TRADE SECRETS: US China Economic And Trade Agreement 2020
China shall define “operators” in trade secret misappropriation to include all natural persons, groups of persons, and legal persons.
China shall enumerate additional acts constituting trade secret misappropriation including electronic intrusions; breach or inducement of a breach of duty not to disclose information that is secret or intended to be kept secret; and unauthorized disclosure or use that occurs after the acquisition of the trade secret under circumstances giving rise to a duty to protect the trade secret from disclosure or to limit the use of the trade secret.
The Parties (both US and China) shall provide that the burden of production of evidence or burden of proof, as appropriate, shifts to the accused party in a civil proceeding for trade secret misappropriation where the holder of the trade secret has produced prima facie evidence, including circumstantial evidence, of a reasonable indication of trade secret misappropriation by the accused party.
Once a holder of a trade secret produces (i) evidence that the accused party had access or opportunity to obtain a trade secret and the information used by the accused party is materially the same as the trade secret; or (ii) evidence that a trade secret has been or risks being disclosed or used by the accused party; or (iii) other evidence that its trade secret(s) were misappropriated by the accused party–AND the right holder provides preliminary evidence that measures were taken to keep the claimed secret confidential–the burden of proof or burden of production of evidence, as appropriate. shifts to the accused party to show that a trade secret identified by a holder is generally known among persons within the circles that normally deal with the kind of information in question or is readily accessible and therefore is NOT a trade secret.
China shall identify the use or attempted use of claimed trade secret information as an “urgent situation” that provides its judicial authorities the authority to order the grant of a preliminary injunction based on the specific facts and circumstances of a case.
China shall eliminate any requirement that the holder of a trade secret establish actual losses as a prerequisite to initiation of a criminal investigation for misappropriation of a trade secret.
China’s criminal procedures and penalties shall at least encompass cases of trade secret misappropriation though theft, fraud, physical or electronic intrusion for an unlawful purpose AND the unauthorized or improper use of a computer system in the scope of prohibited acts.
China shall prohibit the unauthorized disclosure of undisclosed information, trade secrets, or confidential business information by government personnel or third party experts or advisors in any criminal, civil, administrative, or regulatory proceedings conduct at either “the central or sub-central” levels of government in which such information is submitted.
China shall require administrative agencies and other authorities at all levels to:
limit requests for information to no more than necessary for the legitimate exercise of investigative or regulatory authority;
limit access to submitted information to only government personnel necessary for the exercise of legitimate investigative or regulatory functions;
ensure the security and protection of submitted information;
ensure that no third party experts or advisors who compete with the submitter of the information or have any actual or likely financial interest in the result of the investigative or regulatory process have access to such information;
establish a process for persons seeking an exemption from disclosure and a mechanism for challenging disclosures to third parties; and
provide criminal, civil, and administrative penalties, including monetary fines, the suspension or termination of employment, and, as part of the final measures amending the relevant laws, imprisonment, for the unauthorized disclosure of a trade secret or confidential business information that shall deter such unauthorized disclosure.
R. Mark Halligan, Partner, FisherBroyles, LLP rmarkhalligan@fisherbroyles.com
Adjunct Faculty UIC John Marshall Law School Chicago Trade Secrets
