Author: Mao Lingjian

December 28, 2016

Abstract: Trade secrets, as an important intangible asset of enterprises, are composed of technical and operational information and are different from confidential information. Enterprises need to recognize and identify the three components of trade secrets: confidentiality, value, and confidentiality. The protection mechanism for trade secrets of enterprises should be set based on the legal level. The non disclosure of trade secret content does not hinder the declarability of trade secrets as a right. Enterprises can establish corresponding protection mechanisms based on different potential subjects of infringement of trade secrets based on the declaration of trade secret rights, in order to achieve effective protection of trade secrets of enterprises.

Keywords: Trade Secret Identification Rights Declaration Protection Mechanism

Trade secrets, as an important intangible asset of enterprises, have enormous economic and competitive value. At present, most countries and relevant international organizations have gradually established the legal protection of trade secrets [2], and even endowed them with strong protection of world rights as intellectual property [3]. However, due to the relatively abstract principles of relevant legislation and the confidentiality characteristics of trade secrets themselves, and the relatively weak awareness of trade secret protection among most domestic enterprise operators, It is not uncommon for many business operators to lose their competitive advantage when their trade secrets are violated, but they are at a loss.

Therefore, this article attempts to identify various types of information within enterprises based on the ontology of trade secrets, and then explores an effective path to protect enterprise trade secrets, in order to be helpful for enterprise operators in managing the important asset of trade secrets.

1、 Identification of Trade Secrets

Trade secrets, unlike other intangible assets of enterprises such as patents, trademarks, copyrights, etc., can be clearly disclosed through the confirmation of national public power. The confidential nature of trade secrets can only require their owners to make internal self judgments about possible trade secret information. Moreover, if trade secrets are infringed and seek judicial protection, it is often accompanied by a case by case confirmation of the right form of trade secrets themselves. Therefore, in order for enterprises to effectively protect trade secrets, they must first have a clear understanding of what "trade secrets" are and then identify which information belongs to the category of trade secrets.

（1） Definition of the concept of trade secrets

The relevant provisions on trade secrets in China are mainly found in Article 10, Paragraph 3 of the Anti Unfair Competition Law, which stipulates: "Trade secrets refer to technical and operational information that is not known to the public, can bring economic benefits to the rights holder, has practicality, and has been subject to confidentiality measures by the rights holder." Article 39 of the Trips Agreement also defines trade secrets (undisclosed information) [4] accordingly, However, the concept of trade secrets was not clearly defined. It only pointed out that trade secrets (undisclosed information) should have three constituent elements: confidentiality, commercial value, and the adoption of confidentiality measures (confidentiality or management), and clarified the subject and object of trade secrets.

Compared to the provisions on "undisclosed information" in the trips agreement, the definition of trade secrets in the Anti Unfair Competition Law also requires information to have the necessary feature of practicality, and the rest are basically consistent with the provisions of the trips agreement. However, both theoretical and practical circles now generally believe that the practicality of trade secrets is included in the element of value or can be absorbed by the element of commercial value. The Interpretation on Several Issues Concerning the Application of Law in the Trial of Anti Unfair Competition Disputes Cases issued by the Supreme Court in 2007 (hereinafter referred to as the "Interpretation of the Anti Unfair Competition Law") has identified "relevant information that has real or potential commercial value and can bring competitive advantages to rights holders" as "able to bring economic benefits and practicality to rights holders" as stipulated in Article 10 (3) of the Anti Unfair Competition Law, From this, it can be seen that in judicial practice, the requirement for the component of "practicality" in the determination of trade secrets has also been de emphasized. Therefore, when identifying trade secrets, we no longer need to consider the "practicality" of trade secrets, but only need to judge whether "technical information" and "business information" possess confidentiality, value, and confidentiality.

