Recently, the Supreme People’s Court resolved a dispute over technical secret infringement, specifying the differences in judgment standards for the confidential nature of certain technical information and for patent novelty and inventiveness. This case is significant to correctly understanding and assessing whether technical information has the confidential nature as a trade secret.
This case is one of series cases of disputes over patent ownership and technical secret infringement between Zhejiang A Company and B Company. Zhejiang A Company claimed in this case that two technical managers left Zhejiang A Company and joined B Company’s affiliate in the same month and then joined B Company 4 months later when B Company was established; 5 months after their resignations, they filed a utility model patent application in the name of B Company for the R&D achievements of Zhejiang A Company (the disputed patent), which was later granted and disclosed. Zhejiang A Company claimed that B Company and the two former employees infringed on Zhejiang A Company’s technical secrets, requesting B Company and the two former employees to jointly compensate for economic losses and reasonable expenses. And the disputed patent was declared invalid in the first instance due to an invalidation request filed by a third party.
In the first instance, the court deemed that the 5 secret points in the disputed technical secret claimed by Zhejiang A Company did not have confidential nature and thus refused the claims of Zhejiang A Company. Zhejiang A Company was dissatisfied and appealed, claiming that determining the actual losses it suffered and the profit gained B Company from the infringement is challenging. Zhejiang A Company requested the court to confirm the compensation amount through applying for statutory compensation.
In the second instance, the Supreme People’s Court deemed that the standards for judging whether certain technical information has confidential nature as technical secrets and those for judging the patent’s novelty and inventiveness are different. In addition, the court further established that absence of novelty or inventiveness in the patent's technical solution on the filing date (or priority date) in comparison to prior arts does not necessarily mean that the technical information contained in the technical solution was commonly known or could be easily obtained by those skilled in the art when the accused infringement happened.
In this case, the disputed technical information is mainly recorded in specific embodiments in the description and the attached drawings, and the claims of the disputed patent only reflected partial technical secrets. The judgment on the novelty and inventiveness of the claims in the invalidation decision for the disputed patent does not necessarily affect the judgment of whether the disputed technical information has confidential nature.
Upon comparison, it was found that the evidence submitted by B Company has disclosed technical information secret points 2-4 claimed by the patentee, but it did not explicitly disclose secret point 1, and secret point 5 remains undisclosed. While secret point 5 is a combination application of secret points 1-4, none of the evidence provided by B Company proved any prior art disclosing all technical information of secret points 1-4. The combination application of secret points 1-4 is not a mere stacking of information but forms an integral whole with certain business value. This was developed by Zhejiang A Company through research and development, and others cannot obtain it directly without a certain level of effort and investment. Therefore, secret point 5 is not commonly known or can be easily obtained by those skilled in the art, but has confidential nature and constitutes trade secrets as stipulated in the Anti-Unfair Competition Law.
Where the two former employees, in violation of confidential obligation, disclosed the disputed technical secrets acquired during their tenure at Zhejiang A Company to B Company, facilitating B Company’s filing of a patent application for the disputed technical secrets. Despite being aware of the two people’s said acts, B Company proceeded to obtain the disputed technical secrets and file the disputed patent application. In such circumstances, B Company and the two former employees constitute joint infringement and shall bear joint liability accordingly.
The Supreme People’s Court ordered B Company and the two former employees to jointly compensate Zhejiang A Company for economic losses and reasonable expenses after comprehensively consider the inventive extent, business value, R&D investments of the disputed technical secrets, the subjective fault of B Company and the two former employees and the nature and circumstance of the infringement, the effect of the disclosure of the disputed technical secrets on the competitiveness of Zhejiang A Company, and Zhejiang A Company’s evidence collection and entrusting lawyers for attending lawsuits.
(2022) Zui Gao Fa Zhi Min Zhong No. 2501
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