Against the backdrop of accelerated development of new quality productive forces and technological innovation as the core competitiveness of enterprises, trade secrets, as the most valuable intangible assets of enterprises, have seen continuously strengthened judicial protection and increasingly refined adjudication rules. In 2025, the Intellectual Property Tribunal of the Supreme People’s Court concluded 51 trade secret cases. Through adjudication of typical cases, while continuously clarifying legal rules, it has significantly increased the liability for infringement damages, demonstrating the judiciary’s firm stance in curbing technology secret infringement and protecting innovation achievements. This article, taking the Supreme People’s Court’s Annual Report on Intellectual Property Tribunal (2025) and several typical adjudication documents on trade secret infringement disputes as research samples, systematically sorts out and analyzes seven core trends and their inherent logic in current judicial adjudication practice of trade secrets, aiming to provide professional reference and operational guidance for enterprise trade secret compliance management, rights enforcement strategy formulation, and legal practitioners.

I. Expansion of Protection Scope: From Discrete Secret Points to Systematic Protection, with Emphasis on Carrier Limitation of Rights Boundaries

Traditional judicial protection of trade secrets mostly focused on the identification of individual technical information points (secret points). Current adjudication practice shows a clear trend toward systematic protection, i.e., shifting from protecting scattered secret points to protecting overall technical solutions and systematic technical information databases, while adhering to the carrier as the basis to reasonably define the scope of rights and prevent abuse of rights.

On one hand, establishing the principle of overall protection, rejecting the defensive logic of “denying secrecy through fragmentary combination.”

In the “Natural Protease 3” case ((2023) Supreme People’s Court IP Civil Final No. 2913), the Supreme People’s Court explicitly pointed out that even if part of the information in a technical secret is publicly known, the secrecy of the overall technical solution must still be considered; it is impermissible to deny the non-public nature of the complete technical solution by splicing fragmented information from different sources. In this case, the technical secret in question was a complete production process formed through the rights holder’s repeated experiments and continuous optimization, covering core content such as specific operational steps, reagent quantities, and parameter choices. Even if the basic method for isolating and purifying PR3 was known in the industry, its overall operational system still constituted a technical secret protected by law. In the “Glass Machine” case ((2023) Supreme People’s Court IP Civil Final No. 2039), the court further established the principle of “overall database” protection, protecting the 37,340 technical drawings and documents claimed by the rights holder as a complete technical information database, breaking the traditional model of “individual identification of each secret point.” It clarified that even if individual drawing information might be public, the overall system formed by the integration of process details, parameter combinations, etc., remains protected by trade secret law.

On the other hand, adhering to “carrier centrism,” reasonably limiting the scope of protection, and preventing abuse of rights.

In the “Quartz Glass Fiber” case ((2023) Supreme People’s Court IP Civil Final No. 2467), the court clarified that “the technical secret claimed by the rights holder must be supported by the carrier,” and carefully examined the “parameter range” claimed by the rights holder. In the absence of evidence that the endpoint values of the range could be directly derived from the carrier, only the specific “point values” recorded in the carrier were included in the scope of protection. This fully respected the legitimate claims of the rights holder while effectively avoiding excessive expansion of the protection boundary. Meanwhile, in case ((2023) Supreme People’s Court IP Civil Final No. 655), the court explicitly rejected the defendant’s defense of denying secrecy through “combined comparison” (i.e., splicing multiple documents to form a technical solution), further refining the adjudication rules for secrecy determination.

II. Precise Identification of Infringing Acts: Clarifying Multiple Forms of Joint Infringement, Penetrating Subject Boundaries and Liability Allocation

Currently, trade secret infringement acts exhibit distinct characteristics of “team-based, covert, and chain-like.” In adjudication practice, courts are increasingly precise in identifying joint infringement, breaking the traditional concept of “single-subject infringement,” penetrating the corporate veil, and strengthening the tracing of liability for multi-subject and multi-link infringements, achieving a full-chain strike against infringement acts.

First, clarifying the multiple manifestations of joint infringement.