（2） Specific identification of trade secrets

1. On Confidentiality - Determination of Not Being Known to the Public

Not being known to the public is a prerequisite for identifying trade secrets, and it is the most fundamental attribute that distinguishes trade secrets from other intellectual property objects such as patents, trademarks, works, etc. Once a trade secret loses its confidentiality and becomes publicly known, it also loses its foundation as the protection of trade secrets. Article 9 (1) of the Interpretation of the Anti Unfair Competition Law stipulates that "relevant information that is not generally known and easily accessible to relevant personnel in its field shall be deemed as' not known to the public 'as stipulated in Article 10 (3) of the Anti Unfair Competition Law. Secrecy is an objective state where a trade secret is established as a form of information that is not commonly known and easily accessible. But the confidentiality here is relative, as long as the information is not publicly known, widely known, or understood in its field or industry, the value of the information can be sustained, and the confidentiality within this limit is sufficient to maintain the value of the information itself. [7]

Although secrecy exists as an objective state, if it is to be transformed into an objective state with legal significance, it must be judged by the corresponding subject. This raises the question of who makes the judgment and when, that is, how should the "public" referred to as "not known to the public" be determined? The information of trade secrets is not of value to any subject, just as Coca Cola's formula has great allure for operators in the beverage industry, but it may not necessarily have the same appeal for steel producers. Therefore, the value here should have a specific directionality, and its direction should be limited to competitors in related industries. This is also consistent with the provisions of Article 9, Paragraph 2 (1) of the Interpretation of Anti Unfair Law, This clause stipulates: "If one of the following circumstances occurs, the relevant information can be deemed to be known to the public: (1) the information is the general knowledge or industry practice of the person in the technical or economic field to which it belongs;" The technical or economic field here is clearly also targeted at personnel specialized in technical information and business information.

In addition, The "Interpretation of Anti Unfair Law" also lists other information deemed to be publicly known: "(2) the information only involves the size, structure, materials, simple combinations of components, etc. of the product; (3) the information should be publicly disclosed in public publications or other media; (4) the information has been publicly disclosed in public reports, exhibitions, etc.; (5) the information can be obtained from other public channels; (6) This information is easily obtained without a certain cost However, the confidentiality of trade secrets is not contradictory to the reasonable utilization of trade secrets. For example, the legitimate knowledge of employees, business partners, and other entities involved in confidential positions within the enterprise does not affect the loss of confidentiality.

2. On the Recognition of Value - Competitive Advantage

The value of trade secrets determines their property attributes. As an intellectual product, the formation of trade secrets is inevitably accompanied by corresponding investment and effort. It is the crystallization of the creator's hand and brain labor, containing necessary social labor value. Therefore, like tangible products, it can become the subject of property. [8] Of course, not all inputs and outputs in the process of information creation are effective. The value judgment of trade secrets should not be limited to the consideration of inputs and outputs, but should be based on whether the information holder can establish a competitive advantage. Our understanding of the value of trade secrets as a constituent element has gone through a process from ambiguity to clarity, from "being able to bring economic benefits to the rights holder"+"practicality" to a single "having commercial value" process. Competitive advantage, as a state of representing value, has gone through a process from being equivalent to value type to being a standard for judging whether it has value. [9] It is generally believed that the value of a trade secret refers to its ability to bring real or potential economic value to the rights holder through its current or future use. Its most essential feature is that its owner has a competitive advantage over competitors who do not possess the trade secret due to its possession. [10]

Therefore, when evaluating the value of relevant information, enterprises need to consider the following factors: 1. Whether the enterprise has invested financial and material resources in the possession of the information, which can be either a consideration for the transaction or a cost investment for the originality of the information; 2. Whether possessing this information can bring a corresponding competitive advantage to the enterprise, there is no quantitative requirement for this advantage. It can be either a huge economic benefit and competitive advantage, or a limited and small one, which can be sustained or one-time.

