens the range of business information that may be protected as trade secrets.
&nbsp;
<h2>Key Highlight 2: Clearer Standards for Determining “Secrecy”</h2>
One of the fundamental prerequisites for trade secret protection is that the relevant information must be "unknown to the public."
The new regulations clarify that information will not be considered secret only if it is widely known within the relevant industry or readily accessible to professionals in the field. In other words, even where certain information can theoretically be obtained from public sources, if substantial time, cost, expertise, or analytical effort is required to collect, organize, and compile it, the resulting dataset or information combination may still qualify as a trade secret.
This standard further distinguishes trade secret protection from the novelty requirements applicable to patents and is better suited to safeguarding data assets in the digital economy.
&nbsp;
<h2>Key Highlight 3: More Specific Requirements for Confidentiality Measures</h2>
Trade secret protection depends not only on the nature of the information itself but also on whether a company has adopted reasonable and effective confidentiality measures.
For the first time, the new regulations systematically list a series of typical confidentiality measures, including:
<ul>
<li>Entering into confidentiality agreements and confidentiality clauses;</li>
<li>Establishing internal confidentiality policies and providing employee training;</li>
<li>Implementing access controls for confidential areas;</li>
<li>Adopting technical measures for remote work, such as access-level management and activity logs;</li>
<li>Classifying, encrypting, and restricting access to confidential documents;</li>
<li>Restricting copying, downloading, and storage of confidential information on devices; and</li>
<li>Establishing procedures for the return of trade secret materials and continuing confidentiality obligations upon employee departure.</li>
</ul>
These measures not only serve as important tools for internal corporate governance but also constitute critical evidence when establishing the existence of a trade secret in future enforcement or litigation proceedings.
&nbsp;
<h2>Key Highlight 4: Clearer Identification of Infringement in the Digital Era</h2>
As companies increasingly adopt digital workplace solutions, methods of trade secret misappropriation have become more diverse and sophisticated.
To address controversies frequently encountered in practice, the new regulations expressly provide that downloading an employer's trade secrets to a personal email account, private cloud storage, or personal storage device without authorization constitutes obtaining trade secrets through improper means, even if the conduct occurs before an employee resigns.
In addition, unauthorized access to a company's servers, email systems, cloud platforms, or office&nbsp;management systems for the purpose of obtaining trade secrets is expressly recognized as an infringement. These provisions directly respond to emerging risks faced by companies in today's digital working environment.
&nbsp;
<h2>Corporate Risk Management: Establishing a Trade Secret Management System</h2>
The greatest value of the new regulations lies not only in providing stronger legal grounds for enforcement but also in encouraging companies to establish systematic trade secret management mechanisms and shift their focus from post-infringement remedies to prevention-oriented protection.
<ol>
<li>At present, companies generally face two categories of risk: Leakage or misappropriation of their own trade secrets; and</li>
<li>Potential liability arising from the misappropriation of others' trade secrets during business operations.</li>
</ol>
To address the first category of risk, companies should focus particularly on electronic information leakage, unauthorized disclosure by employees, and remote-work access management. According to judicial practice, more than 80% of trade secret leakages involve current or former employees, making lifecycle employee management especially important.
When building a trade secret management system, companies should follow the following principles:
<ul>
<li>top-level management: making trade secret protection a priority led by senior management</li>
<li>minimum access: allowing only those personnel who genuinely need access to confidential information</li>
<li>precision management: ensuring accurate classification, management and supervision of confidential information</li>
<li>full-process management: covering all stages including research and development, circulation, use and employee departure</li>
</ul>
At the same time, companies should conduct an inventory of trade secret assets and establish a trade secret register to record confidential points, classification levels and the scope of persons with knowledge of the information. They should also improve non-disclosure agreements, remote working access controls, the management of confidential devices and mechanisms for the return of trade secrets by departing employees. In addition, companies should establish emergency response plans for infringement and make advance preparations for evidence preservation and for administrative, civil and criminal enforcement.
&nbsp;
<h2>Choosing the Appropriate Enforcement Strategy</h2>
When faced with trade secret infringement, companies should choose among administrative, civil or criminal remedies based on the seriousness of the infringement, the evidential foundation and their own enforcement objectives.
Where the subject matter of the trade secret is relatively clear, confidentiality measures are relatively well established and infringement leads are comparatively clear, administrative protection offers advantages such as efficient investigation and prompt cessation of infringement, and may be prioritised as part of the company’s enforcement strategy.
At the same time, the new regulations do not prevent the simultaneous use of administrative and civil remedies. Companies may pursue civil litigation to seek monetary damages while also filing administrative complaints with market regulation authorities to investigate and penalize infringing conduct. This coordinated, multi-channel approach can significantly enhance overall enforcement effectiveness.
&nbsp;
<h2>Conclusion</h2>
With the formal implementation of the Provisions on the Protection of Trade Secrets, China's trade secret protection framework has become more comprehensive, marking a new era of greater standardization and sophistication in corporate trade secret management.
For companies, trade secret protection is no longer merely a legal remedy after information has been leaked. It has become a critical management function that permeates the entire business lifecycle, including research and development, manufacturing, supply chain management, sales, and cross-border cooperation. Only by proactively identifying trade secrets, implementing classification-based management, adopting effective confidentiality measures, and preserving evidence can companies truly achieve prevention before infringement, control during operations, and effective enforcement after infringement, thereby strengthening their core competitiveness and providing a solid legal foundation for sustainable, high-quality development.

