Authored by:GORDON GAO and Gary Song
Trade secret litigation in China has entered a period of exponential growth, largely driven by a vibrant wave of entrepreneurship, rapid development in high-tech sectors, and the transition toward digital and remote work environments. Statistics indicate a vast majority of such disputes were triggered by employee departures. In 2024, the Supreme People’s Court (“SPC”) awarded a landmark RMB 640 million in damages including punitive damages in a trade secret case involving nearly forty management staff and technical specialists left the plaintiff for the defendant. Industrial manufacturing process, data, drawings, and formulations, business customer lists and profiles, have been found protectable as trade secrets and enforced against departing employees and new employers. Right owners now may find it easier to plead misappropriation cases since the burden of proof is lessened by the amendment of the Anti-Unfair Competition Law (“AUCL”) in 2019. However, navigating the defenses raised by departing employees and their new employers remains a complex challenge. By studying recent decisions, this article clarifies evolving legal standards and offers practical advice in protecting trade secrets during employee departures.

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