Trade secrets constitute a vital form of intellectual property and serve as the cornerstone of a company's competitive edge. Strengthening the protection of trade secrets is a critical mission in intensifying the fight against unfair competition, playing a key role in energizing corporate innovation, optimizing the business climate, and advancing the high-quality growth of China's economy. In essence, safeguarding trade secrets means protecting innovation itself. To leverage the educational and deterrent power of typical cases and steer market players toward fair competition, six representative cases of trade secret infringement are hereby disclosed.

Case One: Shanghai Yangpu District Market Regulation Bureau Penalizes Snowview Electronics, Nanjing Jiulanwen Instruments, and Individuals Xu and Guan

Xu and Guan, former R&D personnel at Anmou Technology (Shanghai) Co., Ltd. (the rights holder), had knowledge of the technical secrets behind the "Two-Dimensional Gas Chromatograph Solid-State Thermal Independent Modulator" (TIM) and had signed confidentiality agreements with the rights holder. Departing in 2015, they established Snowview Electronics (Shanghai) Co., Ltd. (Snowview) and Nanjing Jiulanwen Instruments Technology Co., Ltd. (Jiulanwen), continuing to develop, produce, and sell solid-state thermal modulators. From August 17, 2016, to March 26, 2024, the solid-state thermal modulators sold by both companies incorporated the technical secrets of the TIM. Furthermore, the parties disclosed these secrets to the public through invention patent applications.

Both Snowview and Jiulanwen violated Article 9, Paragraph 3 of the Anti-Unfair Competition Law (2019 Revision), while Xu and Guan breached Article 9, Paragraph 1, Item (3) and Paragraph 2. On September 15, 2025, weighing the severity, duration, and impact of the infringement, the Yangpu District Market Regulation Bureau, under Article 21 of the Law, confiscated illegal gains of RMB 77,800 and imposed a fine of RMB 730,000 on Snowview; confiscated RMB 214,700 and fined RMB 770,000 on Jiulanwen; fined Xu RMB 100,000; and fined Guan RMB 100,000.

This case exemplifies the classic "individual leakage plus corporate profit" model of trade secret infringement, where former employees exploit pre-departure knowledge to establish companies and sell infringing products. The enforcement agencies' full-chain accountability targeting both the companies and the individuals strikes at the organizers and executors of the infringement while severing the profit channels that individuals or businesses might exploit to evade legal responsibility, delivering a powerful deterrent. Notably, the authorities went beyond a single administrative penalty, actively promoting parallel settlement negotiations alongside administrative punishment. Through a mediation platform, ten rounds of talks resulted in a settlement agreement covering compensation and patent ownership. This practice demonstrates that dispute resolution through settlement is also an effective avenue for optimizing the ecosystem of trade secret rights protection.

Case Two: Jiangsu Liyang Market Regulation Bureau Sanctions Xie and Chen for Trade Secret Infringement in Heavy Machinery

In heavy equipment manufacturing, core technical drawings are the lifeblood of a company's market competitiveness and represent quintessential technical trade secrets. A Liyang-based heavy machinery company (the rights holder), known for its PGS roll crushers and B-series apron feeders, holds a strong market position. Between 2019 and 2021, Xie, lacking in-house R&D capabilities, established a company in the heavy equipment sector and illicitly obtained the rights holder's technical secrets through multiple channels to gain unfair advantage. First, he purchased equipment technical drawings from Wang, a former technician of the rights holder. Second, leveraging external processing partnerships, he solicited Chen, the production manager of the rights holder's precision workshop at an outsourced unit, to provide equipment drawings. Third, he recruited Du, a former assembler, as his workshop director to access drawing materials, though Du only supplied outer-shell drawings without core technical points. Using the illegally obtained core drawings, Xie manufactured and sold five units of similar machinery. After the case came to light, Xie compensated the rights holder RMB 3,800,000, with Chen and Du each paying RMB 100,000 and RMB 50,000 respectively.

Xie's actions of acquiring and using trade secrets through improper means violated Article 9, Paragraph 1, Item (2) of the Anti-Unfair Competition Law (2019 Revision). On January 6, 2025, considering the case circumstances and compensation, the Liyang Market Regulation Bureau, under Article 21 of the Law, ordered Xie to cease the infringement and imposed a fine of RMB 100,000. Chen's disclosure of the rights holder's trade secrets in violation of confidentiality obligations breached Article 9, Paragraph 1, Item (3) and Paragraph 2. On the same date, Chen was ordered to cease the violation and fined RMB 50,000. Following investigation and appraisal, Du received no administrative penalty as the drawings he provided fell outside the rights holder's identified secret points, while Wang faced criminal punishment.