Direct infringement, inducement of infringement, and contributory infringement are all included within the scope of regulation. In case ((2023) Supreme People’s Court IP Civil Final No. 1228), the court clarified that technical secret infringement includes not only direct infringing acts such as acquisition, disclosure, and use personally carried out by the actor, but also indirect acts such as inducing or luring others to commit infringement, as well as contributory acts providing necessary cooperation for infringement. In this case, Liu XX induced the original designer to disclose the technical secret, Company Shang used the technical secret, and Company Mu violated its confidentiality obligation by providing drawings and assistance. Although these three parties were at different links of the infringement chain, they shared joint fault and were found to constitute joint infringement, bearing joint and several liability. It was also clarified that even if the contract between Company Mu and the rights holder had been performed, Company Mu still had to fulfill post-contractual confidentiality obligations; its contributory infringement had already constituted illegality, filling a gap in adjudication on confidentiality liability after contract termination.

Second, piercing the corporate veil to pursue individual liability.

In case ((2023) Supreme People’s Court IP Civil Final No. 2467), the court reversed the first-instance finding of “separate infringement,” clarifying that Optoelectronics Technology Company was a “tool company” established by Chen XX and Xiao XX for the purpose of committing infringement. Chen XX (source leaker) and Xiao XX (actual controller of the company) acted with subjective consensus and objective coordination with the company, constituting joint infringement, and ordered the three to bear joint and several liability. This adjudication approach effectively combats covert infringements such as “hidden shareholding and shell company operations,” strengthening the accountability of core infringing personnel.

Third, defining the nature of infringement by “team poaching + technology misappropriation.”

In case ((2023) Supreme People’s Court IP Civil Final No. 655), multiple defendants had all previously worked for the rights holder. After leaving, they jointly established a new company, using technical secrets acquired during their previous employment to apply for patents and participate in bidding. The court found that although the defendants held different positions, under the common intent of “team poaching and technology misappropriation,” they all had the possibility of accessing the technical secrets and could not prove that the technology they used had a lawful source, thus constituting joint infringement. The court also determined the scope of joint and several liability based on the role of each subject in the infringement, achieving precise allocation of liability.

III. Optimization of Burden of Proof: Active Application of Burden Shifting Rules and Strict Sanctions Against Obstruction of Evidence

In trade secret infringement cases, the difficulty and high cost of proof for the rights holder are long-standing prominent pain points. In current adjudication practice, courts strictly apply Article 32 of the Anti-Unfair Competition Law, optimize the allocation of burden of proof, flexibly use rules of experience and rules on obstruction of evidence, reasonably reduce the rights holder’s burden of proof, and achieve an organic balance between “he who asserts must prove” and “shifting the burden of proof.”

On one hand, reasonably shifting the burden of proof.

After the rights holder completes its preliminary burden, the burden of proof is legally shifted to the infringer. In the case involving artificial intelligence and algorithm technical secrets ((2023) Supreme People’s Court IP Civil Final No. 1503), the court clarified that the rights holder only needs to prove that “it owns a lawful technical secret, the infringer has the possibility of accessing the technical secret, and the technologies of both parties are substantially similar” to complete its preliminary burden. At that point, the burden shifts to the infringer to prove that the technology it used has a lawful source. In this case, the rights holder submitted evidence showing that the core personnel of the infringer had all participated in the technical project in question, the infringer’s product functionalities were highly consistent with those of the rights holder’s product, and the infringer could not have independently completed the relevant technology within a short period. The court found that the rights holder had completed its preliminary burden. The infringer failed to prove the reasonableness of its integration of open-source code and the complete R&D process, and was ultimately found to have infringed. This case, being the first involving AI technical secrets in the field of visual recognition, provides a model for the allocation of burden of proof in trade secret cases in emerging fields.

On the other hand, sanctioning obstruction of evidence.

In case ((2023) Supreme People’s Court IP Civil Final No. 2039), the infringer refused to provide complete production drawings, claiming that the relevant materials had been destroyed, and engaged in dishonest conduct such as contradicting its in-court statements with information published on its official website. The court applied the rule of experience “arguing from the lesser to the greater” to presume that all related models of the infringer’s products used the technical secret in question, without needing to compare each individual product. In case ((2023) Supreme People’s Court IP Civil Final No. 1228), the infringer refused to submit financial materials, and the court applied the rights holder’s sales profit margin as the profit margin of the infringer to reasonably calculate the profits from infringement, significantly reducing the rights holder’s burden of proof. Additionally, in case ((2023) Supreme People’s Court IP Civil Final No. 1669), the court clarified that if the infringer claims that the accused technology was independently developed, it must provide complete R&D records, drawings, and other evidence, and must exclude the possibility that the evidence was created after the fact; otherwise, it should bear the adverse consequences of failure to prove. This further regulates the infringer’s evidence presentation.

