Case Brief

AI X Diagnosis Co., Ltd. in New Zealand (hereinafter referred to as "AI X Company") filed a lawsuit with the court of first instance, alleging that it is the right holder of the technical secret related to the production process and product preparation procedure for isolating and purifying natural protease 3 (abbreviated as PR3 in English) from the azurophilic granules of neutrophils in human blood. After resigning from the AI X Company, SUN X became the major shareholder and legal representative of Wuhan BO X Biotechnology Co., Ltd. (hereinafter referred to as "BO X Company"). SUN X violated his confidentiality obligations by unlawfully disclosing AI X Company's technical secrets to the BO X Company. He further colluded with BO X Company to exploit the technical secret involved for illegal gains. Sun X also applied for patents for the technical secret involved, resulting in its disclosure, which severely damages the legitimate rights and interests of AI X Company. The court of first instance held that the technical solutions of the patent and the technical secret were substantially similar, and that the patent application had utilized and partially disclosed the technical secret. BO X Company had used the technical secret involved to produce PR3 products. At the same time, SUN X, in violation of his confidentiality obligations, disclosed the mastered technical secret to BO X Company and authorized the company to use it, thereby jointly infringing upon the technical secret. The court of first instance rendered a judgment ordering BO X Company and SUN X to immediately cease their infringing acts and jointly and severally compensate AI X Company for economic losses amounting to 1.8 million yuan. Both AI X Company and BO X Company, along with SUN X, were dissatisfied with the judgment and filed appeals. AI X Company contended that the compensation amount awarded in the first instance was too low, while BO X Company and SUN X argued that the technical information involved did not constitute a technical secret and that its content was already known to the public.

The Supreme People's Court, in a second-instance trial, held that the technical secret involved encompassed a large volume of technical information, constituting a relatively complete technical solution. Even if parts of the technical information were known to the public, it was necessary to consider the interrelationships among the various pieces of information, as well as whether the overall technical solution was known to the public. In this case, AI X Company provided prima facie evidence that it had implemented appropriate confidentiality measures for the technical information at issue and reasonably demonstrated that the technical information was infringed. Although the isolation and purification of PR3 from the azurophilic granules of neutrophils in human blood was a technique known to those skilled in the art, the technical information involved pertained to specific operational steps and sequences, involving a significant number of reagents and the concentrations thereof, as well as the selection of relevant operational parameters, which cannot be obtained without repeated experimentation, modification, optimization, and adjustment, and forming a complete technical solution inevitably requires a significant amount of research and development costs. AI X Company applied this operational procedure to actual production and achieved favorable results. Therefore, the disclosure of specific information based on different pieces of evidence does not prove that the overall technical solution of the technical secret involved or the particular step corresponding to each confidential point has become known to the public. The arguments made by BO X Company and SUN X that the technical secret involved was already known to the public are untenable. The compensation amount awarded in the first instance was not obviously inappropriate. Consequently, the court dismissed the appeals and upheld the original judgment.

Typical Significance

This case serves as a typical example of the equal protection afforded to trade secrets held by foreign rights holders under the law. The ruling in this case emphasizes that a systematic and complete technical solution developed through experimentation and optimization can still be deemed as not known to the public, and in principle, the constituent elements of a technical secret cannot be negated simply by combining fragmented information from different sources. This case demonstrates the protection of trade secrets formed overseas within China's jurisdiction, conducts valuable explorations in cross-border judicial protection of trade secrets, and protects the legitimate rights and interests of foreign rights holders in a fair and equal manner in accordance with the law, thus enhancing the confidence of foreign-invested enterprises in investing in China. Accordingly, this case stands as a representative example of the people's courts applying the principle of equal protection to both Chinese and foreign entities and optimizing the legal business environment.

(Case Source: Typical Anti-Unfair Competition Cases of the People's Courts in 2025)