China’s Supreme People’s Procuratorate Amends Prosecution Standards for Criminal Trade Secret Theft

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On September 18, 2020, China’s Supreme People’s Procuratorate of the Ministry of Public Security released the Decision of the Supreme People’s Procuratorate of the Ministry of Public Security on Amending the Prosecution Standards for Criminal Cases of Commercial Secret Infringement (最高人民检察院 公安部关于修改侵犯商业秘密刑事案件立案追诉标准的决定). The decision brings the prosecution standards in line with the recent Supreme People’s Court issuance of Interpretation on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights (3) (关于办理侵犯知识产权刑事案件具体应用法律若干问题的解释(三)), notably, the reduction in threshold required to prosecute trade secret misappropriation to 300,000 RMB (~$44,000 USD).

The decision sets the threshold for prosecution for misappropriation of trade secrets to: 

(1) The amount of losses caused to the owner of a trade secret is more than 300,000 yuan;

(2) The amount of illegal income from theft of trade secrets is more than 300,000 yuan;

(3) Directly causing the owner of the trade secret to go bankrupt or go bankrupt due to major business difficulties; or

(4) Other situations that cause major losses to the owners of trade secrets.

The amount of losses or illegal gains may be determined based on reasonable license fee for the trade secret, by lost profits from sales (but if lost profits are lower than a license fee, than a reasonable license fee will be used), commercial value (based on cost of R&D and implementation), or illegal gains of the trade secret receiver.

The remedial expenses paid by the owner of a trade secret to reduce losses to business operations or business plans or to restore the security of computer information systems and other systems shall be included in the losses caused to the owner of the trade secret.

Author: Aaron Wininger

Aaron Wininger is a Senior Attorney and Director of China Intellectual Property at Schwegman Lundberg & Woessner.

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Author: Aaron Wininger

Aaron Wininger is a Senior Attorney and Director of China Intellectual Property at Schwegman Lundberg & Woessner.