3. On Confidentiality - Determination of Confidentiality Measures

Confidentiality opens up the premise for information to be recognized as a trade secret, but the confidentiality of information as a trade secret must be a continuous state, and the continuity of confidentiality requires the existence of corresponding confidentiality measures. Since confidentiality is a relative state, the confidentiality measures to maintain confidentiality should also be relative. The purpose of setting confidentiality measures is not to fundamentally prevent the leakage of trade secret information, but to ensure the clear declaration of the rights enjoyed by the trade secret holder - the inviolability of the declared rights. Therefore, as long as preventive measures are taken to prevent others from obtaining the trade secret through normal means, it should be deemed that the confidentiality requirements have been met. As long as secrets are prevented from leaking by setting up confidentiality measures and mechanisms, there is a possibility of breaching confidentiality measures and violating confidentiality mechanisms. The cost of investing in unreasonable prevention measures may completely exceed the value inherent in trade secrets, which does not meet the requirements of a rational person under market economy conditions, It also deviates from the original intention of establishing a trade secret protection system. We cannot demand that someone or a company take reasonable preventive measures to prevent others from doing things that should not be done in the first place. Perhaps general fences and ceilings should be built to ward off incoming gaze, but we cannot demand that inventors of trade secrets be wary of unforeseeable, imperceptible, or unprepared existing espionage methods

Therefore, the provisions of Article 11 (1) of the Interpretation of the Anti Unfair Competition Law only require that "reasonable protective measures taken by the right holder to prevent information leakage that are appropriate to their commercial value and other specific circumstances" can be recognized as "confidentiality measures" stipulated in Article 10 (3) of the Anti Unfair Competition Law. At the same time, the second paragraph of this article stipulates: "The people's court shall determine whether the right holder has taken confidentiality measures based on factors such as the characteristics of the information carrier involved, the willingness of the right holder to keep confidential, the identifiable degree of confidentiality measures, and the difficulty of others obtaining them through legitimate means." Therefore, when determining whether the enterprise has taken confidentiality measures, it should pay attention to: 1. Subjectively, there should be a clear willingness to take measures to prevent secret leakage; 2. The confidentiality measures taken should be adapted to the specific circumstances such as the commercial value of the information, and should reach the minimum level of preventing unauthorized third parties from easily obtaining the information through normal means; 3. Confidentiality measures should be identified by the subject with confidentiality obligations. Of course, enterprises can also take more stringent protective measures, but this is only a need for self-protection, not a legal requirement for identifying trade secrets. Moreover, in the current situation where the overall level of relief for infringement of trade secrets is low and the cost of relief is high, it is entirely necessary for enterprises to invest more in factual protection.

（3） Trade secrets and confidential information

Trade secrets and confidential information, as two important types of information involved in the operation and management process of enterprises, are crucial for the normal operation and development of enterprises. As both exist in a certain state of secrecy, they are easily confused by enterprises, which may lead to incorrect protective measures and response strategies taken by enterprises in the specific management process, resulting in unnecessary investment and losses for enterprises, Based on the analysis of trade secrets mentioned above, the difference between the two should be well judged.

In a broad sense, secret information and trade secrets are a relationship of inclusion and inclusion. Trade secrets are necessarily a type of secret information, but not all secret information can become trade secrets (for the purpose of distinguishing between trade secrets and secret information, the secret information referred to in the following text only refers to secret information other than trade secrets).

Firstly, compared to confidential information, trade secrets have stricter identification standards and must undergo the "three qualities" of confidentiality, value, and confidentiality mentioned above. Confidential information does not have this requirement. Trade secrets are an objective existence that does not change their legal form due to the subjective perception of enterprise managers. Secret information is classified as confidential information as long as the enterprise managers do not want the information to be known to the outside world and take certain confidentiality measures to maintain its confidential status, depending on the subjective needs of the enterprise managers; Secondly, trade secrets are the object of intellectual property rights, and they are an intangible asset of the enterprise that can be invested as a form of capital when the company is established [12]. Confidential information does not have asset attributes, but can be negative or even illegal information that impairs the value of the enterprise. For example, in the case of Sanlu Group mixing melamine in milk powder, although its managers manage it as confidential information, But this information not only does not have any positive value in itself, but is also a negative and destructive information; Once again, from the perspective of legal protection intensity, in addition to independent protection by enterprises, trade secrets are strongly protected by the state through relevant laws and regulations such as the Anti Unfair Competition Law. The infringement of trade secrets itself is illegal and requires corresponding infringement liability, even criminal responsibility. However, confidential information can only be protected by the holder of the information on their own, and once obtained by others Leakage does not require legal liability, or at most it can be adjusted by contract law through agreement. It is a breach of contract liability or contracting fault liability [13], and some confidential information involving illegal activities is even encouraged to be obtained and disclosed by law. The legal status of the two cannot be compared.

