Recently, the Intellectual Property Court of the Supreme People's Court concluded a case of infringement of trade secrets. The plaintiff Luoyang Ruichang Environmental Engineering Co., Ltd. believed that its former employees, including Gao Feng, Cheng Xiangfeng and Tang Haikuan, had become employees of the newly established Luoyang Mingyuan Petrochemical Technology Co., Ltd. (hereinafter referred to as "Mingyuan Company"), which violates the confidentiality agreement. Some of the employees took advantage of the former posts to disclose, used or allowed Mingyuan Company to use the trade secrets and technical secrets they had mastered from the plaintiff before leaving their posts, and applied for patents to compete under the same industry, which seriously infringed the legitimate rights and interests of the plaintiff. The plaintiff filed a lawsuit against the ten natural persons as well as Mingyuan Company, and requested the defendants to stop infringing on its technical secrets, trade secrets, cease the unfair competition behaviors, and compensate for economic losses and reasonable expenses, totaling 10 million yuan. 

The court of first instance found that the defendants jointly infringed on the trade secrets of 25 clients of the plaintiff. Thus the court ordered the defendants to stop the infringement and compensate the plaintiff for economic losses and reasonable expenses totaling 1.5 million yuan, and several accused natural person shall bear joint liability. Meanwhile, the court found that the evidence submitted by the plaintiff could not prove that the confidential technical information claimed belongs to technical secrets. Both parties refused to accept the ruling and appealed to the Supreme People's Court. 

According to the court of second instance, identification of trade secrets and technical secrets calls for constitutive requirements such as secrecy, value and confidentiality, and shall put focus on whether the information is known to the public, whether it has realistic and potential commercial value, whether reasonable confidentiality measures are taken, etc. It is indisputable that the client information involved belongs to trade secrets, but the court of second instance has different views on the identification of technical secrets. The court of first instance held that Cheng Xiangfeng and other employees participated in the relevant technical training organized by Honeywell Company, an outsider, and the plaintiff failed to provide evidence to prove the source and scope of other trainees, and could not prove that the training content was "unknown to the public" and belonged to the plaintiff's technical secrets, so the claimed technical secret lacks secrecy. 

The court of second instance held that: the defendant applied for a patent on the technical information involved, indicating that the technical scheme was different from the existing technology. Therefore, under the condition that the composition of the patent involved and the confidential technical information was substantially the same, it could be presumed that the confidential technical information was "unknown to the public". Furthermore, the plaintiff has carried out technical cooperation and follow-up research and development with Honeywell for a long time, and its related parties provide technical support, which can prove that confidential technical information cannot be easily obtained from public channels. Finally, according to the Technical Information Consultation Report issued by the Patent Retrieval Consultation Center of CNIPA, the technical documents for disclosing classified technical information have not been found before the patent disclosure date involved, and the defendant claims that the technical information has been disclosed through the use of insufficient evidence. Therefore, there is no evidence to prove that the confidential technical information has been known to the public before the announcement of the patent authorization involved, so the technical information is confidential, which meets the requirements on value and confidentiality, and belongs to technical secrets. The ruling of the court of first instance was therefore upheld. 

As for whether the defendant's use of client information constitutes an infringement of trade secrets, it is necessary to handle the relationship of the protection on trade secrets with the workers' freewill to choose jobs and rational flow of talents, and more efforts shall be put on examining whether employees' behaviors are unfair, and protecting employees' rights to rationally use the knowledge, experience and skills accumulated in their work after leaving their posts. On the premise of legal or agreed non-competition obligations, unless the former employer can prove the unfairness of the competitive advantage taken by employees or their new employer by using the client information, the use of client information obtained by former employees from their own work would not in every case constitutes illegal act. 

Six defendants, including Cheng Gaofeng, signed the Confidentiality Agreement with the Plaintiff, and assumed the obligation of non-competition and confidentiality. During their employment and after leaving their posts, they helped Mingyuan Company to reach a transaction with the plaintiff's clients, and the products sold partially compete with the plaintiff, which resulted loss of trade opportunities at the plaintiff’s side, and constituted an infringement on the plaintiff's trade secrets. Cheng Xiangfeng, the defendant, as the actual controller of Mingyuan Company, knowingly obtained and used the client information to engage in business activities, which constituted an infringement on the plaintiff's trade secrets. Defendant Tang Haikuan and other three people have no legal or agreed non-competition obligations after leaving their posts or after the expiration of the non-competition agreement, and can choose new employer freely. The plaintiff failed to prove that the three people have improper behaviors, so they do not infringe on trade secrets.

On the specific consideration on liability of infringement, some defendants jointly committed acts of infringing trade secrets, and shall bear the civil liability to stop the infringement. However, considering confidentiality agreed in the contract had already expired from the date of some of the defendants leaving their posts to the date of the second trial, and the value and competitive advantage of client information had weakened with the passage of time and the change of market supply and demand relationship, a permanent prohibition of the defendants from entering the competitive market is not conducive for establishing an equal, fair and orderly market environment, and the 3.1 million yuan compensation shall be sufficient to make up for the plaintiff's loss, hence the judgment to stop the infringement has lost its necessity and timeliness, which is no longer supported by court.