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.
Background of the New Regulations: Building a More Comprehensive Trade Secret Protection System
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.
Key Highlight 1: Expanded Scope of Trade Secret Protection
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&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.
Key Highlight 2: Clearer Standards for Determining “Secrecy”
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.
Key Highlight 3: More Specific Requirements for Confidentiality Measures
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:
- Entering into confidentiality agreements and confidentiality clauses;
- Establishing internal confidentiality policies and providing employee training;
- Implementing access controls for confidential areas;
- Adopting technical measures for remote work, such as access-level management and activity logs;
- Classifying, encrypting, and restricting access to confidential documents;
- Restricting copying, downloading, and storage of confidential information on devices; and
- Establishing procedures for the return of trade secret materials and continuing confidentiality obligations upon employee departure.
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.
Key Highlight 4: Clearer Identification of Infringement in the Digital Era
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 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.
Corporate Risk Management: Establishing a Trade Secret Management System
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.
- At present, companies generally face two categories of risk:
Leakage or misappropriation of their own trade secrets; and - Potential liability arising from the misappropriation of others' trade secrets during business operations.
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:
- top-level management: making trade secret protection a priority led by senior management
- minimum access: allowing only those personnel who genuinely need access to confidential information
- precision management: ensuring accurate classification, management and supervision of confidential information
- full-process management: covering all stages including research and development, circulation, use and employee departure
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.
Choosing the Appropriate Enforcement Strategy
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.
Conclusion
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.