IV. Strict Examination of Defenses: Substantive Scrutiny of Independent Development, Publicly Known Information, and Reverse Engineering Defenses

With respect to common defenses such as “independent development,” “publicly known technology,” and “reverse engineering” raised by infringers, current adjudication practice shows a trend of “strict examination and precise scrutiny.” The strict conditions for the establishment of each type of defense are clarified, preventing infringers from evading legal liability through false defenses, while fully respecting lawful technology R&D and innovation.

On one hand, substantive examination of the independent development defense.

Courts adhere to the principle of “substantive examination,” requiring the infringer to provide a complete, genuine, and coherent chain of R&D evidence. In case ((2023) Supreme People’s Court IP Civil Final No. 1669), the infringer claimed that the accused technology was independently developed and submitted evidence such as work instructions and product drawings. However, after review, the court found that this evidence had issues such as incomplete drawing iterations, late submission, and obvious formal doubts, and could not prove that the technology was mastered before the relevant personnel joined the infringer. The court ultimately rejected the defense. This case clarifies that the examination of an independent development defense must consider not only “whether there was R&D activity” but also, critically, “whether the R&D activity predated the infringement and whether the R&D results are consistent with the technical secret in question,” completely negating the effect of “formalistic evidence.”

On the other hand, strict limitations on publicly known information and reverse engineering defenses.

In case ((2023) Supreme People’s Court IP Civil Final No. 655), the court clarified that the act of selling a product does not necessarily make the technical secret publicly known; merely observing the marketed product cannot obtain deep technical information such as material tolerances and structural connection relationships. Accordingly, the court rejected the infringer’s defense that “sale to the public means loss of secrecy.” In case ((2023) Supreme People’s Court IP Civil Final No. 2039), the court, in conjunction with criminal expert opinion, found that the damping material filling the machine tool cavity could not be removed, and the related process information could not be obtained through reverse engineering, thus rejecting the infringer’s reverse engineering defense. It clarified that a reverse engineering defense can only succeed on the precondition that “the technical secret can be fully obtained through lawful means.”

V. Upgrade of Compensation Liability: Refined Calculation + High Punitive Damages, with Support for Reasonable Litigation Costs

“Punitive damages + refined calculation” has become the core adjudication approach for trade secret infringement compensation. Courts have abandoned the traditional rough model of “discretionary damages” and, through refined calculation of profits from infringement and application of maximum punitive damages, significantly increased the cost of infringement, demonstrating the judicial orientation of “strict protection and severe punishment.” This is highly consistent with the core requirement of “increasing the intensity of infringement compensation” in the Annual Report on Intellectual Property Tribunal (2025) of the Supreme People’s Court.

First, refined calculation of damages, establishing a scientific and reasonable calculation model.

In case ((2023) Supreme People’s Court IP Civil Final No. 2039), the court constructed a three-factor calculation model of “infringing product sales volume × unit sales price × sales profit margin.” It used publicly available information such as the infringer’s parent company’s annual report to estimate the sales volume of the infringing products, calculated the weighted average unit price based on confirmed sales amounts, applied the infringer’s own operating profit margin differentiated by time periods, presumed the technology contribution rate to be 100%, and finally precisely calculated the profits from infringement. On this basis, the court applied the maximum 3x punitive damages, with a total award of over 380 million RMB. In case ((2023) Supreme People’s Court IP Civil Final No. 1228), the court used the rights holder’s sales profit margin and technology contribution rate to calculate the profits from infringement in segments, fully supporting the rights holder’s claim of 60 million RMB in damages. In case ((2023) Supreme People’s Court IP Civil Final No. 2467), the court considered that the production line contained other intellectual achievements and adjusted the technology contribution rate to 75%, fully respecting the core value of the trade secret while reflecting the judicial wisdom of balancing interests.

Second, expanding the scope of application of punitive damages, with maximum application becoming the norm.

