W&H Law Firm

A Legal Examination Based on Legislative Norms and Law Enforcement Practices (Author: WANG Guixiang, partner of W&H Law Firm)   Abstract Against the backdrop of the digital economy and innovation-driven development strategies, trade secrets have become critical intangible assets for enterprises to maintain competitive advantages and achieve sustainable innovation. Administrative protection, characterized by efficient investigation, simplified procedures, timely remedies, and strong preventive functions, holds an irreplaceable position in the trade secret protection system. Based on the Anti-Unfair Competition Law of the People's Republic of China, and taking into account the forthcoming Provisions on the Protection of Trade Secrets effective 1 June 2026, as well as local regulations and normative documents from Hefei, Jiangxi, Pudong, Wenzhou, etc., this article systematically reviews the legislative framework, enforcement practices, institutional progress, and existing shortcomings of China's administrative protection of trade secrets. Through empirical analysis of typical administrative enforcement cases, the article summarizes the overall trends and directions for improvement, aiming to provide theoretical reference for building a more systematic, professional, and efficient administrative protection system for trade secrets. Keywords: Trade Secrets; Administrative Protection; Administrative Enforcement   I. Introduction As innovation factors become increasingly prominent in market competition, the scope of trade secret protection has expanded from traditional technical drawings and customer lists to new types of intangible assets such as data, algorithms, and AI models, making trade secrets an important carrier of enterprise core competitiveness. Given the lengthy civil litigation cycles, difficulty in evidence gathering, and high thresholds for criminal protection, administrative protection can provide efficient relief to rights holders through rapid investigation, evidence preservation, and timely injunctions. In recent years, China has continuously strengthened the institutional supply for administrative protection of trade secrets, gradually forming a relatively complete regulatory system from top-level legislation to local practices. Administrative enforcement efforts have intensified, case types have diversified, and the protection model is gradually transitioning towards full-chain, professional, and digital approaches. This article provides a comprehensive analysis of the current situation, progress, deficiencies, and trends of administrative protection of trade secrets in China, based on existing legal norms and enforcement practices.   II. Legislative Framework for Administrative Protection of Trade Secrets in China China has established a multi-level normative system for administrative protection of trade secrets, with laws as the foundation, departmental rules as the core, local regulations as support, and collaboration mechanisms and industry guidelines as supplements, enabling the protection rules to evolve from general principles to detailed provisions and from a single approach to a systematic one. At the national legislative level, Article 10 of the Anti-Unfair Competition Law of the People's Republic of China defines the constituent elements of trade secrets and the types of acts prohibited, while Article 26 provides a graded range of administrative penalties, offering a superior legal basis for administrative enforcement. The Provisions on the Protection of Trade Secrets, effective 1 June 2026, serve as a specialized enforcement basis, comprehensively detailing the identification of trade secrets, forms of infringement, investigative measures, burden of proof rules, jurisdictional division, and disposal methods, significantly enhancing operability. Compared with judicial practice, the Provisions further clarify the scope of protected subject matter—for example, deleting "components" and "steps" that could be encompassed within "formulations" and "methods"; specifying that electronic intrusion, installation of malicious programs, vulnerability attacks, and unauthorized access constitute improper means; providing reasonable confidentiality measures covering more scenarios such as remote work and cross-border collaboration; strengthening enforcement powers such as seizure,扣押 (distraint), and investigation of bank accounts; and implementing a jurisdictional system where technical secret cases are subject to the jurisdiction of city-level or above market supervision administrations, echoing the civil case jurisdictional levels for trade secrets and promoting specialization and standardization in administrative enforcement. At the local legislative level, various regions have carried out pioneering trials based on their industrial characteristics, forming distinctive institutional arrangements. The Wenzhou Enterprise Trade Secret Protection Regulations (effective 2024) is the first local regulation specifically named for "trade secrets" enacted by a city with district-level jurisdiction, holding groundbreaking significance in local specialized trade secret legislation. The Pudong New Area Several Provisions on Strengthening Trade Secret Protection (effective 2025) focuses on technological innovation and opening-up needs, improving rules on rights determination, case transfer, and inter-departmental collaboration. Hefei established the Hefei Trade Secret Protection Collaboration Mechanism (effective 2026) with a five-department linkage of market regulation, court, procuratorate, public security, and justice bureaus, promoting information sharing, lead transfer, joint investigation, and evidence mutual recognition. Jiangxi Province, in 2025, issued a specialized protection guideline for the biopharmaceutical industry, establishing a tiered, full-process, differentiated protection model, effectively integrating industry rules with administrative protection. Overall, central legislation and local practices echo each other, while general rules and industry guidelines complement each other, providing a solid institutional foundation for administrative protection of trade secrets.   