Abstract

With the deep development of the digital economy and the iterative upgrading of industrial forms, the low-altitude economy, as a typical representative of new quality productive forces, has placed higher demands on the legal certainty of knowledge assets. The Provisions on the Protection of Trade Secrets (hereinafter referred to as the “New Regulations”), effective from June 1, 2026, represent not only a paradigm reconstruction spanning three decades in China’s trade secret protection field but also a profound response to the modern industrial governance system. This article aims to explore the institutional evolution path and core amendment logic of the New Regulations, with a focus on analyzing their far-reaching impact on the low-altitude economy industry in dimensions such as right confirmation, organizational governance, and industrial chain compliance.

I. Institutional Background and Evolutionary Logic: From Traditional Models to Modern Governance

As a core mechanism for maintaining fair competition and incentivizing innovation, the trade secret protection system traces its regulatory origins back to the Provisions on Prohibiting Infringements of Trade Secrets promulgated in 1995. However, after nearly three decades of operation, the original institutional framework has increasingly demonstrated its lag and limitations in addressing new types of illegal acts in the digital economy era, such as data infringement and algorithm theft.

The current amendment process exhibits significant stages and institutional complexity. Although the amendment process began as early as 2020, it entered a period of prudent observation due to the overall legislative rhythm of the Anti-Unfair Competition Law of the People’s Republic of China. It was not until July 2024, when the Third Plenary Session of the 20th Central Committee of the Communist Party of China adopted a strategic top-level design, explicitly incorporating “establishing a trade secret protection system” into the grand blueprint of the country’s comprehensive deepening of reforms. This top-level impetus provided crucial legal support and policy momentum for perfecting the New Regulations, ensuring that they achieved a cross-generational elevation from traditional regulatory models to a modern governance system based on balancing industrial innovation and fair competition.

II. Paradigm Reconstruction of the Normative System

The New Regulations have undergone a paradigm reconstruction and institutional replacement of the original normative system, with their innovative contributions primarily focusing on the following five core dimensions:

1. Extension of the Protected Subject Matter

The New Regulations significantly broaden the connotation and denotation of trade secrets, explicitly including high-value digital assets such as “code,” “algorithms,” and “failed experimental data” within the scope of legal protection. This shift marks a transition in institutional logic from a result-oriented to a process-oriented approach, achieving closed-loop protection for scientific research achievements and the entire R&D process.

2. Modernization of the Identification of Confidentiality Measures

In identifying “corresponding confidentiality measures,” the New Regulations exhibit significant adaptability to the times. Through legal fiction, they affirm the legal validity of digital technical means such as permission grading, data desensitization, and operation log retention, aiming to respond to the impact of emerging labor paradigms like remote work and cross-border collaboration on traditional physical isolation measures.

3. Specialization of Enforcement Jurisdiction

To address the “professional vacuum” dilemma faced by grassroots law enforcement departments in handling complex technical disputes, the New Regulations establish the principle of “hierarchical jurisdiction as primary, authorized jurisdiction as supplementary,” stipulating that technical secret cases shall generally be coordinated by market supervision and administration departments at or above the city level divided into districts, ensuring prudence and professional standards in administrative enforcement.

4. Chain-based Crackdown on Infringement

By detailing the discretionary standards for a third party’s “knowing or ought to know,” the New Regulations construct a chain-based liability system. This regulatory logic effectively curbs derivative illegal acts such as soliciting, inducing, and assisting infringement, achieving penetrating supervision over the illegal transfer path of trade secrets.

5. Precision of Penalty Standards

In setting legal liability, the New Regulations introduce flexible evaluation indicators centered on “the amount of direct loss to the right holder” and strengthen penalties for clear subjective malice such as “repeat infringement.” This aims to construct a governance pattern combining high violation costs with strong administrative deterrence through precise legal cost accounting.

III. Core Differences Between the New and Old Regulations: From “Principles” to “Detailed Rules”

The New Regulations have implemented a subversive reconstruction of the old regulations of 1995, with the core differences primarily manifested in the transformation from principled provisions to detailed provisions in key areas.

