Washington, DC – The recently signed Phase 1 US China–trade agreement significantly lowers the bar for US companies to pursue intellectual property claims in China.
In a key change, the burden of proof in trade secrets disputes shifts to the accused party. Trade secret holders will only have to produce prima facie evidence, including circumstantial evidence, of a reasonable indication of trade secret misappropriation.
The accused will have to show that it has not 'misappropriated the trade secret.' In future, Chinese courts will view such as claim as urgent, and grant interim injunctions based on the facts of the case.
Ultimately, there will be no need to show loss before a criminal investigation in China. In the meantime, the requirement to show great loss will be reduced.
During the transition period, companies will only have to show they have incurred costs because of the claimed infringement. These cost could include those incurred to mitigate damage to business operations or planning or to re-secure computer or other systems.