Therefore, when setting up a protection mechanism for trade secrets, enterprises should first distinguish the relevant information based on the constituent elements of trade secrets, so as to formulate corresponding protection strategies and take appropriate protection measures. For trade secrets, it is necessary to consider both their self-protection needs in the management process and their legal need for intellectual property recognition. However, since confidential information can only be set up as self-protection, to some extent, it requires more detailed consideration and stronger protective measures by enterprises.

2、 Establishment of protection mechanisms for trade secrets by enterprises

Unless the owner of trade secrets insists on participating in modern market competition with a hands-on attitude, absolute protection of trade secrets is neither possible nor necessary. The legislative level has already set the final barrier for the protection of trade secrets, and the protection of trade secrets by enterprises can also be considered based on the confidentiality requirements of trade secrets at the legal level. [14] Therefore, this article only sets up corresponding systems to ensure that trade secret information can achieve legal protection of trade secrets to the minimum extent possible.

（1） Declaration of Trade Secret Rights - Based on Intellectual Property Properties of Trade Secrets

The adjustment of various laws such as the Contract Law, the Labor Contract Law, and the Fair Competition Law in China's legislation for the protection of trade secrets also indicates its controversial legal status. Fortunately, as an important embodiment of intellectual property rights, trade secrets have gradually become a common understanding. [15] However, due to the inherent confidentiality characteristics of trade secrets, the content of their rights can only be in a state of non disclosure or limited scope disclosure, making it difficult for the general public to grasp the specific boundaries of their rights, and others cannot, like trade secret rights holders, judge whether the information involved is a trade secret after a comprehensive examination and understanding of the trade secret, As a result, many people are still unaware of the boundaries of trade secrets even after they reach them. Therefore, if enterprises want to effectively protect trade secrets to prevent infringement by others, the first thing they need to do is to declare the right attributes and ownership of trade secrets to non rights holders of trade secrets.

Although trade secrets cannot be made public due to their confidentiality, it does not affect their existence to be publicly disclosed in an appropriate manner. Specifically, for enterprises, they should form tangible carriers of trade secrets and label them with different levels of confidentiality based on their importance, clarify the authority of relevant personnel to know the types and degrees of enterprise trade secrets, and strictly restrict the entry and exit of personnel in offices and other related confidential places where trade secrets are stored (including the setting of access control and restrictions on entry and exit permissions). For those who truly need to have access to trade secrets, only after informing them of their trade secret confidentiality responsibilities can they be made aware of specific trade secrets. [16] At the same time, establish a daily mechanism for publicizing trade secrets, and the human resources department regularly conducts enterprise trade secret identification and common sense training for employees at different levels, and keeps corresponding training content and attendance records.

（2） Specific Protection Measures for Trade Secrets - Based on Different Dimensions of Infringement Subjects

The infringement of trade secrets cannot be separated from the corresponding infringing parties, and the leakage or infringement of enterprise trade secrets, as well as the inability to provide effective relief after infringement, are all caused by negligence in the management of the corresponding potentially confidential parties. Article 10 of the Anti Unfair Competition Law recognizes four types of infringement of trade secrets: 1. Obtaining trade secrets from rights holders through theft, inducement, coercion, or other unfair means; 2. Disclose, use or allow others to use the aforementioned means to obtain the trade secrets of the rights holder; 3. Disclose, use, or allow others to use the trade secrets they hold in violation of the agreement or the requirements of the rights holder. 4. The third party obtains, uses, or discloses the trade secrets of others, knowing or should be aware of the illegal acts listed in the preceding paragraph. Based on the extent of a company's management capabilities, we differentiate it into infringement of trade secrets by employees and infringement of trade secrets by non employees. The prevention of trade secrets by companies should also be mainly based on the scope of their management capabilities. Therefore, the author mainly sets up mechanisms for protecting trade secrets by targeting employees and non employees (external entities of the company) separately.

