Criminal Protection Boundary Upon Trade Secrets

Against the background of the rise of economic globalization and growth of the knowledge economy,the legal regime of trade secrets protection,as a major measure in safeguarding intellectual knowledge and information,has become increasingly critical.Ever since 1997 the criminal protection had been furnished to trade secrets by the Criminal Law of China,but in term of its provision structure,the relevant provision under the China Anti-unfair Competition Law had been transplanted directly into the Criminal Law,only setting up a circumstantial condition which"caused significant losses to the holder of the trade secrets".That vague definition of the criminal act thus begs the following questions:Where the boundary of trade secret criminal protection shall be?If it is reasonable only drawing the boundary by the circumstance of "significant losses" under the criminal regime as opposed to common tort?How should the boundary of the trade secrets criminal protection be set so as to balance the risk of indulging crime,and over-reaching against tort in civil nature,or even lawful act?These become the core issues discussed in this paper.This paper is divided into introduction,five chapters of main body and concluding remarks with the following framework:The first chapter discusses the legitimacy and appropriateness of criminal protection towards trade secrets,setting up a theoretical basis for the paper.The very value of trade secrets lies on maintaining business ethics,securing fair competition,and stimulating innovation.The nature of trade secrets and the likelihood of excessive imbalances between the rights holders and the infringer form the internal mechanism that warrants the criminal protection of trade secrets.At international level,the US,Japan and Taiwan regions have strengthened the criminal legislation of trade secrets protection,increased the degree of penalties,showing an apparent legislative and judicial tendency diverting from "civil law remedy focused" to multiple fashion by seeking both civil and criminal remedies.However,the modestly restraining spirit of criminal law,coupling with the function of criminal protection of trade secrets and the international practice,etc.,also restrain the intervention of criminal sanction in order to strike a balance between the legitimacy and suitability.Having introduced the source of the sample cases and selection criteria,the second chapter goes on to carry out comprehensive analysis of 72 trade secrets criminal cases by applying a methodology based on quantitative analysis of batch cases.The second chapter draws the conclusion that demarcating the boundary of criminal protection of trade secrets shall essentially take into account of the objective aspects of crime,including three areas,i.e.,whether the information involved shall be defined as trade secrets?Whether significant losses had been caused to the right holder and how should they be valued?And if the defendant had committed act of misappropriation of trade secrets.The third chapter analyses the boundary of criminal protection of trade secrets.In determining the nature of trade secrets under the criminal law,the issue of secrecy and confidentiality remain the core.The empirical analysis shows that the relative secrecy criteria have been completely adopted by judicial authorities,which to a large extent subject to judicial appraisal opinions.While in determining the confidentiality,the judicial authorities take a rather low standard in term of the reasonable confidentiality protection measures,and lacks requirements on degree of confidentiality.As the judicial authorities Continuously broaden the sphere of criminal protection of trade secrets and completely adopt identical criteria of the civil law rule or even lower criteria in determining trade secrets in criminal law,the affirmation criteria of the crime is blurred and the jurisdictional boundary of civil and crime is not clear.By applying theory of substantial interpretation of criminal law,trade secrets should be independently interpreted on the basis of constitutive elements of crime,so as to build up more stringent standards.In addition,the judicial review and cross-examination of trade secrets appraisal opinions shall play greater part in judicial practice as well as the sphere of criminal protection of trade secrets should be controlled with a reasonable range.The chapter 4 analyses the criminal boundary of significant losses.Whether there are significant losses plays an important role in the identification of crime of infringing trade secrets.However,the present laws and judicial explanations have not clearly identified the specific essence or calculation methods of significant losses.Empirical analysis has proven that the identification modes of significant losses are pluralized and complex.After theoretical analysis of the identification modes of significant losses,the writer suggests that we should build up the identificaiton mode which relys first on the benefits of the infringer while takes the value of trade secrets into consideration second,so as to clarify the criminal boundary of significant losses.The chapter 5 analyses the criminal boundary of criminal behaviors.In this chapter,the writer discusses the various type of misappropriation of trade secrets infringement and exclusions,including reverse engineering.The writer has also found that the infringement test widely used in civil cases have been brought into criminal trial.While in accordance with the principle of presumptions of innocence and adjudication rule of in dubio pro reo,the civil infringement test-"identical(also substantive similarity)plus access to the trade secrets subtract legitimate sources" shall not be transplanted into criminal proceeding.The last part of concluding remarks reviews the facts that criminal law does not strike a proper balance in the degree of protection-sometimes it is too strict and sometimes too lenient.On the one hand,there is a clear trend in criminalizing the trade secrets infringement,but on the other hand,the current trade secrets legal regime seems to be inefficient in tackling international economic espionage and malicious infringement.In demarcating the boundary of criminal protection of trade secrets,the writer suggests to add a new type of crime that trade secrets has been misappropriated for oversea parties.The writer goes on to propose that the criminal protection of trade secrets shall be regulated by perfecting the procedural rules,and the act of negligence shall be immune from criminal liability.The paper inspects the judicial rules that Chinese courts use during the criminal trial of infringement upon trade secrets through specific examples.Then it analyses through legal,comparative and economical principles to review and evaluate the rules in practice,upon which proposes solutions and suggestions in order to clarify boundary of criminal protection upon trade secrets.The paper is intended to provide theoretical support for accurate judicature of crime of infringing trade secrets and promote further development of this research field.