IV. “Institutional Security Reinforcement” and “Access-type Compliance Thresholds” for the Low-Altitude Economy Industry

1. Identification of the Protected Subject Matter: From Single Results to Right Confirmation of Full-Process Digital Assets

Article 5 of the New Regulations, through the explicit expansion of the scope of technical information, clearly incorporates digital assets such as “code, algorithms, and computer programs” into the protection hierarchy of trade secrets. This legislative change provides critical legal support for the low-altitude economy industry: core digital assets developed with high R&D costs, such as flight control logic, path planning matrices, and autonomous perception and obstacle avoidance systems, have obtained rights protection at the same level as traditional hardware architectures at the institutional level.

A particularly notable innovation lies in Article 7 of the New Regulations, which reinterprets the connotation of the constituent element “having commercial value,” explicitly recognizing “interim results and failed experimental data and technical solutions” as intangible assets in the legal sense. For low-altitude economy enterprises, this means the evaluation logic of R&D value has shifted from a unary “result orientation” to “process assetization.” Not only are mature optimization algorithms protected, but also “negative experimental results” (i.e., error-avoidance plans indicating “this path does not work”) verified through significant capital investment in complex airflow environment tests or high-altitude performance experiments are endowed with exclusive commercial value. This legal treatment of R&D trial and error costs effectively prevents competitors from achieving “R&D shortcuts” or “late-mover advantages” by stealing interim data, thereby institutionally covering the entire R&D cycle of the low-altitude economy and safeguarding competitive interests.

2. Legal Fiction and Normative Identification of Confidentiality Measures in Digital Scenarios

Given the low-altitude economy industry’s high reliance on distributed R&D, cross-regional collaboration, and cloud-based data interaction, the form and transfer scenario of its trade secrets have undergone profound digital migration. Article 9 of the New Regulations, in response to this practical change, explicitly affirms the legal validity of digital prevention and control means such as “permission grading, data desensitization, and operation log retention” through legal enumeration.

This provision not only responds at the legislative level to the evolution of labor paradigms driven by information technology but also outlines a precise set of compliance guidance logic for low-altitude economy enterprises at the practical level. Specifically, differentiated authorization mechanisms (permission grading) for core flight control source codes, de-identification processing (data desensitization) for large-scale flight test data, and dynamic traceability systems (operation log retention) for sensitive asset access paths have been elevated from pure information security technical requirements to “corresponding confidentiality measures” in the legal sense. From the perspective of judicial practice and administrative enforcement, the deployment of the above technical governance means will constitute core evidentiary support for determining whether the right holder has fulfilled “confidentiality obligations.” This institutional transformation from physical isolation to logical isolation and from static prevention to dynamic evidence preservation provides a solid positive law foundation for low-altitude economy enterprises to establish a trade secret defense system in a complex digital collaboration context.

3. Professionalization and Innovation in Jurisdiction Allocation: Upward Shift of Authority Center and Collaborative Governance Pattern

The New Regulations establish an institutional framework where technical secret cases are generally under the jurisdiction of market supervision and administration departments at or above the city level divided into districts, aiming to fundamentally solve the “professional vacuum” and “efficiency deficit” displayed by grassroots administrative enforcement when dealing with complex technical disputes.

This vertical adjustment of authority allocation has dual regulatory value in both legal theory and practice: First, by shifting the jurisdiction center upward, it ensures the professionalism of case handling and the uniformity of discretionary standards, effectively avoiding identification errors or discretionary inaccuracies that may result from insufficient grassroots enforcement resources and limited technical knowledge; second, this centralized jurisdiction model provides an adapted governance environment for the unique technical attributes of the low-altitude economy industry. For high-barrier technical secrets involved in low-altitude aircraft R&D, such as software algorithm logic and flight control strategies, departments at or above the city level possess more complete technical appraisal support systems and specialized enforcement teams, enabling more penetrating judicial appraisal and fact-finding regarding the “not known to the public,” “commercial value,” and constituent elements of infringement.