1. Protection against infringement of trade secrets by enterprise employees.

Compared to external personnel of the enterprise, employees are either the holders of trade secrets themselves or at least have more opportunities and opportunities to learn about the company's trade secrets. Many cases of trade secret infringement are also caused by improper or illegal behavior of employees, which makes external personnel attempt to obtain the company's trade secrets. Without the assistance of employees, it is often difficult to succeed. Therefore, such entities should also be the focus of enterprise trade secret protection. Based on whether the subject holds or has the right to hold business secrets of the enterprise, the author will discuss them separately as classified employees and non classified employees.

(1) Classified employees

Classified employees include senior management personnel of the enterprise and employees in general classified positions. Due to the fact that such employees are directly aware of the company's trade secrets, according to the provisions of the Labor Contract Law, enterprises can directly establish trade secret confidentiality clauses and make non compete agreements when hiring such employees. Moreover, the signing of confidentiality agreements is also an important condition for determining the confidentiality of trade secrets [17].

Senior management personnel are at the top of the enterprise, and due to operational needs, they are inevitably required to master more trade secrets. They may also be managers of trade secrets themselves. Due to their special status, the enterprise's trade secret protection system and measures are easily avoided or violated. Therefore, in addition to declaring the right to trade secrets, the protective enterprises of such entities are mainly regulated by confidentiality agreements and non compete clauses.

Generally, employees in classified positions are divided into creators of trade secrets and users of trade secrets. The former mainly refers to the technical research and development personnel and market intelligence personnel of enterprises, while the latter mainly refers to the technical users and ordinary market sales/procurement personnel of enterprises. For enterprise technology research and development personnel and market development personnel, as they are often the initial holders of trade secrets, they have a more accurate grasp of trade secrets than other employees. In addition, the current legislation on the ownership of trade secrets is not clear, which makes them more likely to cause infringement on enterprise trade secrets. Although provisions have been made in the Patent Law, Copyright Law, and other laws regarding the ownership of job achievements, and some trade secrets themselves overlap with job inventions and job works, a large number of trade secrets are not covered by job inventions and job works, and their ownership has not been clearly adjusted by legislation. Therefore, for such personnel, the first consideration should be to clarify the ownership of trade secrets, Civil rights are based on the principle of free disposal, and enterprises can directly specify in the relevant provisions of labor contracts that the ownership of trade secrets created by employees during their tenure belongs to the enterprise. In order to minimize disputes as much as possible, enterprises should also require written records and reports of each trade secret generation process during the employment period, and clearly confirm the results of specific trade secrets. Of course, this is also a necessary measure to declare the ownership of trade secrets. In addition, when such employees resign, they should confirm the trade secrets that they know or may know about their positions, and evaluate the potential impact of their knowledge of the confirmed trade secrets on the enterprise, in order to decide whether to comply with the non compete clause.

For users of trade secrets, there are generally no disputes that may arise due to disputes over the ownership of trade secrets. However, when enterprises disclose trade secrets to them, they should confirm the scope of the trade secrets they are informed of, such as by email, signing notification documents, etc., and confirm their knowledge of the trade secrets in writing upon resignation, informing them of their obligations and responsibilities to keep trade secrets confidential, At the same time, it is determined whether to comply with the non compete clause based on the scope of trade secrets it knows.