China’s New Regulation on the Protection of Trade Secrets: How Companies Can Build a Trade Secret Protection System

Carol Wang

On 20 June, during the market events of the 28th Shanghai International Film Festival, Lusheng Law Firm, together with its strategic partner Rouse, jointly released for the fourth consecutive year the industry IP report entitled “Research Report on the Development and Protection of Intellectual Property in China’s Film and Television Industry (2025)”.
The press conference was jointly presented by Wang Shan, Director of Lusheng’s Shanghai Office and Co-head of the Entertainment Law and Dispute Resolution Practice, and Tian Yanyang, Head of Research, Greater China, at Rouse, who provided an in-depth analysis of trends in IP protection in the film and television sector. The report has attracted extensive attention from the film and television industry both in China and abroad.
&nbsp;
<h2>Highlights of the Press Conference</h2>
<img src="https://media.umbraco.io/lusheng/s20p1nq4/blob.jpg?mode=max&amp;anchor=&amp;width=1080&amp;height=720" alt="" width="1080" height="720">
Wang Shan
Director of Lusheng’s Shanghai Office
Co-head of the Entertainment Law and Dispute Resolution Practice
&nbsp;
<img src="https://media.umbraco.io/lusheng/nk4l0wnv/blob.jpg?mode=max&amp;anchor=&amp;width=1080&amp;height=720" alt="" width="1080" height="720">
Tian Yanyang
Head of Research, Greater China, Rouse
&nbsp;
At the press conference, Attorney Wang Shan and Ms. Tian Yanyang shared in depth the latest research findings and cutting-edge issues from the “Research Report on the Development and Protection of Intellectual Property in China’s Film and Television Industry (2025)”, and discussed the following key points:
In 2025, China’s box office reached RMB 51.832 billion, representing a year-on-year increase of 22% and ranking second globally. Domestic films accounted for nearly 80% of the box office, and animated films experienced explosive growth.
During the same period, the number of copyright registrations and the proportion of registrations for film and television works remained generally stable. In 2025, the total number of registrations nationwide reached the tens of millions (10,677,043 works); registrations for film and television works reached 134,000.
&nbsp;
<h2>Robust Growth in the Licensed Consumption Market</h2>
From 2019 to 2024, the value added of China’s copyright industry increased from RMB 7.32 trillion to RMB 10.06 trillion, with its share of GDP steadily rising to 7.46%.
In 2025, the IP licensing industry exhibited three new characteristics: “legacy IPs” such as “The Most Beautiful Journey to the West” achieved cross-community dissemination through “new operations”; designer toy IPs saw explosive performance growth with AIGC technology embedded throughout the entire value chain; and the park economy represented by Fantawild Holdings evolved from “theme parks” to “lifestyle” destinations.
&nbsp;
<h2>Explosive Growth of the AI Comic-Drama Industry, with Copyright Compliance and Governance as the Key to Breakthrough</h2>
The AI comic-drama sector entered a period of rapid growth in the second half of 2025—by Q1 2026, total views were approaching 130 billion, with a month-on-month increase of 78.9% in March. The depth of market penetration and the explosive power of traffic in this track are remarkable, while various types of infringement, such as unauthorized adaptations or “pixel-level copying”, have become increasingly prominent.
At the regulatory level, “AI comic-dramas” have been brought within the scope of micro-short dramas in animated forms such as AIGC and comics. In 2025, the National Radio and Television Administration raised investment thresholds and optimized review authority; the Cyberspace Administration launched the “Clean and Bright” special campaign to address issues such as AI “magic alteration” and “digital swill”; and platforms established filtering mechanisms and centralized clean-up mechanisms.
&nbsp;
<h2>Legal Protection of Actors’ Digital Assets and Virtual Likenesses</h2>
The core issue lies in the reconstruction of the boundaries between personality rights and property rights—biometric features such as real persons’ facial characteristics, vocal qualities, and body movements are extracted, modeled, and commercialized.
Certain existing international cases provide references for mechanisms such as posthumous authorization and dual authorization. Under the domestic legislative framework, the Administrative Measures for Digital Virtual Human Information Services (Draft for Comments) plan for the first time to establish unified governance of virtual digital human issues, while in judicial practice there are corresponding cases concerning portrait rights, voice-related rights and interests, and general personality rights.
&nbsp;
<h2>Chinese IP Going Global: From “Going Out” to “Going In”</h2>
