The Supreme People's Procuratorate and the Ministry of Public Security have recently issued the Decision of the Supreme People's Procuratorate and the Ministry of Public Security on Revising the Standards for the Filing and Prosecution of Trade Secret Infringement Criminal Cases (the "Notice")

Circumstances under which the trade secret infringement cases shall be filed and prosecuted are revised in the Notice as below:

1. the amount of losses caused to the trade secret holder is over CNY300,000;
2. the amount of illegal gains from the trade secret infringement is over CNY300,000;
3. The infringer directly causes the trade secret holder to go bankrupt or shut down due to any major business difficulty; or
4. Other circumstances under which heavy losses are caused to the trade secret holder.

The Notice also specifies six methods of identifying the amount of the aforesaid losses or illegal gains, and the methods of determining losses of sales profits caused to the right holder due to the infringement.

1. if a rights holder's trade secret is acquired by illegal means but has not yet been disclosed, used or allowed for use by others, the amount of loss may be determined based on the reasonable royalty for the trade secret;
2. if a rights holder's trade secret has been disclosed, used or is allowed to be used by others after being acquired by illegal means, the amount of loss may be determined based on the loss of sales profit caused to the rights holder due to infringement, and if it is lower than the reasonable royalty for the trade secret, be determined based on such royalty;
3. if any trade secret grasped is disclosed, used or allowed to be used by others in violation of stipulations or the rights holder's relevant requirements for keeping trade secrets, the amount of loss may be determined based on the loss of sales profit caused to the rights holder due to infringement;
4. if any trade secret is acquired knowingly by illegal means, or is disclosed or allowed to be used in violation of stipulations or the rights holder's relevant requirements for keeping trade secrets, the amount of loss caused due to acquisition, use or disclosure thereof may be determined based on the loss of sales profit caused to the rights holder due to infringement;
5. where any trade secret has become known to the public or lost as a result of trade secret infringement, the amount of loss may be determined based on the trade secret's commercial value, which may be determined through taking into comprehensive consideration such factors as the R&D costs and the proceeds derived from implementing the trade secret; and
6. Property or other property benefits derived from disclosing or allowing others to use any trade secret shall be identified as illegal gain.

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