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China Intellectual Property Protection - Trade Secret Or Patent?

Trade secret law in China is not as strong as patent law. As experienced China trade secret lawyer, we experienced many cases that the court even is reluctant to accept appropriation of trade secret case.  However, You can establish a trade secret overnight, but not a patent.  A patent takes longer.  And, even if you could, would it really provide much protection against copying by distributors, retailers, developers, or investors?  Here's a surprisingly useful answer.

A trade secret has some big advantages.  It is effective against anyone you have direct dealings with.  The damages for a trade secret violation are not limited to direct damages – they can be large enough to justify legal action against even a small or token violation.  This is very unlike a patent, where it is necessary to show actual, direct damages; those damages tend to be somewhat small; and where it can be quite difficult to obtain punitive damages.

So, why isn't there a “trade secret” office?  And, why doesn't everyone go after a trade secret first, instead of a patent?  Excellent questions.  A patent protects your invention after it is no longer secret, and it affects strangers who may innocently infringe patent rights.  So, a patent is very worthwhile, once you've gotten a good start.  But until then, all you really have going for you are your trade secret rights.

Let's see why there's no “trade secret” office.  First, you can easily establish your trade secret rights yourself.  How?  Start by documenting the materials you regard as your trade secret, and mark the pages “confidential.”   You can just mark the cover page as confidential, but more is better.  Whenever you show the materials to anyone, document that: write a note to yourself stating who saw the materials and when they saw them; and put a copy of the exact materials shown in an envelope.  If you have witnesses, write down their names.  If there were telephone calls or emails, note those; and so on.

Also, a pending patent application serves as an excellent documentation of a trade secret.  It is relatively easy to have a pending patent application admitted in evidence since the patent office can provide a certified copy to the court.  Also, patent trials tend to be long and costly, whereas trade secret trials have the potential to be shorter.  Specific cases can vary greatly, though.

If you believe someone has misappropriated your idea, business method, or marketing idea, perhaps it is time to consult an attorney who understands intellectual property law, and particularly one who has at least some understanding of how courts enforce trade secrets.  Here's a tip: it is very likely to help if your attorney has litigation experience; many issues that arise are evidentiary in nature.

China intellectual property enforcement is not very powerful. Think twice when you are doing to disclose your trade secret to Chinese suppliers. A non-disclosure agreement is strongly advised.

 

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I am a licensed China lawyer. Most clients are foreign nationals and companies. China Lawyer Blog have associates in Beijing, Shanghai, Tianjin, Guangzhou, Suzhou, Nanjing, Qingdao, Fuzhou, Hainan, Hefei, Wuhan, Xian, Changsha, Xiamen and Hangzhou. Learn More

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