Case summary
Lusheng has secured a favourable judgment for a leading technology company (the ‘plaintiff’) in a technical trade secrets infringement dispute involving a former senior R&D employee and his subsequent employer. The court found that the defendants had misappropriated the plaintiff’s technical secrets, ordered them to cease the infringing acts, and awarded RMB 1 million in compensation.
The plaintiff had invested significant resources in developing a proprietary technical solution for a component product. The dispute centred on nine categories of confidential technical information, including technical parameters and design data developed through repeated testing and calculation, which were critical to achieving the required product performance.
After leaving the plaintiff, the former employee joined a competitor, which shortly afterwards launched and sold competing component products with structures, dimensions and tolerances substantially consistent with the plaintiff’s confidential technical information. The plaintiff brought proceedings against both the former employee and his new employer.
The defendants argued that the information did not constitute protectable technical secrets. In particular, they contended that the relevant products had already been publicly circulated, that the claimed features could be obtained through visual observation or simple measurement, that the plaintiff had not adopted effective confidentiality measures, and that the former employee had not accessed the relevant materials.
Lusheng’s Approach in Framing the Trade Secret Claim
1.Public sale did not negate confidentiality
Lusheng framed the case around the protectability of the plaintiff’s technical information as a confidential technical solution, rather than a dispute over visible product features. The team argued that the public sale of the finished products did not mean that the complete combination of technical parameters, design data and tolerances had entered the public domain. The court accepted this position, holding that the claimed technical information could not be fully derived from publicly available products and therefore constituted protectable technical secrets.
2.Establishing reasonable confidentiality measures
Lusheng also focused on demonstrating that the plaintiff had taken practical and reasonable steps to protect the information before the infringement occurred. The relevant technical information was recorded in drawings marked with ownership information and dates, and employees with access to such materials had signed confidentiality agreements defining the scope of confidential information and their corresponding obligations.
The court found that these measures were sufficient to demonstrate the plaintiff’s intention to maintain confidentiality and were capable of preventing disclosure under normal circumstances.
3.Proving access and lack of lawful source
To establish infringement, Lusheng relied on evidence showing that the former employee had access to the plaintiff’s confidential technical information during his employment. Internal email records showed that he had received project drawings and 3D model files containing the relevant confidential materials.
The defendants failed to provide evidence showing that the accused products were independently developed or otherwise derived from a legitimate technical source.
Accordingly, the court held both defendants jointly liable for trade secrets infringement. It ordered them to immediately cease the infringing acts and, taking into account the plaintiff’s R&D investment, the scale of infringement and reasonable enforcement expenses, awarded total damages of RMB 1 million.
Key Points from the Judgment
The judgment shows that core design parameters and technical combinations may remain confidential even where the finished product has entered the market and certain features are externally visible, provided that the specific combination of information cannot be fully derived from public materials.
The court’s reasoning also highlights the evidential value of clear and documented confidentiality measures, including marked technical drawings, confidentiality agreements, controlled access to technical materials and records showing which employees had access to sensitive R&D information.
The case further illustrates the importance of proving both access to the confidential information and the absence of a lawful technical source for the accused products when establishing trade secrets infringement involving former employees and competing businesses.
