Document Number: No. 15 [2020] of the Supreme People's Procuratorate

Area of Law: Jurisdiction of Criminal Cases Initiation of Public Prosecution and Private Prosecution Opening a Case for Criminal Investigation

Level of Authority: Documents of Judicial Interpretation Nature

Date Issued: 09-17-2020

Effective Date: 09-17-2020

Issuing Authority: Supreme People's Procuratorate Ministry of Public Security

Status: Effective

Invalidated by: Notice by the Supreme People's Procuratorate and the Ministry of Public Security of Issuing the Decision on Amending the Criteria for Launching Formal Investigation into Criminal Cases of Infringement upon Trade Secrets

Notice by the Supreme People's Procuratorate and the Ministry of Public Security of Issuing the Decision on Amending the Criteria for Launching Formal Investigation into Criminal Cases of Infringement upon Trade Secrets

The people's procuratorates and public security departments (bureaus) of all provinces, autonomous regions, and municipalities directly under the Central Government; the Military Procuratorate of the People's Liberation Army; and the People's Procuratorate and the Public Security Bureau of Xinjiang Production and Construction Corps:

The Decision on Amending the Criteria for Launching Formal Investigation into Criminal Cases of Infringement upon Trade Secrets is hereby issued for your compliance and implementation. All localities shall report the problems encountered in the implementation and file requests for instructions with the Supreme People's Procuratorate and the Ministry of Public Security in a timely manner.

Notice by the Supreme People's Procuratorate and the Ministry of Public Security of Issuing the Decision on Amending the Criteria for Launching Formal Investigation into Criminal Cases of Infringement upon Trade Secrets

For the purposes of punishing crimes of infringement upon trade secrets in accordance with the law, intensifying the criminal judicial protection of intellectual property rights, and maintaining the economic order of the socialist market, Article 73 Criteria for Launching Formal Investigation into Criminal Cases of Infringement upon Trade Secrets of the Provisions of the Supreme People's Procuratorate and the Ministry of Public Security on the Criteria for Launching Formal Investigation into Criminal Cases under the Jurisdiction of Public Security Organs (II) are amended to read: [Cases of Infringement upon Trade Secrets (Article 219 of the Criminal Law)] Infringement upon a trade secret being suspected of falling under one of the following circumstances shall be subject to formal investigation:

(1) The amount of losses caused to the right holder of a trade secret is more than 300,000 yuan.

(2) The amount of illegal gains from infringement of a trade secret is more than 300,000 yuan.

(3) Bankruptcy and closedown of the right holder of a trade secret due to major operation difficulty which is directly caused by the infringement.

(4) Other circumstances causing major losses to the right holders of trade secrets.

The amount of losses or illegal gains caused as specified in the preceding paragraph may be determined by the following means:

(1) Where the trade secret of a right holder is obtained by the violator by inappropriate means, and is not disclosed, used or allowed to be used by others, the amount of losses may be determined based on the reasonable licensing fees for the trade secret.

(2) Where, after the trade secret of a right holder is obtained by the violator by inappropriate means, it is disclosed, used or allowed to be used by others, the amount of losses may be determined based on the losses of the right holder's sales profits caused by the infringement, but where the amount of losses is lower than the reasonable licensing fees for the trade secret, it shall be determined based on the reasonable licensing fees.

(3) Where a trade secret obtained is disclosed, used or allowed to be used by others in violation of the agreement and the requirements of the right holder for keeping trade secrets, the amount of losses may be determined based on the losses of the right holder's sales profits due to the infringement.

(4) Where it is known perfectly well that a trade secret is obtained by inappropriate means, or disclosed, used, or allowed to be used in violation of the agreement and the right holder's requirements for the protection of trade secrets, it is still obtained, used or disclosed, the amount of losses may be determined based on the losses of the right holder's sales profits due to the infringement.

(5) Where a trade secret has been known to the public or has been lost due to infringement upon a trade secret, the amount of losses may be determined based on the commercial value of the trade secret. The commercial value of a trade secret may be comprehensively determined based on the research and development costs of the trade secret and the benefits from the implementation of the trade secret.

(6) The property or other property benefits obtained by disclosing or allowing others to use trade secrets shall be deemed illegal gains.

The losses of sales profits caused by the infringement upon a right holder as specified in Items (2), (3) and (4) of the preceding paragraph may be determined by multiplying the total amount of sales reduction caused by the infringement upon the right holder by the reasonable profits of each product of the right holder. Where the total number of sales reductions cannot be determined, it may be determined by multiplying the sales volume of the infringed product by the right holder's reasonable profits per product. And where the right holder's total sales reduction due to infringement and the reasonable profits of each product cannot be determined, it can be determined by multiplying the sales volume of infringed products by the reasonable profits of each infringed product. Where a trade secret is used in other business activities such as services, the amount of losses may be determined based on the reasonable profits of the right holder reduced by the infringement.

The remedial expenses paid by the right holder of a trade secret for reducing the losses of business operation or business plans or restoring the security of computer information systems and other systems shall be included in the losses caused to the right holder of the trade secret.

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