Research On Boundaries Of Confidentiality Obligation In Trade Secret Protection

The Competition Law of the People’s Republic of China(hereinafter referred to as the “Competition Law”)was revised in 2019.The “disclose,use or allow others to use an obligee’s trade secrets in breach of an agreement or the obligee’s requirements on keeping such trade secrets confidential” in Article 9,Paragraph 1,Item 3 has been revised to “violate confidentiality obligation or violate a rights holder’s requirements on keeping confidentiality of commercial secrets,and disclose,use or allow others to use such commercial secrets they obtained.” The concept of confidentiality obligation has been officially introduced into the trade secrets protection.However,there are still many disputes on whether the boundaries of confidentiality obligation should be expanded and to which extent it should be expanded.The first chapter of the thesis covers the existing disputes on the boundaries of the confidentiality obligation of trade secrets.Firstly,the value of the confidentiality obligation in trade secrets protection has been ignored in the past judicial practice.It is related to the dispute over the nature of trade secrets.After this revision,the role of confidentiality obligation in the protection of trade secrets needs to be clarified.To be more specific,the impact of the nature of trade secrets on the boundaries of the confidentiality obligation should be figured out.The basic theory of the confidentiality obligation needs to be clarified.Secondly,the reasonableness of the expanding the boundaries of the confidentiality obligation needs to be further proved.Thirdly,the rules of determining the boundaries of the confidentiality obligation still need to be improved.For example,more factors should be taken into consideration to determine the confidentiality obligation,and more defense rules for breach of the confidentiality obligation should be added into the statue.The second chapter of the thesis focuses on the basic theory of determining the reasonable boundaries of the confidentiality obligation.Considering the background of the formulation of the relevant provisions,international treaties and foreign legal practice,it is clear that trade secret is a kind of legal interest.Violating the obligation of confidentiality,or the impropriety of business behavior should be the origin of triggering trade secret protection,which can provide a value orientation for the reasonable boundaries of confidentiality obligation.As for the specific basic theory of the confidentiality obligation,there are mainly three types: “contractual obligation theory”,“trust theory” and “competition theory”.This thesis analyzes the limitations of“contractual obligation theory” and choose to combine the “trust theory” and the“competition theory” as the theoretical basis for the determination of confidentiality obligation boundaries.This combination will help practitioner determine the boundaries of the confidentiality obligation.The third chapter of the thesis mainly discusses the reasonableness of the expansion of the confidentiality obligation.Firstly,The incomplete contract theory discusses the defect of relying only on statutory and agreed confidentiality obligations to protect trade secrets from the three aspects: contractual incompleteness,strategic defection and the serious limits of court ordering.This section justifies the introduction of the implied confidentiality obligation.Secondly,the next section demonstrates that the reasonable expansion of the boundary of confidentiality obligations meets the economic requirements behind the trade secrets protection.This section clarifies the incentive system established by the existing trade secret protection,and the reasonable expansion of the boundaries of confidentiality obligation can play a positive role in the incentive mechanism in terms of resource allocation and application.The fourth chapter of the thesis explores the determination of reasonable boundaries of confidentiality obligation,which are mainly divided into the reasonable boundary determination of employees’ confidentiality obligation and the reasonable boundary determination of non-employees’ confidentiality obligation.Regarding the determination of the boundary of the employee’s confidentiality obligation,it is clear that the employee’s freedom of employment and the employer’s trade secret interest need to be balanced through the determination of the employee’s confidentiality obligation.The scope of the subject matter should be further clarified.The relevant rules of the residual knowledge exception are helpful to balance the interests between employees and employers.Regarding the determination of the boundary of nonemployer’s confidentiality obligation,the implied confidentiality obligation should be presumed based on the standard of “reasonable recipients”.After the trade secret loses its secrecy,an injunction to eliminate competitive advantage can be set to punish the malicious competitors.The exceptions also should be set for the determination of nonemployees’ confidentiality obligations so as to prevent improper expansion of the boundary of confidentiality obligation.