(2) Non classified employees

Enterprises often stipulate that such employees do not have the authority to know trade secrets. However, compared to personnel outside the enterprise, such employees have more opportunities and convenience to access the trade secrets of their own enterprise. As long as the enterprise effectively implements the trade secret disclosure system, it is sufficient to initiate legal liability proceedings in the event of improper acquisition, disclosure, or use of enterprise trade secrets.

2. Protection against infringement of trade secrets by external entities of enterprises

(1) Business partner

The development and even decline of enterprises will involve consultation and cooperation with other business partners. In the process of consultation and cooperation between enterprises and other business partners, mutual communication and exchange of information are inevitable. When necessary, even the disclosure of trade secrets may be provided voluntarily by enterprises or at the request of partners. According to Article 43 of the Contract Law, "The parties shall not disclose or improperly use the trade secrets that they became aware of during the process of concluding the contract, regardless of whether the contract is established or not. If the disclosure or improper use of the trade secrets causes losses to the other party, they shall be liable for damages." However, when determining the confidentiality requirements of the trade secrets involved, Article 11 (3) of the Interpretation of the Anti Unfair Competition Law stipulates that in addition to whether the enterprise and the other party have "signed a confidentiality agreement" or "proposed confidentiality requirements", it also depends on whether the enterprise "limits the scope of knowledge of confidential information and only informs relevant personnel who must be aware of it". Therefore, if a company needs to disclose trade secrets during negotiations or cooperation with other companies, it should sign a confidentiality agreement or propose confidentiality requirements with the other party, and clarify in writing the scope of knowledge and personnel of the disclosed information.

(2) Non commercial partners

In the process of non commercial contact between enterprises and their local authorities, local governments, intermediaries, and other non commercial entities, there may be situations where they have to disclose trade secrets. Although relevant laws in China have stipulated that these entities have confidentiality obligations for trade secrets, it is not always possible to make accurate judgments about whether the enterprise information they know is a trade secret for these non commercial entities, Enterprises should adopt a similar approach to paying attention to their business partners to clearly remind them of the disclosed trade secrets. Otherwise, due to the lack of confidentiality requirements for trade secrets, even if these institutions unintentionally disclose the company's trade secrets, it is difficult to identify them as infringing on the company's trade secrets and provide legal remedies, resulting in irreparable losses for the enterprise.

(3) Non cooperative entities

Non cooperative entities may be either competitors of the enterprise or unrelated market entities. The competitors of enterprises are the biggest threat to the infringement of trade secrets, and the infringement of trade secrets by enterprise employees can only be transformed into real benefits from the competitors. They are a main driving force for enterprise employees to infringe on trade secrets, and enterprise competitors often obtain trade secrets through the actions of employees (or business spies) who have the right to trade secrets. Therefore, The primary consideration for enterprises to protect their competitors is to start with the protection and management of trade secrets for internal employees, in order to prevent them from being obtained from the company's employees. Unrelated market entities often do not have the endogenous power to infringe on enterprise trade secrets. Therefore, the protection of such entities mainly focuses on the right declaration and daily management of trade secrets, to prevent unintentional information leakage. Even if such entities leak trade secrets due to fault, they can effectively provide remedies for their rights.

3、 Conclusion

The significance of trade secrets as an important enterprise asset lies in the fact that the owner of trade secrets can ensure the continuity of their market competitive advantage compared to competitors by monopolizing the trade secrets in fact. Although trade secret rights, like patent rights, trademark rights, and copyrights, are subject to negative evaluation and corresponding legal liability by the law after infringement, they are only a form of post infringement relief. Unlike patents, trademarks, and works that do not cause any damage to the essence of the right after the infringement is excluded, the damage to trade secrets is often not repairable, because, The infringement of trade secrets is inevitably accompanied by a relative weakening of their confidentiality, and the burden of infringement liability and the cessation of infringement cannot restore the rights holder to their de facto monopoly on trade secrets. At the same time, the ownership of trade secrets itself also faces the constant threat of legitimate means from competitors - independent research and development or reverse engineering. Therefore, after correctly identifying trade secrets, in addition to continuing to protect them in the form of trade secrets, enterprises can consider protecting trade secrets that are patentable but highly susceptible to legal infringement through patents, which are an open monopoly.

