The Supreme Court of the People's Republic of China: How to handle the plaintiff's submission of drawings without specifying which information is a trade secret?
The lawsuit cannot be dismissed on the grounds that the plaintiff only submitted drawings without specifying which information is a trade secret, and the trial should continue
Reading tip: Today, the Intellectual Property Court of the Supreme People's Court selected 61 typical cases from 3468 cases concluded in 2022 to showcase the judicial concepts, trial ideas, and judgment methods in technology related intellectual property and monopoly cases. 75 judgments were extracted and published as the "Summary of Judgments of the Intellectual Property Court of the Supreme People's Court (2022)". This article focuses on the cases related to trade secrets in the abstract, sorting them out one by one and sharing them with readers.
Summary of the judgment: The people's court cannot simply dismiss the lawsuit on the grounds that the plaintiff did not clarify which specific information in the drawings belongs to technical secrets.
Case summary:
1. On August 18, 2020, Beijing Semiconductor Special Equipment Research Institute (45th Research Institute of China Electronics Technology Group Corporation) (hereinafter referred to as "45th Institute") sued Gu Haiyang, Gu Feng, and Hangzhou Zhongsi Electronic Technology Co., Ltd. (hereinafter referred to as "Zhongsi Company") for a dispute over infringement of technical secrets. The case was filed for review by Hangzhou Intermediate People's Court in the first instance.
2. On June 10, 2021 and September 26, 2021, Hangzhou Intermediate People's Court organized the first and second pre-trial meetings respectively, requiring the 45th Institute to clarify the technical information content. The 45th Institute submitted technical drawings, but did not specify the specific content of the technical information.
3. On September 30, 2021 and October 5, 2021, the 45th Institute submitted two new technical drawings to the Hangzhou Intermediate People's Court. The Hangzhou Intermediate People's Court has twice clarified that the drawings are only carriers of technical secrets and requested that the 45th Institute clarify the content of the technical secrets, but the 45th Institute has not yet clarified it.
4. On October 12th and 13th, 2021, Hangzhou Intermediate People's Court organized the third pre-trial meeting, and the 45th Institute has not yet submitted the technical secrets involved in the drawings.
5. On October 18, 2021, the Hangzhou Intermediate People's Court ruled that the 45th Institute did not clarify the objective content of its claimed rights, and its lawsuit did not meet the statutory conditions. Therefore, the court dismissed its lawsuit. Forty five were dissatisfied and appealed to the Supreme People's Court.
6. On December 26, 2022, the Supreme People's Court revoked the first instance civil ruling in the second instance and ordered the Hangzhou Intermediate People's Court to continue the trial.
Key points of the Supreme Court's judgment:
1. The law requires the right holder to specify the time point of the secret content. Article 27 of the "Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases Involving Infringement of Trade Secrets" stipulates: "Article 27: The right holder shall clarify the specific content of the trade secret claimed before the end of the debate in the first instance court. If only a part can be clarified, the people's court shall hear the clarified part. If the right holder separately claims the specific content of the trade secret that was not clarified in the first instance in the second instance procedure, the second instance people's court may mediate the litigation request related to the specific content of the trade secret based on the principle of voluntary participation of the parties; if mediation fails, the parties shall be informed to file a separate lawsuit. If both parties agree to be heard together by the second instance people's court, the second instance people's court may make a joint judgment." Therefore, in trade secret cases. In the middle, The plaintiff, as the right holder, should clarify the specific content of the claimed trade secret before the end of the first instance court debate. This is the legal deadline requirement for the plaintiff to clarify the content of the secret.
2. Regarding the selection of rights holders to protect the content of secret points. In this case, the Supreme Court held that if the rights holder claims that the technical information recorded in the drawings constitutes a technical secret, they can claim that the collection of all technical information recorded in the drawings belongs to the technical secret, or they can claim that one or some technical information recorded in the drawings belongs to the technical secret. Therefore, if the plaintiff only submits the drawings and responds to the court's claim that the secret point content is the secret point content on the technical drawings, it complies with legal requirements.
3. Regarding whether the plaintiff's claim to protect the secret points can be determined solely based on the drawings. The Supreme Court believes that technical drawings are the carrier of technical secrets, and based on the drawings, the content and scope of the claimed technical secrets can be determined. Therefore, the content of the technical secrets protected by 45 in this case is clear, and there are specific litigation requests in the lawsuit. The original court should review whether the claimed technical information has confidentiality, value, and secrecy, and further examine whether the other party has obtained, disclosed, or used it through improper means.
4. Regarding whether the plaintiff's lawsuit should be dismissed if they only submitted drawings without clearly indicating the content of the secret points. The Supreme Court held that the Hangzhou Intermediate People's Court rejected the lawsuit on the grounds that the content of the technical secrets claimed by the 45 parties could not be determined, the scope of protection claimed by the 45 parties could not be determined, and it was impossible to hear whether the technical information claimed by the 45 parties constituted technical secrets. This was an error in the application of law and should be corrected. The Hangzhou Intermediate People's Court should continue to hear this case on the basis of the 45 claims.
Case source:
Appeal Case of the Dispute over Infringement of Technical Secrets between Beijing Semiconductor Special Equipment Research Institute and Gu Haiyang et al. [Case No.: (2021) Supreme People's Court Notice No. 2526]
Lawyer Li Yingying commented:
Firstly, in trade secret cases, the content of the secret points that the plaintiff claims to protect directly affects whether the plaintiff's lawsuit request is clear and the defendant's right to defend. As the plaintiff, the rights holder must clarify the specific content of the claimed trade secret to the court before the end of the first instance court debate. Otherwise, it is highly likely that the court will determine that the content of the claimed rights is unclear and the litigation claims are unclear, and face the legal risk of being rejected by the court.
