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

Wendy Chen

Limited budget vs unlimited infringement: pyramid management for efficient anti-counterfeiting

New rules on administrative protection of trade secrets: interpretation of the Regulation

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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