Trade Secrets, Confidential Information and NDAs in China - PowerPoint PPT Presentation

Presenting a live 90-minute webinar with interactive Q&A Trade Secrets, Confidential Information and NDAs in China Protecting Confidential Information, Preventing Infringement, and Enforcing Trade Secret Rights TUES DAY, APRIL 10, 2012 1pm East ern | 12pm Cent ral | 11am Mount ain | 10am Pacific Today’s faculty features: Paul D. Jones, Principal, Jones & Co. , Toront o, Canada Xu Jing, Part ner, King & Wood , Beij ing, China The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .

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Trade Secrets, Confidential Information and NDAs in China 商业秘密，保密信息 Trade Secrets, Confidential Information and NDAs in China - 商业秘密，保密信息以及保密协议在中国 以及保密协议在中国 Paul Jones Jones & Co. 钟保禄律师事务所 Джоунс и Ко. Toronto www.jonesco-law.ca 徐静 (Xu, Jing) 金杜律师事务所 (King & Wood Mallesons) 北京市 (Beijing) http://www.cn.kwm.com/ Strafford Webinars and Teleconferences April 10, 2012

简介 - Introduction Many commercial transactions start with the signing of a non-disclosure agreement (“NDA”) so that the parties may share confidential information At such an early stage in deals with China the foreign party is often reluctant to retain specialized counsel So they use their company’s standard form NDA prepared for use in North America What happens? 6

简介 – Introduction 在法院的维权 — Enforcement in the Courts 7

简介 - Introduction Unfortunately such standard NDAs do not usually conform with PRC contractual formalities They are not prepared with a view to enforcement in the PRC And the company is not usually prepared to present the best evidence when required by a Chinese court In the PRC there are laws to protect trade secrets and confidential obligations. But the rules of evidence in the courts are quite different - 8

商业秘密 — Trade Secrets 反不正当竞争法 (the PRC Anti-Unfair Competition Law)  Adopted September 2, 1993  Amendments proposed to State Council 2011  Contains a number of other provisions  Enforced by the State Administration for Industry and Commerce (known as “SAIC”)/Court 9

商业秘密 — Trade Secrets Article 10: 本条所称的商业秘密，是指不为公众所知悉、能为权利人带来经 济利益、具有实用性并经权利人采取保密措施的技术信息和经营 信息。 For the purposes of this Article, the term "trade secrets" shall refer to technical information and business information that is non-public, can bring economic benefits to the party that has rights in such secrets and is practical, and for which the party that has rights in such secrets has adopted measures to maintain its confidentiality. 10

商业秘密 — Trade Secrets 第十条 经营者不得采用下列手段侵犯商业秘密： Article 10: Business operators may not infringe trade secrets by any of the following methods: （一） 以盗窃、利诱、胁迫或者其他不正当手段获取权利人的商业秘密； (1) obtaining trade secrets of the party that has rights in such secrets by theft, enticement by promises of gain, duress or other unfair methods ; （二） 披露、使用或者允许他人使用以前项手段获取的权利人的商业秘密 ； (2) divulging, using oneself or allowing others to use trade secrets of the party that has rights in such secrets, where such trade secrets were obtained by any of the methods set forth in the preceding Item; or 11

商业秘密 — Trade Secrets Article 10: cont’d （三） 违反约定或者违反权利人有关保守商业秘密的要求，披露、使用 或者允许他人使用其所掌握的商业秘密。 (3) divulging, using oneself or allowing others to use trade secrets in one's possession, where such is in breach of an agreemen t or contrary to the confidentiality requirements of the party that has rights in the trade secrets. 第三人明知或者应知前款所列违法行为，获取、使用或者披露他人的商业 秘密，视为侵犯商业秘密。 Third parties that obtain, use or divulge trade secrets of others that they are well aware or ought to be aware to have been infringed by any of the methods set forth in the preceding paragraph shall be deemed to have infringed trade secrets. 12

商业秘密 — Trade Secrets 第二十五条 违反本法第十条规定侵犯商业秘密的，监督检查部门 应当责令停止违法行为，可以根据情节处以一万元以上二十万元 以下的罚款。 Article 25: If a trade secret is infringed in violation of Article 10 hereof, the supervision and examination authorities shall order the violator to cease the illegal act and may, depending on the circumstances, impose a fine of not less than Rmb 10,000 and not more than Rmb 200,000. (About $31,675.00 USD) 13

商业秘密 — Trade Secrets 中华人民共和国刑法 （ Criminal Law of the PRC ） 第二百一十九条 【侵犯商业秘密罪】有下列侵犯商业秘密行为之一，给商业秘密的权 利人造成重大损失的，处三年以下有期徒刑或者拘役，并处或者单处罚金；造成特别严 重后果的，处三年以上七年以下有期徒刑，并处罚金： Article 219 . Whoever engages in one of the following activities which encroaches upon commercial secrets and brings significant losses to persons having the rights to the commercial secrets is to be sentenced to not more than three years of fixed-term imprisonment , criminal detention, and may in addition or exclusively be sentenced to a fine ; or is to be sentenced to not less than three years and not more than seven years of fixed-term imprisonment and a fine, if he causes particularly serious consequences: 14

商业秘密 — Trade Secrets （一）以盗窃、利诱、胁迫或者其他不正当手段获取权利人的商业 秘密的； (1) acquire a rightful owner's commercial secrets via theft, lure by promise of gain, threat, or other improper means ; （二）披露、使用或者允许他人使用以前项手段获取的权利人的商 业秘密的； (2) disclose, use, or allow others to use a rightful owner's commercial secrets which are acquired through the aforementioned means; （三）违反约定或者违反权利人有关保守商业秘密的要求，披露、 使用或者允许他人使用其所掌握的商业秘密的。 (3) disclose, use, or allow others to use, in violation of the agreement with the rightful owner or the rightful owner's request of keeping the commercial secrets, the commercial secrets he is holding. 15

商业秘密 — Trade Secrets 明知或者应知前款所列行为，获取、使用或者披露他人的商业秘密的，以侵犯商业秘密论。 Whoever acquires , uses, or discloses other people's commercial secrets, when he knows or should know that these commercial secrets are acquired through the aforementioned means, is regarded as an encroachment upon commercial secrets. 本条所称商业秘密，是指不为公众所知悉，能为权利人带来经济利益，具有实用性并经权利人采 取保密措施的技术信息和经营信息。 The commercial secrets referred to in this article are technical information and operation information that are unknown to the public , can bring economic profits to their rightful owners, are functional, and are kept as secrets by their rightful owners. 本条所称权利人，是指商业秘密的所有人和经商业秘密所有人许可的商业秘密使用人。 The rightful owners referred to in this Article are owners of the commercial secrets and users who have the permission of the owners. 16