At the same time, the optimization of jurisdiction levels is not a simple stripping away of grassroots functions but an evolution towards a linkage model of “city-led, grassroots-coordinated.” Through the refined transmission of local guidelines—such as the Guidelines for Trade Secret Protection in the Low-Altitude Economy Industry first issued by Shenzhen—grassroots enforcement units, after receiving professional training, have substantially improved their capabilities in initial identification of infringement clues and on-site investigations in the low-altitude economy field. This governance structure of “center of gravity moving up, tentacles sinking down” ensures that infringements can be discovered in a timely manner and handled professionally, thereby constructing a rule-of-law guarantee system with both depth and responsiveness for the innovation ecosystem of the low-altitude economy, a strategically emerging industry.

4. Chain-based Reconstruction of the Infringement Imputation System: Penetrating Supervision and Governance of the “Gray Industry”

Article 14 of the New Regulations, by detailing the subjective standard of “knowing or ought to know” for third parties, constructs a liability determination system that runs through the entire process of trade secret transfer. This institutional evolution provides solid legal support for precisely cracking down on soliciting, inducing, and assisting infringements upstream and downstream in the industrial chain, with the core logic being to dismantle the “gray value chain” of illegal trade secret transfer from its source.

This full-chain regulatory model has a significant targeted effect on the low-altitude economy industry. In typical infringement scenarios—for example, when a core flight control algorithm of a drone R&D enterprise is illegally stolen by a departing employee and flows to a competitor—the tracing of legal liability will no longer be limited to the direct infringer. If the subsequent user subjectively meets the threshold of “ought to know,” their acquisition and use will be included in the scope of liability. More penetratingly, any entity providing key benefits in the intermediate links, such as a third party that provides cross-border fund settlement, technical parameter adaptation, or builds distribution channels for infringing products while knowing the ownership defect of the information involved, may be defined as a joint infringing entity.

In response to the structural characteristics of the low-altitude economy industry—such as rapid iteration of technical achievements, highly dispersed transaction entities, and the digital concealment of infringement paths—the New Regulations establish a disciplinary network covering the entire chain of “R&D, illegal acquisition, processing and transfer, and end sales,” effectively solving the previous practical difficulty of entities shirking responsibility due to “information shielding.” By strengthening the duty of reasonable care of all entities in the chain, the New Regulations significantly increase the cost of illegal activity and governance effectiveness, thereby constructing a more deterrent competitive legal order for the original innovation of low-altitude economy enterprises.

5. Precision Shift of the Administrative Sanction Mechanism: Synergistic Optimization of Discretionary Flexibility and Deterrence Effectiveness

The New Regulations achieve a paradigm shift from “fixed penalty” to “effect-oriented” in setting legal liability. By introducing flexible evaluation indicators such as “causing relatively large amount of direct loss to the right holder” and combining this with aggravated definitions of malicious circumstances like “re-infringement within two years,” a set of administrative sanctions is constructed that is highly adapted to the degree of social harm.

This precise penalty model has profound regulatory significance for intellectual property protection in the low-altitude economy industry. As a typical high-R&D-investment field, its core technical assets—such as flight control algorithms, high-precision navigation databases, and scenario-specific operational plans for specific airspace—have extremely high asset specificity and competitive sensitivity. Once infringed, the damage suffered by the right holder often exhibits nonlinear characteristics, covering sunk R&D costs, dilution of core competitive advantages, and loss of first-mover advantage in market access. The flexible penalty standards established by the New Regulations grant enforcement agencies more flexible discretionary space, enabling them to comprehensively consider composite factors such as R&D marginal cost, infringement duration, and market share fluctuations, thereby overcoming the drawbacks of the traditional fixed fine model, which may lead to “regulatory capture” or “disproportionate penalties” in complex infringement scenarios.

Furthermore, incorporating “repeat infringement” into the legal category of “serious circumstances” reflects the law’s zero-tolerance stance towards subjective malice. In the fiercely competitive low-altitude economy track with rapid technological iteration, repeat infringement not only harms individual enterprise rights but also structurally damages the industry’s innovation ecosystem. By strengthening penalties for such conduct, the New Regulations significantly raise the marginal cost of violations, aiming to build a firm “legal high-voltage line” providing high-intensity institutional protection for the healthy competition and orderly development of the low-altitude economy industry.