In 2025, overseas revenue from games exceeded USD 20.4 billion, surpassing RMB 100 billion for six consecutive years. Chinese games going global are shifting from “product export” to “cultural IP export”. The trend of designer toy IPs, represented by POP MART, being “driven by overseas markets” has become increasingly evident. As for micro-short dramas going overseas, their “localization” essentially represents a leap in IP development logic from “content export” to “localized IP incubation”.
The success of IP going global is half commercial strategy and half intellectual property deployment. Right holders need to adopt multi-layered protection strategies: strengthening copyright registration, trademark applications, and customs recordals in destination countries; enhancing monitoring on e-commerce platforms and cooperating with local law enforcement authorities; employing technologies such as digital watermarking and blockchain for traceability and anti-counterfeiting; and at the same time implementing targeted deployment and responses based on different categories.
&nbsp;
<h2>Continued and Significant Effectiveness of the “Dual-Track Protection” of Administrative and Judicial Enforcement</h2>
A series of new laws and regulations in 2025 increased the amount of damages for IP infringement and the application of punitive damages, and also enhanced the standardization of administrative enforcement, particularly as the regulatory system for labeling AI-generated synthetic content has been gradually improved.
Administrative protection of intellectual property in China’s film and television industry has continued the “online + offline” coordinated governance model. Through the ongoing deepening of special campaigns such as “Sword Net 2025” and “Sword Shadow 2026”, the improvement of multi-agency coordinated governance mechanisms, and the precise empowerment of technological means, a three-dimensional protection system covering both online and offline and both domestic and overseas has been established.
In the judicial field, several high-compensation cases have arisen from disputes between long-form and short-form videos. For example, in August 2025, the Guangdong High People’s Court applied punitive damages in the short video infringement case involving “The Irresistible”, ordering a certain platform to pay RMB 60 million in damages; in the same month, the Chongqing High People’s Court applied one-time punitive damages in the case involving infringing clip videos of “Lost You Forever” on a certain platform, with damages approaching RMB 30 million.
At the same time, forms of copyright infringement in AI-related film and television works have become increasingly diverse. Many platforms, under the combined impetus of judicial and regulatory forces, have established relatively sound filtering and copyright complaint mechanisms, and cases in which exemption from liability is granted based on the “safe harbor principle” are on the rise.
Attorney Wang also analyzed, with reference to several current high-profile cases, IP protection and litigation strategies that take into account public opinion and other factors in a comprehensive manner.
<img src="https://media.umbraco.io/lusheng/4fpd42e1/image.png?mode=max&amp;anchor=&amp;width=774&amp;height=518" alt="" width="774" height="518">
Photos from the event
&nbsp;
<h2 style="text-align: center;">Report Request</h2>
The report has been made available on online platforms during the Shanghai International Film Festival
Please scan the code to obtain the full electronic version
*This material is only sent to corporate personnel, thank you for your understanding
<img src="https://media.umbraco.io/lusheng/j20nhenx/image.png?mode=max&amp;anchor=&amp;width=815&amp;height=594" alt="" width="815" height="594">
&nbsp;
<h2>Lusheng’s Entertainment Law Services</h2>
Lusheng’s entertainment law services cover the entire life cycle of cultural and entertainment film and television brands, from IP creation and incubation, IP release and promotion, and IP derivatives and development, to IP protection and enforcement.
<img src="https://media.umbraco.io/lusheng/dlkog023/640-7.webp?mode=max&amp;anchor=&amp;width=998&amp;height=454" alt="" width="684" height="311">
We are committed to helping clients avoid intellectual property risks at all stages of film and television entertainment projects, including contractual and infringement risks arising from project initiation and development, filming and production, publicity and distribution, and subsequent value realization. We strive to provide comprehensive IP protection for film and television entertainment projects and to maximize the commercial value of IP.
At the same time, Lusheng has achieved remarkable results in handling pioneering and complex cases with significant impact. More than 140 related cases handled by the firm have been selected as typical cases by courts, procuratorates, and other professional institutions at various levels.
&nbsp;
<h2>Rouse Speaker</h2>
Tian Yanyang
Head of Research, Greater China
Rouse
Email:&nbsp;atian@rouse.com
&nbsp;

