Protect Business Secrets When Doing Business with China

Protecting business secrets is critical in every aspect of your China business:

When outsourcing manufacturing to China

How to make sure the local manufacturers and OEMs keep confidential your product designs and manufacturing processes, instead of using such valuable confidential information to develop competing products?

When engaging local suppliers and distributors

How to prevent the Chinese supplier or distributors from circumventing and bypassing you and doing business directly with your customers?

When hiring local employees and contractors

How to prevent your local employees and contractors from leaking the company’s trade secrets and other confidential information to competitors or using it to start their own businesses?

When operating joint ventures or joint R&D programs

How to prevent the joint venture partners in China from disclosing your confidential information to a third party or using your intellectual property to develop competing products?

Trustiics: One-Stop Platform for Trusted Legal Services in China

It is important to take proactive measures to protect your business secrets in China. This includes registering your trademarks and/or patents in China as early as possible, signing confidentiality agreements customized to your situation and regularly monitoring for any potential infringement.

Trustiics connects SMEs in need of legal services in China with vetted top-tier lawyers. Users can choose fixed-price services, receive a free quote from their selected lawyers, or start with a quick legal consultation.

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Emilia Shi
20+ years of experience
Subject Expertise
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Beijing, China
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Hong Zheng
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Zhejiang, China
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Jenny (Hongli) Sun
15+ years of experience
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Beijing, China
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Sylvia Zhang
15+ years of experience
Subject Expertise
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Legal Q&A

How many types of business secrets are there, and what can be deemed as a business secret?

There are several types of business secrets, including technical know-how, trade secrets, customer and supplier lists, financial information, marketing and advertising strategies, and business plans. In general, a business secret can be any confidential information that gives a company a competitive advantage, is not publicly known, and has value to the company.

 

This could include anything from manufacturing processes to customer lists to future product plans. To be considered a business secret, the information must also be subject to reasonable efforts to maintain its secrecy, such as using non-disclosure agreements, password-protecting electronic files, or limiting access to certain employees.

What are some common ways that foreign companies steal business secrets from other companies?

Foreign companies may use a variety of tactics to steal business secrets, including hacking, cyber espionage, bribery, and employee espionage. It’s important to take steps to protect your confidential information when doing business with foreign partners or suppliers. This applies not only to China but to other markets as well.

Can I protect my business secrets in China through intellectual property rights (IPR) registration?

While registering your IPR in China is important, it may not be enough to fully protect your business secrets. It is important to take additional steps to safeguard your trade secrets and confidential information. These steps can include using non-disclosure agreements (NDAs), non-use, non-disclosure, and non-circumvention agreements (NNN agreements), limiting access to sensitive information, and conducting thorough background checks on employees and business partners. Working with a local lawyer who understands the legal landscape and culture in foreign markets can help you develop a comprehensive strategy for protecting your business secrets and intellectual property.

Can I use NDAs to protect my business secrets when doing business in China?

Yes, NDAs can be a useful tool to protect your business secrets when working with Chinese partners or suppliers. However, it’s important to ensure that the NDA is properly drafted and enforceable in China. A local lawyer can help you with this. Additionally, you may want to consider using an NNN agreement, which is specifically designed to prevent Chinese manufacturers from misusing or misappropriating your confidential information. A well-drafted NNN agreement can help you protect your intellectual property rights and prevent your Chinese manufacturers or suppliers from competing with you using your confidential information.

How can I ensure that my local employees don't steal my business secrets?

To prevent employee theft of business secrets, you can take a variety of steps, such as requiring employees to sign confidentiality agreements, conducting thorough background checks before hiring, and limiting access to sensitive information to only those who need it.

What should I do if I suspect that a foreign company has stolen my business secrets?

If you suspect that a foreign company has stolen your business secrets, you should contact a lawyer with local experience in intellectual property law to discuss your options. You may be able to take legal action to protect your intellectual property rights and seek damages.

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