Secondly, as the plaintiff's representative lawyer, one of the important tasks of the representative lawyer in trade secret cases is to assist the client in determining the confidential information to be protected before filing the lawsuit. The selection and determination of the content of the secret point directly affect whether the information will be identified as non-public knowledge and identity information by the judiciary in the future. If this work is not done well, it is highly likely to lead to a lawsuit.
Thirdly, as the plaintiff's representative lawyer, one should represent the client to clearly explain the content of the claimed secret point to the court, rather than just submitting the secret point carrier to the court. Because the secret point carrier only proves the existence and authenticity of the secret point content, it does not exempt the plaintiff's lawyer from the obligation to explain the specific secret point content. In this case, the Hangzhou Intermediate People's Court repeatedly requested the plaintiff's representative lawyer to clarify the content of the secret points, but the plaintiff's representative lawyer did not specify the specific technical information that they claimed to protect. If the plaintiff's representative lawyer in this case had clarified the specific content of the secret point to the court upon request, the Hangzhou Intermediate People's Court would not have ruled to dismiss the lawsuit on this grounds in the first instance. Although the Supreme Court ruled in the second instance that the Hangzhou Intermediate People's Court would continue the trial, it greatly delayed the review time of the case, which was also a loss for the client.
Fourthly, as the plaintiff's representative lawyer, if the court drawings constitute technical secrets, the specific contents, technical links, steps, data, etc. of the drawings should be pointed out. The specific composition and reasons of the technical secrets should be clarified, and they should be distinguished and explained from the information known to the public, rather than handing over the work that originally belonged to the plaintiff's lawyer to the judge.
Finally, Lawyer Li Yingying reminds everyone that trade secret cases involve multiple complex legal issues such as evidence preservation, summary and determination of secret points, non-public knowledge identification, identity identification, loss identification, loss calculation, infringement argumentation, and clever application of evidence rules. The case itself is difficult and comprehensive, and a slight carelessness can result in a complete loss. Both the plaintiff and defendant should hire professional and experienced trade secret lawyers to safeguard the progress of the case.
Professional Background Introduction: Li Yingying, a lawyer at Beijing Yunting Law Firm, graduated from the Chinese Academy of Social Sciences with a Master's degree in Civil and Commercial Law (with a focus on Company Law). He specializes in practical fields such as civil and criminal trade secrets, civil and commercial litigation and arbitration, preservation and enforcement. He has successfully handled multiple major and complex cases in the Supreme People's Court and various provincial higher people's courts, with a total amount of over 10 billion yuan. Lawyer Li Yingying has been deeply involved in civil disputes and criminal offenses related to intellectual property for many years, and has conducted in-depth research on legal issues related to intellectual property (especially trade secrets). Lawyer Li Yingying has won multiple civil cases involving intellectual property rights, representing multiple clients as plaintiffs and successfully seeking triple punitive damages from the court. The client has successfully obtained a compensation amount of 202 million yuan (the highest compensation amount in China's current trade secret civil cases, exceeding the previous highest compensation amount of 159 million yuan in the vanillin case). The defendant clients have successfully won court judgments that do not constitute infringement, and the victim companies have successfully initiated criminal cases, pursued criminal prosecution, and successfully obtained criminal punishment for criminals; The handling of criminal cases involving trade secret crimes on behalf of multiple defendants/defendant units has also achieved a good effect of being acquitted and the prosecutor's office deciding not to prosecute. In 2023, the civil case of trade secrets represented by Lawyer Li Yingying was included in the intellectual property white paper of a certain higher people's court. In April 2024, the civil case of trade secrets fully represented by Lawyer Li Yingying was rated as a typical case by the Supreme People's Court. In April 2024, another civil case involving trade secrets represented by Lawyer Li Yingying (representing the plaintiff) was rated by a provincial higher people's court as the only case with the highest compensation amount in the province. Meanwhile, Lawyer Li Yingying also has rich project experience in the field of trade secret system construction. Assisted multiple corporate clients in completing legal due diligence on the operation of their business secret confidentiality system, and successfully established a comprehensive business secret confidentiality system for multiple corporate clients. In the field of civil and commercial dispute resolution, Lawyer Li Yingying has handled a large number of major, difficult and complex cases, and has successfully obtained court support for clients' litigation requests, second instance verdicts and other results, receiving unanimous praise and recognition from numerous clients. In the field of preservation and enforcement, Lawyer Li Yingying has hosted a large number of difficult enforcement cases, such as: during the epidemic lockdown period, he acted as an agent for clients to preserve billions of cash from defendants within a week; The proxy client successfully revoked the court's freeze on the company's business information; Successfully revoking the auction conducted by the court on behalf of the client; The proxy client successfully blocked the auction of land and factory buildings by the applicant for execution, ultimately striving for a satisfactory outcome of execution and settlement. Up to now, lawyer Li Yingying has published more than 100 professional articles on topics such as trade secrets, company practice, preservation and enforcement on official account such as "The Empire of Jurists", "Civil and Commercial Judgment Rules", "Preservation and Enforcement", and many articles have been reprinted by the Supreme People's Court and local courts, widely praised by professionals. In 2022, Lawyer Li Yingying, based on years of experience in handling a large number of execution review related businesses, guided by real cases, summarized and categorized the main legal issues, typical judgment rules, risk response strategies, and solution suggestions in various business scenarios, and co authored the publication of "Preservation and Execution: Practical Guidelines for Execution Objections and Execution Objection Litigation". Next, the Li Yingying legal team will gradually publish books on practical trade secret litigation and technical contract disputes to better serve clients.
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