III. Administrative Enforcement Practices and Typical Cases Concerning Trade Secrets Currently, administrative enforcement of trade secrets in China is led by market supervision authorities, following a combination of territorial jurisdiction and elevated jurisdiction. Enforcement tools are increasingly diversified, evidence collection methods are gradually digitized, and case types cover currently high-incidence infringement scenarios. Based on administrative enforcement cases nationwide, typical patterns can be summarized into six categories, providing a relatively comprehensive picture of the actual landscape of administrative protection. Category One: Third-party infringement through malicious poaching and use of confidential information. Cases such as Wenzhou Oujilong Company recruiting employees from competitors and directly using the original company's technical drawings for production, and Anhui Yunxiang Aviation using aviation composite materials technology brought by departing employees, both reflect strict regulation of "poaching-based misappropriation." Administrative enforcement authorities have clarified that enterprises which should know or actually know that employees bring trade secrets from their original employers and still use them also constitute trade secret infringement, thereby reinforcing employers' compliance review obligations. Category Two: Inducement, enticement, and collusive joint infringement. Cases include Hangzhou Zheng's inducement of an incumbent employee to repeatedly steal e-commerce big data operational information; a senior product director at a Fengxian, Shanghai company leaking technical documents via WeChat group under another's inducement; and a Zhoushan case where an external party bribed an employee to secretly photograph production drawings. Market supervision authorities pursued liability against the inducer, the direct leaker, and the external acquirer, clarifying that inducing, enticing, or assisting others to infringe trade secrets also constitutes an administrative violation, helping to sever the "internal-external collusion" infringement chain. Category Three: Theft, removal, or unauthorized disclosure of trade secrets by employees after leaving their positions. This type accounts for a relatively high proportion of cases in practice. A Shenzhen departing engineer uploaded confidential technical data to a personal email account; a technician in Xinyu, Jiangxi violated confidentiality obligations by disclosing lithium battery process information to foreign parties; a former employee of a Wuxi company obtained drawings through surreptitious filming and collusion with suppliers—all were subjected to administrative penalties by market supervision authorities. These cases demonstrate that employees' confidentiality obligations do not terminate upon the end of the employment relationship, and enterprises' management of departing employees' access to secrets and permission cleanup has significant legal implications. Category Four: Breach of confidentiality agreements in commissioned processing and outsourced production. In the Wenzhou Longwan processing plant infringement of centrifuge technical secrets case, the party, despite signing a confidentiality agreement with the rights holder, unilaterally disclosed and used core technical drawings to third parties, evading confidentiality obligations through disguised production and equity contributions. The amount involved was substantial, and the market supervision authority imposed a fine in accordance with the law. This case clarified the boundaries of confidentiality in commissioned relationships, affirming that business operators may not infringe others' trade secrets by means such as cooperation or equity participation. Category Five: Electronic intrusion and network theft using technical means. The case of a student Dong in Shanghai Xuhui exploiting server vulnerabilities to bypass authentication, illegally download unreleased game design documents for profit, is a typical technology-based trade secret infringement. This case clarified that exploiting system vulnerabilities, unauthorized access, cloud theft, and similar methods to obtain trade secrets constitute improper means, further strengthening administrative protection of trade secrets in the digital environment. Category Six: Infringement of business information-type trade secrets. In the Hangzhou Aijia Technology case involving illegal acquisition of ERP operational data, the party illegally logged into the former employer's system to capture cost data, quotation information, and order analysis materials for use in competing business, resulting in a substantial fine. This case clarified that processed and compiled operational data, such as cost analyses and quotations, are business information with secrecy and value and thus constitute protected trade secrets, providing guidance for the protection of business information in platform economy, foreign trade, e-commerce, and other sectors. The above cases cover multiple fields including the real economy, digital economy, high-end manufacturing, biopharmaceuticals, and low-altitude economy, reflecting both the breadth and focus of administrative protection of trade secrets, as well as the increasing capacity of administrative authorities to regulate new types of infringement.   