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August 3, 2013

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Ex-employee banned from circulating trade secrets

A SHANGHAI court yesterday issued China’s first ban on the circulation of trade secrets, a major step in intellectual property rights protection under Chinese law.

Shanghai No. 1 Intermediate People’s Court prohibited a former employee of US-based drug maker Eli Lilly and Company from using and circulating trade secrets.

The ban was imposed before a court hearing opened.

It is the first ban of its kind issued under a revised Civil Procedure Law enacted on January 1.

An Eli Lilly employee, surnamed Huang, was discovered downloading 21 documents containing trade secrets without authorization. Huang was fired after refusing to delete the documents.

Eli Lilly filed a suit early in July against Huang for violating the company’s trade secrets and demanding compensation of 20 million yuan (US$3.26m).

The company also applied for a ban on the circulation of trade secrets to prevent possible losses before the case opened.

Liu Junhua, a judge at the court, said the court accepted this as an enhanced measure to protect intellectual property rights.

“Trade secrets as a kind of intellectual property were not properly protected under current judicial practices,” Liu said. “The new Civil Procedure Law has filled a gap in protection of trade secrets, and the decision of the court will help the plaintiff hedge risks from secrets being leaked.”

Huang Wushuang, a professor at East China University of Political Science and Law, said China had been lagging behind many developed countries in protecting trade secrets.

The decision by the court marks progress in adopting advanced international practices, he said.


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