According to the Annual Report on Intellectual Property Tribunal (2025) of the Supreme People’s Court, punitive damages were applied in several technical secret infringement cases. Among them, the “Quartz Glass Fiber” case and the “Glass Machine” case both applied the maximum 3x punitive damages, with awards exceeding 200 million RMB and 380 million RMB, respectively. In the “Oral CBCT” technical secret case, the court applied punitive damages according to law, fully supporting the rights holder’s claim of nearly 200 million RMB in damages. The court clarified that the application of punitive damages primarily considers factors such as the subjective malice of the infringement (e.g., repeated infringement, group infringement, malicious patent applications to conceal infringement), the duration of the infringement, and the scale of profits from infringement. For infringements with deep subjective malice and particularly serious circumstances, severe punishment is firmly applied to create a strong judicial deterrent. Additionally, in case ((2023) Supreme People’s Court IP Civil Final No. 36), the court clarified that, based on the degree of subjective fault of each joint infringer, an intentional infringer may be ordered to bear punitive damages, while other infringers bear joint and several liability within the scope of compensatory damages, achieving precise application of punitive damages.

Third, supporting reasonable expenses according to law, reducing the rights holder’s enforcement costs.

In several typical cases, courts explicitly supported reasonable litigation expenses incurred by the rights holder, such as attorney fees and notarization fees, and included them separately in the scope of compensation. For example, in case ((2023) Supreme People’s Court IP Civil Final No. 655), the court separately supported the rights holder’s attorney fee of 150,000 RMB, further lowering the threshold for rights enforcement and incentivizing rights holders to assert their rights according to law.

VI. Innovation in Enforcement Mechanisms: Detailed Injunctive Relief Orders, Creation of Differentiated Delay Damages System to Solve Enforcement Difficulties

“Difficulty in enforcement” and “incomplete cessation of infringement” in trade secret infringement cases are prominent challenges that have long plagued judicial practice. In current adjudication practice, courts have achieved revolutionary innovation in enforcement mechanisms through the combined approach of “refined court orders + creation of delay damages,” significantly enhancing the enforceability of judgments and fundamentally blocking the continued occurrence of infringing acts. This is also a key direction of adjudication reform that the Supreme People’s Court has been promoting in recent years.

On one hand, specifying and operationalizing injunctive relief orders.

In typical cases such as ((2023) Supreme People’s Court IP Civil Final No. 2039) and ((2023) Supreme People’s Court IP Civil Final No. 2467), the court decomposed the obligation to cease infringement into specific steps: “cease production and sale of infringing products; destroy the carriers that contain the technical secret under court supervision (including drawings, production equipment, etc.); notify all relevant personnel of the judgment content and require them to sign a confidentiality commitment; restrict the disposition of disputed patents; and periodically submit proof of compliance.” In particular, requiring the infringer to notify all employees of the judgment content and sign a confidentiality commitment pierces the company-level responsibility down to every individual who may access the technical secret, effectively preventing circumvention of enforcement through “shell company operations” or “private disclosure.” In case ((2023) Supreme People’s Court IP Civil Final No. 1228), the court explicitly ordered the infringer to dismantle the infringing production equipment and destroy or deliver all relevant drawings, eliminating the tools of infringement at the source and ensuring the cessation of infringement obligations are implemented. Additionally, in case ((2023) Supreme People’s Court IP Civil Final No. 35), the court clarified that “return of patent application rights or patent rights” could be a specific method for assuming the obligation to cease infringement, further enriching the forms of cessation of infringement liability.

On the other hand, implementing a differentiated delay damages system to strengthen enforcement deterrence and solve the “enforcement difficulty.”

In case ((2023) Supreme People’s Court IP Civil Final No. 2039), the court set differentiated delay damages standards for different types of cessation obligations: for the core obligation “cease using the technical secret,” a high daily delay damages of 1 million RMB was set; for auxiliary obligations such as “destroy drawings” and “notify relevant personnel,” daily delay damages of 100,000 RMB and a one-time delay damages of 5 million RMB were set, respectively; for the obligation to restrict patent disposition, delay damages of 500,000 RMB per patent were set. In case ((2023) Supreme People’s Court IP Civil Final No. 2467), the court set daily delay damages of 50,000 RMB or a one-time delay damages of 1 million RMB based on the circumstances of the case. The court clarified that payment of delay damages does not affect the rights holder’s right to separately claim compensation for actual losses, nor does it exempt the court’s power to take coercive measures such as fines or detention against the infringer. This builds a triple protection system of “delay damages + post-injury damages + judicial coercive measures,” making the cost of failing to comply with the judgment unbearably high for the infringer, fundamentally solving the “enforcement difficulty” in trade secret infringement cases.

