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Certain Regulations on Prohibiting Infringement of Commercial Secrets

Article 1 With a view of preventing the infringement of commercial secrets, protecting the legal rights and interests of the owners of commercial secrets and safeguarding the order of socialist market economy, these Regulations are formulated in accordance with the relevant provisions of the Law of the People's Republic of China for Countering Unfair Competition (hereinafter referred to as the Anti-Unfair Competition Law).

Article 2 The commercial secrets mentioned in these Regulations refer to practical information of technology and management that is unknown to the public, and able to bring economic benefits to the owners, and for which the owners have adopted security measures.

"Unknown to the public" mentioned in these Regulations refers to being unable to obtain directly through public channels.

Practical information that can bring economic benefits to the owners mentioned in these Regulations refers to the information with definite nature of practice which can bring real and potential economic benefits or competitive advantages for the owners. The security measures adopted by the owner, as stipulated in these Regulations, include signing a security agreement, setting up a security system and adopting other reasonable security measures.

Information of technology and management mentioned in these Regulations includes design, procedures, formula of products, process of production, manufacturing techniques and methods, management secrets, name lists of customers, information on resources, production and sales strategies as well as bottom price of a bid and the contents of a bidding document etc..

Owners mentioned in these Regulations refer to citizens, legal persons or other organizations with the ownership of commercial secrets.

Article 3 The following behaviors infringing upon commercial secrets are prohibited:

1) Obtaining commercial secrets by stealing, luring by promise of gain, coercing or other unjust means;

2) Revealing, using or allowing others to use commercial secrets obtained by means mentioned in the previous paragraph;

3) Units or individuals who have business relations with the owners of commercial secrets breach the contracts or violate the owners' requirements to reveal, use or allow others to use the commercial secrets obtained by them; and

4) The employees of the owners of commercial secrets breach the contract or violate the owners' requirements to reveal, use or allow others to use the commercial secrets obtained by them.

Behaviors of obtaining, using or revealing others' commercial secrets conducted by a third person who acknowledges or should acknowledge the illegal actions listed in the previous paragraphs shall be regarded as infringing upon commercial secrets.

Article 4 behaviors of infringement upon commercial secrets shall be confirmed and handled by the administrative authorities for industry and commerce at or above county level.

Article 5 The obligees (or applicants) should provide evidences concerning the existence of commercial secrets and infringement, if they believe their commercial secrets are infringed and apply for investigation to the administrative authorities for industry and commerce.

The units and individuals being investigated (or respondents), interested persons and witnesses shall provide relevant evidences to the administrative authorities for industry and commerce strictly according to the facts.

If the obligees can verify the identity and similarity between their own commercial secrets and the information used by the respondents as well as the existence of conditions for the respondents to obtain their commercial secret, while the respondents cannot provide or refuse to provide evidences in proof of their legal obtaining and using of information, the administrative authorities for industry and commerce shall recognize the infringement of the respondents based on the relevant evidences.

Article 6 After the obligees provide a written guarantees that they will accept the consequences of the coercive measures, the administrative authorities for industry and commerce may adopt the following measures upon the application of the obligees towards the illegal behaviors of revealing, using or allowing others to use the commercial secrets of the obligees which will cause irretrievable damages to the obligees:

1) To detain the drawings, software and other relevant data containing the commercial secrets obtained by the respondents from the owners through unjust means;

2) To order the respondents to stop selling the products produced using the obligees' commercial secrets.

Article 7 The administrative authorities for industry and commerce may, in accordance with the provisions of Article 25 of the Anti-Unfair Competition Law, order the units or persons in violation of Article 3 of these Regulations to stop the illegal acts, and impose a fine of more than 10,000 Yuan and less than 200,000 Yuan, according to the seriousness of the case.

When penalizing the violators according to the previous clause, the administrative authorities for industry and commerce may adopt the following measures towards the Articles related to the infringement:

1) To order and supervise the infringers to return the drawings, software as well as other related materials containing the commercial secrets to the obligees;

2) To supervise the infringers to destroy the products produced with the obligees' commercial secrets which will make the secrets known to the public once trading in markets, unless the obligees agree to adopt such measures as purchasing or selling those products.

Article 8 If the infringers refuse to execute the decision of penalty and continue to conduct the behaviors indicated in Article 3 of these Regulations, they shall be heavily penalized as undertaking new illegal activities.

Article 9 The administrative authorities for industry and commerce may conduct mediation if the obligees file such applications for compensation of damages.

The obligees may also sue to the people's court directly for compensation of damages.

Article 10 Government authorities and their civil servants are prohibited to reveal or allow others to use the commercial secrets of the obligees in performing official duties.

The investigators of the administrative authorities for industry and commerce should keep the commercial secrets of the obligees confidential in investigating activities of infringement of commercial secrets.

Article 11 The State Administration for Industry and Commerce is responsible for the interpretation of these Regulations.

Article 12 These Regulations shall go into effect on the day of their promulgation.

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