China Business Update: China’s Evolving Legal Landscape for Trade Secret Protection


2013 will be remembered as a watershed year for trade secret protection in China.

In January 2013, China’s Amended Civil Procedure Law came into force, giving courts discretion to issue interlocutory injunctions (1) whenever there is a risk that a party’s conduct will make judgment more difficult to enforce or (2) to prevent the petitioner from suffering “irreparable damage.” Previously, courts in China would more often than not claim that, prior to commencement of formal proceedings, they had no authority to issue injunctions to stop infringement of trade secrets.

Within months, multinationals with trade secrets and operations in China began using the new civil procedure rules to obtain preliminary injunctions. On August 2, 2013, Eli Lilly & Co. and its Chinese subsidiary were granted an interlocutory injunction over a former employee who had downloaded confidential documents and then resigned. Eli Lilly was able to show that (1) the documents contained trade secrets, (2) the employee had wrongfully downloaded them, and (3) subsequent disclosure or use of the documents would result in significant losses for Eli Lilly.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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