In September 2018, a polylactic acid company in Anhui province entered into a contract with two subsidiaries under a Swiss group. The agreement stipulated that the Swiss subsidiaries would provide equipment and technical support for the company's polylactic acid production project.
However, in September 2019, the company breached the confidentiality agreement with the Swiss entities. It covertly utilized the technical information provided by the Swiss companies during the execution of the contract to file its own invention patent application with the China National Intellectual Property Administration (CNIPA). Subsequently, the company obtained patent authorization for this in October 2020.
Following an investigation, the Shanghai Putuo District Market Supervision and Administration Bureau determined that the company's actions, which involved violating the confidentiality agreement and applying for a patent using non-public technical information provided by others, infringed upon Item (3) of Paragraph 1 of Article 9 of the Anti-Unfair Competition Law of the People's Republic of China. This constituted a breach of trade secrets.
Consequently, in accordance with Article 21 of the same law, the bureau imposed an administrative fine of 850,000 yuan ($117,620.43) on the company.
This case exemplifies administrative authorities' commitment to safeguarding trade secrets, fostering a conducive and well-regulated business environment and bolstering foreign enterprises' trust in China's intellectual property institutional framework.
