Trade Secrets A Criminal Protection Study

With the globalization of the economy and the intensification of marketcompetition, trade secret has more and more become a key factor whichmay bring to its owner enormous benefit and advantage over thecompetitors. One result brought about by such passion is the massoccurrence of infringements of trade secrets. As a result, criminal lawhas become an important tool for the protection of trade secrets.Offense against trade secrets was for the first time included in 1997 PanelCode as a crime and comparatively severe penalty was imposed thereon.However, in retrospect of the judicial history of China, I found that, onthe one hand, infringements of trade secrets have kept increasing yearafter year, which have caused huge losses to the proprietors;on the otherhand, the number of cases in which the infringers were held liable and theprobability of success of plaintiffs in these cases were comparatively low.Reasons for such paradox, based on my research in this area, may include(i) the provisions of current Panel Code with respect to offense againsttrade secrets is ambiguous, which has given rise to split of authority inthis regard;(ii) the match between offense and penalty is so defective thatit's difficult to achieve its aim of preventing crimes;and (iii) there is nocorresponding measures during the proceedings to protect the tradesecrets from being disclosed. The direct result caused by such defects isthat criminal law fails to provide adequate protection to owners of tradesecrets. This article focuses on the protection of trade secrets through criminalprocedure, taking into account the offense against trade secrets undercurrent Penalty Code and advanced legislations of other countries in thisarea, in combination with the judicial practice of China, makescomprehensive analysis of offenses against trade secrets and provideslegislative suggestions thereon.This article consists of six parts. The first part is a generalintroduction of the criminal protection of trade secrets, dealing with suchissues as the legal basis for such protection, the necessity to put tradesecrets under the protection of criminal law, legislations of other countries,Taiwan and Chinese mainland in this regard and their respectivecharacteristics. The second part discusses elements of offense againsttrade secrets, including the offenders, objective, mens rea and actus reus,and points out the legal basis for the protection of trade secrets from theperspective of elements of crime. The third part focuses on keyproblems in relation to the judicial practice involving offenses againsttrade secrets which are likely to lead to confusion or divergence ofopinions, such as the determination of the "material losses", the actusreus, and the border between offense against trade secrets and othercrimes. The fourth part discusses the match between offense againsttrade secrets and its penalty, based on research of laws both of China andother jurisdictions, accordingly points out the defect of Chinese criminallaw in this regard and gives legislative suggestions thereon, e.g., addingnew penalty such as fine and penalty based on the offender's identity orqualification, perfecting or establishing a match under Penal Code or inChina's judicial system which accurately reflects such offense'sharmfulness to the society for the purpose of controlling and preventingcrimes and protecting trade secrets. The fifth part deals with criminalprocedures involving offenses against trade secrets, focusing on issues asto how to protect trade secrets through criminal proceedings and in thecourse of such procedure, including burden of proof, civil procedureincidental to criminal procedure, the manners of prosecution, and makessuggestions as to the protection of trade secrets during the criminalprocedure. The last part gives comprehensive legislative suggestions onpreventing offenses against trade secrets on the basis of analysis fromboth substantial and procedural perspectives.