This case stands out as a complex, multi-party trade secret infringement, moving beyond the typical single-actor scenario. The enforcement authorities meticulously delineated the chain of leaks across "external operator solicitation, outsourcing partner disclosure, and former employee transfer," precisely distinguishing core secret points from non-core information, and imposing penalties proportionate to each party's role. This provides a valuable enforcement reference for similar multi-party cases. It also offers a compliance blueprint for manufacturing firms, urging the establishment of a comprehensive trade secret protection system. Companies must define confidentiality scopes and controls, sign agreements with key internal staff, conduct regular training, and extend oversight to outsourcing partners and former employees, embedding robust document management protocols to build a foundational defense and foster orderly innovation in the equipment manufacturing sector.

Case Three: Hangzhou Market Regulation Bureau Penalizes Sun for Trade Secret Infringement in AI Large Models

With the rapid evolution of artificial intelligence large models, companies increasingly rely on trade secret protection for emerging technical information such as prompt engineering and Agent skill packs. In July 2011, Sun joined a Hangzhou-based AI company (the rights holder) as a senior algorithm expert, leading the development of a vertical-domain AI intelligent review model until his departure in July 2025, during which he accessed core confidential materials. In December 2023, while still employed, Sun used his spouse's identity to register and control Fayuan (Hangzhou) Technology Co., Ltd. (Fayuan). By June 2024, he had sent the rights holder's proprietary AI model prompt templates, review rules, and labeling standards to Fayuan's R&D team to develop a competing model. Expert analysis confirmed that the combination of these materials formed an integrated scenario-based intelligent review solution, meeting the criteria of non-public knowledge, commercial value, and confidentiality controls, thus constituting a new type of integrated technical trade secret in the AI vertical domain.

Sun, bound by a confidentiality agreement signed upon joining in July 2011, held ongoing confidentiality duties during and after employment. His unauthorized disclosure of core confidential materials violated Article 9, Paragraph 1, Item (3) and Paragraph 2 of the Anti-Unfair Competition Law (2019 Revision). On May 28, 2026, the Hangzhou Market Regulation Bureau, after comprehensive consideration, ordered Sun to cease the disclosure and authorized use, imposing a fine of RMB 350,000 under Article 21 of the Law. Fayuan's infringement is being handled separately.

This case marks the first in China involving trade secrets in vertical AI large models, breaking traditional enforcement limits in the AI sector. While past IP enforcement in AI often centered on source code, this case dismantles the industry's "code fixation," aligning enforcement with AI's unique characteristics by affirming that natural-language integrated solutions and non-standard operational rules can independently constitute trade secrets. The investigation charts a path for identifying trade secrets in non-standard AI integration, filling a domestic enforcement gap and setting compliance boundaries for algorithm talent mobility, peer AI development, and confidential data management in tech ventures, thereby supporting the standardized and innovative growth of the AI industry.

Case Four: Hangzhou Market Regulation Bureau Sanctions Xie and Hangzhou Xinchuan New Materials for Trade Secret Infringement

Nano-alloy powders are widely used in semiconductor chip manufacturing, and the high-temperature nano-alloy powder forming technology encompasses extensive technical information, including process design, materials science, high-temperature flow field layout, and dual-head cooling techniques. A Zhejiang-based materials company (the rights holder), a global leader in this field, developed the technology through years of R&D. In 2014, Xie joined the rights holder, signed a confidentiality agreement, and gained access to the contested technical information during his tenure, departing in 2017. In November 2019, Xie established Hangzhou Xinchuan New Materials Co., Ltd. (Xinchuan) and disclosed the trade secrets to the company for scaled production. In March 2022, the Hangzhou Market Regulation Bureau launched an investigation following a report. Investigation and appraisal confirmed identity between parts of the technical information used by both companies and the rights holder's secrets. The parties argued the technology was public knowledge, citing expired foreign patents, but failed to provide R&D process documentation. The enforcement agency conducted cross-regional inquiries and multiple expert technical reviews. Given the interdisciplinary complexity and divergent expert opinions on non-public knowledge, administrative determination proved challenging. The agency advised the rights holder to pursue civil litigation, leveraging the burden-of-proof advantages. In civil court, evidence gathered during administrative enforcement was admitted, and both trials found Xie and Xinchuan jointly liable for infringement.

The Hangzhou Market Regulation Bureau determined that Xie violated Article 9, Paragraph 1, Item (3) and Paragraph 2 of the Anti-Unfair Competition Law (2019 Revision) by breaching confidentiality duties, while Xinchuan, as a competitor, knowingly acquired and used the trade secrets, breaching Article 9, Paragraph 3. On March 28, 2025, the Bureau ordered both parties to cease their violations and fined each RMB 300,000 under Article 21 of the Law.

