On 24 april 2025, the supreme people's court and the supreme people's procuratorate jointly issued the interpretation of certain questions of the law applicable to criminal cases of violations of intellectual property rights (hereinafter referred to as " interpretations " ), which makes specific provision for determining the gravity of the violation of a business secret。
In a press conference, the vice-president of the supreme people's court, mr. Tao kai won, described the fact that between 2013 and 2024, people's courts and people's procuratorates at all levels of the country had full jurisdiction over trials and procuratorial functions, bringing 691 criminal cases of violation of intellectual property and concluding 646 criminal cases of violation of intellectual property at first instance. At the same time, there is still a certain degree of vulnerability to abuse in the area of intellectual property, where criminal behaviour is characterized by novelty, complexity and high technology, and where there is a growing need for innovative creators from all sectors of society to strengthen criminal protection of intellectual property rights。
The president of the people's division of the supreme people's court (the intellectual property court), li kian, explained that the interpretation followed up on the party's central decision-making and deployment to strengthen the protection of intellectual property rights and strengthen criminal action, upholding the principle of strict protection in accordance with the law, lowering the standards of incrimination, increasing the number of incriminating cases, imposing heavy penalties and increasing the ceiling on the application of fines。
Among them, the interpretation follows mainly the criteria for incrimination set out in the original judicial interpretation and reduces the criteria for incriminating the offence of marking, as well as the offence of false patenting, sale of torts and replicas, in practice. The interpretation also increases the ceiling on the application of fines by modifying the phrase “in general, the amount of the fine shall be determined more than twice and less than five times the amount of the offence” to “more than twice and less than ten times” and by increasing the maximum amount applicable to the penalty。
Prior to this, amendment (xi) to the penal code amended the introduction of the offences of sale of counterfeit registered trademarks, sale of torts and replicas, and violation of commercial secrets. The interpretation, combined with judicial practice, increases the number of incriminating cases. For example, the “value of the sale” “value of the goods” “number of copies of the sale” is defined as an aggravating circumstance for the offence of the sale of torts and replicas; in order to severely punish multiple, long-term violations in accordance with the law, the threshold is lowered in the case of repeated violations committed after two years of criminal or administrative penalties。
What are the criteria set out in the interpretation, such as sentencing for commercial secrecy? According to li, amendment (xi) to the criminal code introduced significant changes in the offence of violation of commercial secrecy, optimizing the criterion of admission to a crime as “serious” and raising the maximum statutory penalty to 10 years. The interpretation establishes the threshold of “gravity”, i. E. The amount of damage caused or the amount of the proceeds of the offence, “more than 300,000 yuan”, which is reduced to “100,000 or more” after two years of criminal or administrative punishment for violating a trade secret。
Determination of the amount of the loss. The interpretation follows mainly the original relevant judicial interpretation, distinguishing the degree of social harm of different acts and establishing different criteria for identification. In cases where commercial secrets are obtained by improper means, such as theft, social hazards are such that the loss can be determined on the basis of reasonable licence fees for commercial secrets and the actual use of commercial secrets is not required; in the case of “fault-type” breaches of business secrets and “offences against commercial secrets”, the loss of profit by the right-holder is calculated on the basis of the use of commercial secrets by the perpetrator; and in the case of loss of non-publicity or loss of business secrets, the amount of loss is determined on the basis of the commercial value of commercial secrets。
Determination of the amount of proceeds obtained in violation of the law. The interpretation provides for the manner in which the amount of the unlawful proceeds of a violation of a commercial secret is to be determined. When the perpetrator improperly obtained the business secret or violated the duty of confidentiality, he transferred the business secret to a third person, who often paid money, etc. According to the interpretation, the value of property or other property-related benefits acquired by disclosing or allowing the use of commercial secrets may be directly recognized as proceeds of crime. Profits derived from the use of trade secrets may also be recognized as illicit gains, determined by multiplying the sales of tort products by the reasonable profits of each tort product。
The interpretation also uses, as a practical criterion, the aggravating circumstance of the offence of “insolvency and failure of the holder of the right directly resulting from the existence of a business secret” under the original relevant judicial interpretation, as a serious offence。
Li kian stated that the offence of stealing, spying, buying or illegally providing commercial secrets abroad was a new offence under amendment (xi) to the criminal code, which was an offence of conduct and, in principle, was an offence if the perpetrator committed the act in question. The manner in which the offence of stealing, spying, buying or illegally providing commercial secrets is committed abroad is essentially consistent with the commission of the offence of violating commercial secrets. The perpetrator steals and spies on commercial secrets, which may involve the use of improper means such as theft, fraud, coercion, electronic intrusion; the purchase of commercial secrets may involve the use of bribes; and the illegal provision of such secrets refers primarily to the disclosure of commercial secrets to institutions, organizations, persons outside the country by persons who know about them。
“it is important to note that the offences of violation of commercial secrecy under the interpretation are recognized as being `serious' in the second sentence of the offence of theft, espionage, purchase or illegal provision of commercial secrets outside the country, thereby ensuring an effective link between the two offences in terms of the sentence imposed on the conviction and sentence.”。