Lusheng issues China Film & TV IP Report at SIFF, interpreting the 2025 phenomenon

Terry Lu

On 15 May 2026, the National Medical Products Administration of the People’s Republic of China (NMPA) issued Announcement No. 47 of 2026, whereby the Measures for the Implementation of Drug Trial Data Protection (the “Implementation Measures”) officially came into effect[1]. This signifies the formal establishment and implementation of the drug trial data protection regime in China. This data protection regime covers chemical drugs and biological products, and grants different protection periods and scopes based on the degree of drug innovation, thereby comprehensively incentivizing the development of innovative drugs while taking into account the interests of generic drugs. The key points of the Implementation Measures are summarized as follows.
1. The subject matter of data protection is undisclosed trial data and other data independently obtained by the applicant. Such trial data shall be unpublished, complete registration data that are used for the first time within the territory of China for a drug marketing authorization application.
2. Different protection periods and scopes are granted for different categories of drug marketing authorization applications. Specifically:
<ul class="list-paddingleft-1">
<li>
For innovative drugs and original research drugs that have been marketed overseas but not yet marketed domestically (including chemical drugs, vaccines and therapeutic biological products) that are applying for marketing authorization for the first time within the territory of China, a 6‑year data protection period shall be granted, and the scope of protection shall cover all trial data in the marketing authorization dossier used to demonstrate the safety, efficacy and quality controllability of the drug.
</li>
<li>
For original research drugs (including chemical drugs and therapeutic biological products) that have been marketed overseas but not yet marketed domestically, where a new indication that has not been approved either domestically or overseas is submitted for the first time, a 6‑year data protection period may be obtained; however, where other indications have already been approved earlier or additional new indications are subsequently added, only a 4‑year protection period shall be granted. The scope of protection is limited to the clinical trial data supporting the marketing of the new indication.
</li>
<li>
For improved drugs (including chemical drugs, vaccines and therapeutic biological products), a 4‑year data protection period shall be granted, and the scope of data protection shall include only new clinical trial data that demonstrate an obvious clinical advantage compared with known active ingredients (marketed biological products), excluding bioavailability, bioequivalence and immunogenicity data of vaccines.
</li>
<li>
For generic drugs and biological products of the first approved original research drug that has been marketed overseas but not yet marketed domestically, a 3‑year data protection period shall be granted, and the scope of protection shall include only the necessary clinical trial data supporting the approval, excluding bioavailability, bioequivalence and immunogenicity data of vaccines.
</li>
</ul>
3. During the data protection period, where another marketing authorization applicant relies on the protected trial data to submit a marketing authorization application without the permission of the right holder, the NMPA shall not grant approval. For trial data of innovative/original research drugs, applications for improved new drugs, chemical generics and biosimilars shall all be refused approval; for trial data of other types of drugs, only chemical generics and biosimilars that rely on such trial data shall be refused approval.