V. Business Impact Analysis: Paradigm Shift from “Compliance Cost Center” to “Core Competitive Barrier”

The implementation of the New Regulations not only reconstructs the logic of legal regulation but also triggers profound changes in the business strategies and competitive landscape of the low-altitude economy industry at a deeper level. Its impact is mainly reflected in the following three key dimensions:

1. Compliance Capability as a “Watershed” in Market Competition

The New Regulations significantly raise the institutional compliance threshold for enterprises. Constructing a trade secret protection system that meets the requirements of the New Regulations—including differentiated permission management, dynamic audit tracking, and stringent supply chain confidentiality networks—requires substantial financial and professional human capital investment.

• Intensification of the Matthew Effect: For leading enterprises with capital advantages and standardized management capabilities (e.g., DJI), compliance investments can be transformed into exclusive competitive barriers, further consolidating their market advantages.
• Industrial Stock Clearance: Conversely, small and medium-sized enterprises with lower management precision or limited resources will face extremely high compliance premiums and survival pressure. This survival-of-the-fittest driven by compliance costs will accelerate the concentration of resources in the low-altitude economy field towards high-quality entities, promoting the intensive transformation of the industrial structure.

2. Reshaping of Partner Evaluation Mechanisms in the Context of Collaborative Innovation

Under the trend of open innovation and deep integration of industry, academia, and research, trade secret protection capability has evolved from an internal management factor to a core access indicator for external collaboration.

• Pre-review and Dynamic Assessment: When selecting suppliers or technical partners, the standardization of their internal management and the security of their technical integration scenarios have become necessary parts of due diligence.
• Rise of Refined Collaboration Models: To balance technology sharing and secret protection, enterprises tend to adopt more defensive collaboration architectures. For example, through “black box” interface design, code segmented delivery, and strict definition of “background intellectual property” and “foreground intellectual property,” logical isolation of core assets is ensured during technical interaction.

3. Talent Flow Regulation and the Imbalance and Reconstruction of Labor Capital Protection

Article 15 of the New Regulations establishes the legality of employees using “general knowledge, skills, and industry experience,” requiring enterprises to shift from “crude containment” to “precise identification” in human resource governance.

(1) Granular Definition and Classified Governance of Knowledge Assets

Enterprises should establish a dynamic “Knowledge Asset Classification Inventory,” achieving clear boundaries of rights through institutional differentiation:

• Public Domain Assets (portable by employee mobility): e.g., general drone assembly procedures, standard PID control algorithm tuning experience, general airspace declaration processes within the industry.
• Proprietary Secret Assets (enterprise sedimentation): e.g., endogenous disturbance compensation algorithms optimized for specific airflow environments, private communication protocols coordinated with regulatory authorities, and undisclosed eVTOL composite material formulations.

By implementing written confirmation mechanisms during onboarding and training stages, ensure employees have clear expectations regarding knowledge ownership, reducing the risk of subsequent legal disputes.

(2) Synergistic Logic Optimization of Non-Compete Agreements and Confidentiality Obligations

To avoid legal liability or compensation burdens that may arise from excessively restricting employees’ career development, enterprises need to construct more flexible governance logic:

• Hierarchical Jurisdiction and Precise Authorization: Relying on “permission grading” under Article 9 of the New Regulations, concentrate core confidential resources among very few top-tier researchers (e.g., core architects), thereby narrowing the coverage of non-compete agreements.
• Evidentiary Reconstruction of Exit Audits: In the departure process, document in detail the non-general information and specific project backgrounds the employee accessed, forming an “evidence loop” through signed confirmations, providing empirical basis for future determinations between “general experience” and “specific secrets.”

(3) Building Traceability Throughout the R&D Process

To respond to the exemption clauses for “independent R&D” and the legitimacy challenges of “reverse engineering” under the New Regulations, enterprises need to build a strict traceability system:

• Strengthening the Legal Validity of R&D Logs: Mandate R&D record management in controlled environments (e.g., Git commit records, experimental parameter snapshots) to demonstrate the autonomy and originality of technical output, constructing a defensive moat against infringement allegations.
• Technical Resistance Layout Against Reverse Engineering: Given that the New Regulations permit disassembly analysis of publicly available products, enterprises should strengthen physical encapsulation and logical encryption at the physical level, such as hardware wiring and sensor layout, to maintain substantive competitive advantages by increasing the marginal cost of technical circumvention.