Comment:

[1] Feng Xiaoqing: "Enterprise Intellectual Property Management", China University of Political Science and Law Press, 2012 edition, page 330.

[2] Kong Xiangjun, editor in chief: "Practice of Judicial Protection of Trade Secrets", China Legal Publishing House, 2012 edition, page 3.

[3] Liu Chuntian, Zheng Xuanyu. Legal Analysis of Trade Secrets. Jurist. Issue 3, 2004, p.109

[4] Kong Xiangjun: "Judicial Protection Practice of Trade Secrets", China Legal Publishing House, 2012 edition. In the preface, it is pointed out that "the trips agreement uses the concept of 'undisclosed information' to refer to trade secrets and protects them as an independent category of intellectual property rights ­。”

[5] Kong Xiangjun: "Judicial Protection Practice of Trade Secrets", China Legal Publishing House, 2012 edition, page 113.

[6] Xu Xingxiang and Xu Chuncheng: "The Value Elements of Trade Secrets", Journal of Southwest University for Nationalities (Humanities and Social Sciences Edition), 2012, Issue 3, p. 93.

[7] Kong Xiangjun, editor in chief: "Judicial Protection Practice of Trade Secrets", China Legal Publishing House, 2012 edition, pages 123-127.

[8] Feng Xiaoqing: "Intellectual Property Law and Philosophy". China People's Public Security University Press, 2003 edition. Page 48

[9] Xu Xingxiang and Xu Chuncheng: "The Value Elements of Trade Secrets", Journal of Southwest University for Nationalities (Humanities and Social Sciences Edition), 2012, Issue 3, p. 91.

[10] Peng Xuelong: "Identification of Trade Secret Properties on Customer List Based on the Latest US Cases", Intellectual Property, 2013, Issue 1, p. 59.

[11] Li Mingde: "DuPont Company v. Christopher," Foreign Law Translation Review, 2000, Issue 3 (cited by Peng Xuelong: "Determination of the Nature of Trade Secrets on Customer Lists from the Latest US Cases," Intellectual Property, 2013, Issue 1, p. 60)

[12] Article 27, Paragraph 1 of the Company Law states that shareholders may make capital contributions in currency, as well as in tangible goods, intellectual property, land use rights, and other non monetary assets that can be valued in currency and transferred in accordance with the law

[13] Zhang Hong: "Research on the Legal Application of Confidentiality Obligations in Contract Negotiations - Centered on Article 43 of the Contract Law of the People's Republic of China", Legal and Commercial Research, 2012, Issue 2, pp. 140 and 146.

But this is an exploration from a technical and management perspective, which is no longer within the scope of this article.

[15] Ji Mingxia and Peng Xuelong: "The Intellectual Property Attribute of Trade Secrets - Also on the Nature of Intellectual Property", Journal of Zhongnan University of Economics and Law, No. 4, 2002, pp. 87-88.

[16] Feng Xiaoqing: "Enterprise Intellectual Property Management", China University of Political Science and Law Press, 2012 edition.

[17] Article 11 (3) of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases of Unfair Competition (Fa Shi [2007] No. 2) stipulates that "if one of the following circumstances is sufficient to prevent the leakage of confidential information under normal circumstances, the right holder shall be deemed to have taken confidentiality measures: (5) sign a confidentiality agreement;" However, the author believes that the confidentiality agreement here should not be just a general confidentiality obligation setting, And it should be a special agreement regarding a specific trade secret, or at least the confidentiality content agreed upon in the agreement is determined. Because the purpose of "taking confidentiality measures" is not so much to protect trade secrets as to declare a trade secret right to others. Therefore, even if the enterprise and employees have signed a general agreement to protect trade secrets, the nature of trade secrets should still be clearly disclosed during the specific process of trade secret disclosure.