4. Applications for trial data protection shall be submitted concurrently with the drug marketing authorization application. For drug registration applications that were submitted prior to 15 May but have not yet completed the review process, an application for drug trial data protection shall be submitted within 15 days; failure to submit within the time limit shall be deemed a waiver of drug trial data protection.
5. The Center for Drug Evaluation of the NMPA shall be responsible for the technical review of data protection, determining the scope and duration of data protection to be granted, and publishing relevant information on data protection.
6. Within one year prior to the expiry of the data protection period, a drug marketing authorization application relying on such trial data may be submitted, and upon completion of the technical review, the relevant drug shall be approved for marketing after the expiry of the data protection period.
The implementation of the drug trial data protection regime undoubtedly provides more comprehensive protection and a longer period of market exclusivity for innovative drugs in addition to the patent protection regime, thereby attracting more breakthrough and clinically superior innovative drugs into the Chinese market and providing Chinese patients with a broader range of therapeutic options. At the same time, it also encourages the earliest possible market entry of first generics, which can likewise enjoy a certain period of market exclusivity, thereby increasing the accessibility of blockbuster drugs and achieving a balanced and mutually reinforcing environment for both generics and innovation, fostering a prosperous market where both can advance in parallel.

China’s drug trial data protection regime is now formally in force.

Mi Li

Jensen Li

Recently, the report entitled “China’s Clean Energy Innovation Landscape”, jointly authored by Lu Sheng Patent Director Li Mi and Patent Attorney Li Hai, was officially published in the first 2026 special issue of the internationally renowned IP media IAM.
The special research report “Power Moves” focuses on global intellectual property deployment and industrial development trends in the field of clean energy. This special research project was initiated and led by IAM, which invited IP professionals from around the world in the clean energy sector to contribute in a coordinated manner, thereby producing a comprehensive research outcome covering the entire industrial value chain.
Lu Sheng Patent Director Li Mi and Patent Attorney Li Hai were also invited to participate and were responsible for drafting the China chapter.
This special report further sorts out and summarizes, and provides a complete depiction of the four major stages in the evolution of China’s clean energy policies and industry development, offering a clear analysis of how policy orientations and institutional changes at each stage have continuously empowered the iteration of domestic clean energy technologies, patent innovation, and the prosperous development of the industry.
&nbsp;
For further details, please visit the following link to access the full report:
<a href="https://www.iam-media.com/article/the-policy-shifts-behind-chinas-green-energy-revolution">https://www.iam-media.com/article/the-policy-shifts-behind-chinas-green-energy-revolution</a>

Lusheng Patent Director Li Mi and agent Li Hai join IAM report on China’s clean energy shift

Landy Jiang

China’s new patent examination guidelines aim to foster AI innovation

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China’s new patent examination guidelines aim to foster AI innovation

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