IV. Institutional Progress and Existing Shortcomings in Administrative Protection of Trade Secrets In recent years, China's administrative protection of trade secrets has achieved significant progress at both legislative and enforcement levels. First, the legislative system has become more comprehensive, forming a multi-level, full-process, scenario-based regulatory framework, with clearer protection scope and enforcement powers. Second, the scope of protected subject matter has expanded to include new types of objects such as data, algorithms, and cloud-based information, better aligning with the needs of the digital economy. Third, enforcement professionalism has improved, with enforcement teams gaining richer experience, investigative measures becoming more robust, and electronic evidence collection being increasingly adopted. Fourth, burden-of-proof rules have become more reasonable, alleviating rights holders' burdens in enforcing their rights. Fifth, inter-departmental collaboration has been strengthened, with mechanisms for administrative-criminal linkage, administrative-civil linkage, and cross-regional cooperation gradually being implemented. Sixth, administrative protection and judicial protection have formed a synergy, with some cases seeing parallel civil compensation and administrative penalties, significantly enhancing deterrent effects. At the same time, China's administrative protection of trade secrets still has some shortcomings. First, regional development is uneven: eastern and technology-intensive areas have relatively complete rules, while central and western regions lack detailed supporting regulations. Second, grassroots enforcement capacity often falls short of handling the complexity of trade secret cases; professionalism and practical skills need improvement, with gaps in talent and equipment for technical identification, electronic data forensics, and confidential information recognition. Third, collaboration mechanisms are not fully effective; the efficiency of cross-regional and cross-departmental evidence mutual recognition and lead transfer needs enhancement. Fourth, industry-specific and scenario-based rule supply remains insufficient, with few specialized guidelines for emerging fields. Fifth, preventive measures and compliance guidance are relatively weak; some regions still emphasize punishment over prevention. Sixth, cross-border protection capacity is inadequate; investigating, collecting evidence for, and pursuing foreign-based infringement face practical difficulties.   V. Development Trends of Administrative Protection of Trade Secrets in China Looking ahead, the administrative protection of trade secrets in China will present clearer development directions. At the legislative level, the regulatory system will be further harmonized and equalized; nationwide discretionary standards, evidence guidelines, and identification criteria will gradually improve, and regional disparities will continue to narrow. At the enforcement level, digital and intelligent evidence collection will become more widespread; technical investigation and professional support mechanisms will operate on a regular basis, and enforcement standardization will continue to rise. In terms of protection models, the establishment of a full-chain mechanism comprising pre-incident compliance guidance, in-process dynamic monitoring, and post-incident rapid investigation will accelerate, promoting the organic integration of enterprise primary responsibility and administrative supervision. Regarding collaboration mechanisms, evidence conversion and procedural alignment between administrative-criminal and administrative-civil linkages will become smoother, and cross-regional collaboration platforms will be gradually established. In industry-specific protection, more targeted protection guidelines will be developed based on the characteristics of different industries, achieving precise and differentiated regulation. In the context of further opening up, cross-border trade secret protection rules will be gradually improved, international enforcement cooperation will continue to strengthen, providing stronger safeguards for enterprises "going global."   VI. Conclusion China's administrative protection of trade secrets has entered a new phase characterized by refined legislation, specialized enforcement, digitalized protection, and coordinated efficiency. A regulatory system based on the Anti-Unfair Competition Law of the People's Republic of China, centered around the Provisions on the Protection of Trade Secrets, and supported by local institutional innovations has largely taken shape. The coverage of administrative enforcement continues to expand, and case handling quality and efficiency have steadily improved, playing an irreplaceable role in encouraging innovation, maintaining fair competition, and optimizing the business environment. At the same time, issues such as uneven regional development, insufficient grassroots capacity, ineffective collaboration mechanisms, weak preventive systems, and lagging cross-border protection require ongoing improvement. In the future, we should adhere to the principles of law-based administration, proportionality, and interest balance, further refine the regulatory system, enhance enforcement capabilities, strengthen coordination and linkage, and improve the full-chain protection mechanism, so as to elevate the administrative protection of trade secrets in China to a higher level and provide a solid legal guarantee for high-quality development and the construction of an innovative country.