This case highlights a dual-actor infringement scenario involving a former employee's leak and corporate misuse in the high-temperature alloy powder sector. The technical secrets were highly specialized and difficult to ascertain. Guided by market regulation authorities, the rights holder employed an administrative-civil linkage strategy, using administrative evidence in civil proceedings with shifted burden of proof to secure a successful outcome. This offers a strong model for rights holders in similarly complex cases.

Case Five: Zibo High-Tech Zone Market Regulation Bureau Penalizes Ji for Trade Secret Infringement

The theft of core technology and its unauthorized patent application can cause irreparable loss by exposing trade secrets to the public domain. Ji, a former employee of a Shandong-based intelligent equipment company (the rights holder), was deeply involved in a core R&D project. On August 7, 2024, prior to resignation, Ji violated company confidentiality rules by emailing project technical drawings to a personal account. On September 12 of that year, Ji filed an invention patent application for the technology under his children's names. Upon learning the rights holder intended to file its own patent, Ji withdrew the application on November 22. When the rights holder submitted its patent application in December 2024, it discovered the technology had been publicly disclosed through the earlier patent application, losing novelty and barring normal patenting. The rights holder promptly reported the matter to local authorities. Investigation confirmed that the technical information met the criteria for trade secret status—non-public knowledge, R&D investment of RMB 170,000, and reasonable confidentiality measures—prior to the patent application. With active coordination from enforcement authorities, the rights holder ultimately succeeded in securing patent authorization.

Ji's actions violated Article 9, Paragraph 1, Item (3) and Paragraph 2 of the Anti-Unfair Competition Law (2019 Revision), constituting trade secret infringement. Given Ji's cooperation, the settlement with the rights holder, and the issuance of a letter of understanding, the Zibo High-Tech Zone Market Regulation Bureau, under Article 21 of the Law, ordered Ji to cease the violation and imposed a fine of RMB 30,000 on July 9, 2025.

This case illustrates the irreversible destruction of trade secrets through malicious patent preemption. Unlike conventional infringement, patent publication thrusts the technology into the public domain, fundamentally and permanently extinguishing the "secrecy" element—a terminal harm. This case breaks from traditional enforcement focused solely on penalties, establishing a dual approach of infringement accountability and rights restoration. Beyond holding the violator legally responsible, the authorities proactively engaged with the National Intellectual Property Administration to provide evidence, using administrative confirmation procedures to clarify and correct patent ownership, effectively restoring the technology's IP status. This approach curbed core technology leakage, maximized loss recovery, and provides a replicable enforcement model for malicious preemption cases.

Case Six: Chongqing Liangjiang New Area Market Regulation Bureau Penalizes Yu for Trade Secret Infringement in Digital Culture

The digital culture and creative industry is booming, with short dramas, online literature, and digital content rapidly emerging. Creative scripts are the lifeblood of cultural firms and the fruit of creators' labor. Yet new risks accompany new business forms; script leaks and idea theft are eroding the industry's innovative foundation. In May 2023, Yu joined a Chongqing-based media company (the rights holder) as a production assistant, signing a confidentiality agreement. Between December 2023 and January 2024, the rights holder independently created the short drama script "Another New Year's Eve" (also known as "My Beautiful Mother"), planning its production. To protect this business information, the script was uploaded to the company's "Feishu" office system, with restricted access and monitored downloads. On January 20, 2024, Yu, leveraging authorized access to the Feishu system, downloaded the script and stored it on a USB drive. Later that month, Yu provided the script to another company (which was unaware of the infringement), leading to its production and broadcast on major platforms, causing the rights holder RMB 342,000 in production cost losses.

Yu's breach of confidentiality obligations in obtaining and disclosing the script, which held trade secret status, violated Article 9, Paragraph 1, Item (3) of the Anti-Unfair Competition Law (2019 Revision). On March 12, 2026, the Chongqing Liangjiang New Area Market Regulation Bureau, considering Yu's proactive compensation, ordered cessation of the violation and imposed a fine of RMB 50,000 under Article 21 of the Law.

This case achieves three breakthroughs. First, it extends trade secret protection to unpublished short drama scripts as business information, confirming that creative core assets—ideas, scripts, and planning schemes—meeting the criteria of secrecy, value, and confidentiality are protected under the Anti-Unfair Competition Law, covering the full "creation-preparation-release" cycle and filling a gap in digital culture IP protection. Second, it clarifies the boundary between trade secrets and copyright: copyright protects original expression and fixed works, remaining valid post-publication, while trade secret law protects undisclosed business information, maintaining competitive advantage through confidentiality. Third, it safeguards the industry's innovation ecosystem by cracking down on leaks and infringement, deterring unfair competition, and guiding market players toward integrity and innovation, thus nurturing the healthy development of the cultural and creative sector.