VII. Clear Protection Orientation: Focus on High-Precision and Cutting-Edge Fields, Uphold Equal Protection for Chinese and Foreign Parties and Distinction Between Criminal and Civil Procedures

Combining the Annual Report on Intellectual Property Tribunal (2025) and typical cases of the Supreme People’s Court, it is clear that the orientation of current judicial protection of trade secrets is becoming increasingly clear: focusing on national strategic needs, prioritizing protection of core technologies in high-precision and cutting-edge fields, adhering to the principle of equal protection for Chinese and foreign parties, assisting in building a first-class law-based business environment, and providing strong judicial safeguards for the development of new quality productive forces.

First, prioritizing protection of technical secrets in high-precision, cutting-edge fields and national core industries.

According to the annual report, in 2025, the court concluded several cases involving technical secret infringement in “high-precision and cutting-edge” fields, focusing on national core industries such as AI and algorithms, high-end equipment manufacturing, aerospace and defense (e.g., quartz glass fiber field), oil extraction (e.g., SAGD process equipment field), and medical devices (e.g., oral CBCT field), protecting core technical secrets therein according to law. For example, in the case involving AI technical secrets in visual recognition, the court protected the rights holder’s algorithms and data databases according to law; in the “Glass Machine” case, it focused on protecting core technologies of high-end CNC machine tools; in the “Quartz Glass Fiber” case, it fully reflected the priority protection of original innovation in the aerospace and defense fields, demonstrating the judiciary’s precise role in supporting the development of new quality productive forces.

Second, adhering to equal protection for Chinese and foreign parties to support high-level opening up.

The annual report shows that since the establishment of the tribunal, the number of technical secret cases involving foreign parties has grown at an average annual rate of 18.7%, with an increasing number of foreign entities choosing to resolve IP disputes in Chinese courts, demonstrating the credibility of China’s judiciary. In the “Natural Protease 3” case ((2023) Supreme People’s Court IP Civil Final No. 2913), the court protected the overseas technical secret of New Zealand’s Echo Company according to law, rejected all defenses raised by the infringer, and equally protected the legitimate rights and interests of the foreign rights holder, effectively enhancing the confidence of foreign-invested enterprises in investing in China, serving as a typical model for cross-border trade secret protection. Additionally, in the case involving the “tire building machine” technical secret, the court adhered to equal status and equal protection of rights for Chinese and foreign parties, further strengthening the equal protection of high-value technical secrets, and practically implemented the judicial principle of “equal treatment for domestic and foreign parties.”

Third, distinguishing between criminal and civil procedures, strengthening the independence of civil protection.

In several typical cases, the court clarified that the determination of the scope of infringement and compensation liability in civil proceedings is not limited by the scope determined in prior criminal judgments and may be independently reviewed and judged according to law. For example, in the case involving the “continuous casting machine” technical secret, the court went beyond the scope determined in the prior criminal judgment, strengthened civil protection according to law, and fully supported the rights holder’s claim for damages, achieving an organic connection between criminal punishment and civil compensation, protecting the legitimate rights and interests of the rights holder in a comprehensive and multi-level manner.

Conclusion

Combining typical cases of the Supreme People’s Court and the Annual Report on Intellectual Property Tribunal (2025), it is evident that the current judicial protection of trade secrets is continuously strengthening, with adjudication rules constantly improving. The concept of judicial protection is transitioning from “resolving disputes” to “substantive, precise, and efficient protection.” This series of adjudication trends not only demonstrates the firm determination of the state to protect technological innovation and severely combat trade secret infringement but also provides clear guidance for enterprise trade secret management and enforcement practices: enterprises should further strengthen confidentiality system construction, standardize management of technology carriers, and focus on preventing employee departure-related leakage and group infringement risks; in the process of rights enforcement, emphasize fixing and preserving evidence, skillfully utilize adjudication rules such as shifting the burden of proof and obstruction of evidence, and claim punitive damages according to law to effectively protect their legitimate rights and interests.

In the future, as trade secret disputes in new fields and new business forms continue to emerge, judicial adjudication rules for trade secrets will be further refined and improved. Judicial protection will continue to focus on the development needs of new quality productive forces, strengthen the protection of core technical secrets, equally protect the legitimate rights and interests of various market entities, strive to solve difficult issues in infringement identification, proof, and enforcement, and provide even stronger judicial safeguards for building a first-class law-based business environment and promoting high-quality development of technological innovation.