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Beijing IP Court releases 10 typical cases of infringement of trade secrets #9

On November 30th, the Beijing Intellectual Property Court held a press conference to release the ten typical cases of infringement of trade secrets. These cases are significant in clarifying the judicial thinking and rules for handling trade secret infringement cases, enhancing awareness of self-protection and compliance for businesses, and fostering a favorable atmosphere in society that respects and protects trade secrets. We will provide a complete translation of the case details and analysis text released by the Beijing Intellectual Property Court as follows:



Case 9

"Identity Deception" by Former Employer's Affiliate Infringement of Trade Secrets Dispute


Xie, was formerly an employee of a certain technology limited company (referred to as Company A), responsible for promoting the "Dazhong Dianping" product. In April 2018, Xie informed Company A that “Dazhong Dianping” decided to stop the plan to cease the related promotion of "Dazhong Dianping," leading to the termination of cooperation between Company A and "Dazhong Dianping." In June 2018, Xie left Company A.

 

Later, Company A discovered that Chen, the legal representative of a certain technology (Beijing) limited company (referred to as Company B), had a friendship with Xie, and Company B was actually jointly operated by Xie and Chen. After April 2018, Xie continued to enter into contracts on the "Dazhong Dianping" project with Company B, which he regarded as an affiliate of Company A, to promote the "Dazhong Dianping" product. Company A believed that Xie and Company B had disclosed and used specific customer information of Company A, thereby infringing on their trade secrets. As a result, Company A filed a lawsuit requesting the court to order Xie and Company B to stop the infringement of trade secrets, eliminate the impact, and jointly compensate for economic losses of CNY 6.37 million and reasonable expenses of CNY 50,000.


 


trade secret protection, employees


After the first-instance court trial, it was determined that Xie had disclosed Company A's trade secrets to Company B during Xie’s tenure and had jointly used them. Company B was aware of Xie's identity and began using the disclosed trade secrets while Xie was still employed by Company A. Both parties jointly infringed on Company A's trade secrets. Therefore, the first-instance court ordered Xie and Company B to cease the infringement of trade secrets, eliminate the impact, and jointly compensate Company A with CNY 3.5 million for economic losses and CNY 50,000 for reasonable expenses.

Xie was dissatisfied with the first-instance judgment and appealed to the Beijing Intellectual Property Court. The second-instance court upheld the original judgment and rejected the appeal.


Key Points of the Judgment


The Company A, argued that the contract contents, the contact person for the "Dazhong Dianping" platform, and the channels for cooperation with the platform's customers constitute trade secrets. Company B's cooperation with the "Dazhong Dianping" platform for mobile client application promotion was based on information obtained through Xie's knowledge and use of Company A's cooperation with the platform. As the active contracting party, Company B registered Xie as the contact person and approved the contract under the name "Xinguo," and it could not be unaware of Xie's identity or the fact that the operational information used belonged to Company A's trade secrets.  Xie, as a former employee, used the signing information and channels at his disposal to change the contracting party that had originally been contracted in the name of Company A to the competitor, Company B. XIe deceived Company A into believing that the cooperation had already terminated, causing a loss of Company A's interests, thereby constituting an infringement of Company A's trade secrets.

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