Even if the parties concerned have reached an agreement on the constitution of technical secrets, ownership, infringement, and responsibility by means such as signing a settlement agreement, in subsequent dispute cases, the People's Court shall still examine and determine whether the technical information claimed by the parties constitutes technical secrets as prescribed by Anti-Unfair Competition Law.
Hangzhou A Company claims to own the technical secrets related to the structure of the oscillating feeder. The defendant, Hangzhou B Company and three natural persons, signed a settlement agreement with Hangzhou A Company for infringing its business secrets, in which the defendant acknowledged the infringement and promised not to infringe on the intellectual property rights of Hangzhou A Company again, otherwise, they will pay Hangzhou A Company a penalty of 5 million yuan. Subsequently, the defendant Hangzhou B Company and the three natural persons filed patent applications for drawings stolen from Hangzhou A Company. Therefore, Hangzhou A Company requested the court to order the four parties (the defendant) to jointly pay a penalty of 5 million yuan and 20,000 yuan as reasonable expenses for right protection.
Hangzhou B Company and the three natural persons counterclaimed that the technical information claimed by Hangzhou A Company does not constitute technical secrets, as it has been disclosed by prior patents and physical products. The patent applied by Hangzhou B Company is different from the technical information claimed by Hangzhou A Company. Hangzhou B Company and the three natural persons have not breached the settlement agreement, and according to the agreement, Hangzhou A Company shall return the deposit totaling 200,000 yuan and the agreed interest.
The first-instance court held that given the existence of the settlement agreement between Hangzhou A Company and the defendant, Hangzhou B Company and the three natural persons, Hangzhou A Company can be exempted from the burden of proof regarding the confidentiality of the technical information it claimed. The patent applied by Hangzhou B Company discloses two secret points in the technical secrets claimed by Hangzhou A Company, constituting a breach of the agreement. However, the patent application of Hangzhou B Company has nothing to do with the three natural persons. Therefore, the first instance civil judgment was made to: request Hangzhou B Company to pay Hangzhou A Company a penalty of 4 million yuan; request Hangzhou A Company to refund the deposit of 50,000 yuan to each of the three natural persons respectively, and pay interest generated from July 1, 2017 to the date when the money is actually paid off at the rate of the three-year fixed deposit interest rate of the bank in this corresponding period; reject the other claims of Hangzhou A Company; and reject the counterclaim of Hangzhou B Company. Hangzhou B Company was dissatisfied and filed an appeal. The Supreme People's Court made the final civil judgment on June 5, 2023, to reject the appeal and uphold the original judgment.
The court's effective judgment holds that, although this case is determined as a contract dispute, the legal relationship that triggered the dispute between the two parties is whether Hangzhou B Company et al. have infringed upon the technical secrets of Hangzhou A Company and whether Hangzhou B Company et al. shall bear the corresponding liability for breach of contract in accordance with the settlement agreement between the two parties. Therefore, the preliminary issue of the case is whether Hangzhou B Company has disclosed and infringed upon the technical secrets of Hangzhou A Company.
The technical secret protected by the Anti-Unfair Competition Law shall have three elements: unknown to the public, of commercial value, and the right holder has taken corresponding confidentiality measures. After examination, it is sufficient to conclude that the oscillating feeder carrying the technical information of Hangzhou A Company is not sold in the market, but it can improve the packing efficiency and reduce the packing cost for the company's production process of inflatable protective films, thus winning the advantage for Hangzhou A Company in the competition with its peers including Hangzhou B Company. Therefore, the technical information claimed by Hangzhou A Company has commercial value. Meanwhile, Hangzhou A Company put forward confidentiality requirements for the drawings with its technical information by signing confidentiality agreements with its employees, which constitutes the confidentiality measures taken by the company for its technical information. In addition, the technical contents related to the position of the roller and the specific connecting structure of the crank and connecting rod for realizing the reciprocating motion of the oscillating plate claimed by Hangzhou A Company are not reflected in the prior patent, and the public cannot obtain the technical contents by searching prior patent documents. Therefore, the above two pieces of technical information claimed by Hangzhou A Company constitute technical secrets protected by the Anti-Unfair Competition Law.
The patent involved in the case applied by Hangzhou B Company discloses the technical secrets enjoyed by Hangzhou A Company on the position of the roller and the specific connecting structure of the crank and connecting rod. There is nothing inappropriate for the first instance judgment to determine that the aforementioned disclosure of Hangzhou B Company constitutes a breach of the settlement agreement, and that Hangzhou B Company is liable for breach of contract.
(2021) Zui Gao Fa Zhi Min Zhong No. 1530
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