It is important to note that protecting trade secrets in China could be challenging due to

differences in legal and business practices. The suggestions offered by the author has brought

to my attention. Protecting trade secrets is crucial for businesses to maintain their competitive

advantage, especially in China's competitive business environment. In this write-up, I will

highlight some suggestions and further comment on its recommendation by giving some extra

examples.

The author pointed out that some measures could be done to prevent trade secrets from

leaking out from exiting or previous employees, such as removing or immediately limit all

access to business secrets for employees who are leaving, or following up on where key

employees work after leaving the firm. I strongly agree that there are such necessities and I

also believe this is a critical first step in protecting trade secrets and preventing trade secrets

from being stolen by former employees. Companies could ensure that sensitive information

does not fall into the wrong hands through the implementation of strict security policies and

procedures that limit access to sensitive information to only those employees who require it

to perform their job functions. Here is a company example of Zhonghua Chemical v

Wanglong to illustrate my point: Zhonghua Chemical filed a lawsuit against a former

employee for stealing trade secrets in 2010 (Ho, 2021). The employee previously worked for

Zhonghua Chemical and had access to confidential information related to Vanilli`n. After

resigning from Zhonghua Chemical, the employee took this trade secrets with him to a new

job at Wanglong, which is Zhonghua Chemical’s rival company. Zhonghua Chemical

claimed that the employee had violated his confidentiality agreement, and had also stolen

trade secrets from the company. This case highlights the importance of limiting access to

business secrets for employees who resign or give notice. If Zhonghua Chemical had

restricted all exiting employees' access to business secrets, they could have avoided losing
about 10% of global market share as Wanglong was able to rapidly expand to become the

world's third largest producer of vanillin with the help of stolen information from Zhonghua

Chemical. Therefore, by collecting all company-owned equipment and restricting access to

confidential information for those leaving, employers can protect their trade secrets and

prevent former employees from using this information for their own gain or to benefit

competitors.

Other than the legal suggestions mentioned by the article, here is an extra recommendation

that the paper did not cover, which is about creating a culture of confidentiality within the

firm. I strongly believe that, with proper environment or culture, employees could eventually

understand the importance of trades secrets protection by instilling the concepts of

confidentiality. Here is a company example of Huawei to illustrate my point. Huawei

published “Huawei White Paper on Innovation and Intellectual Property” in 2019, striving to

protect intellectual properties and trade secrets (Huawei, 2019). Huawei took a crucial step to

protect third-party trade secrets by conducting trade secret publicity efforts, training, and tests

to ensure that all personnel are completely aware of their roles and responsibilities.

Employees are also asked to review the Huawei Business Behavior Guidelines (BCGs) and

sign a BCG commitment letter. To guarantee that all rules are implemented, self-checks and

self-corrections and sanction anybody who breaches the Guidelines are to be arranged. This

measure could effectively convey message to the employees about the importance of trade

secrets protection and could always remind the current or existing employees not to steal or

expose it. After years of implementation creating a culture of confidentiality, Huawei has

successfully protected its trade secrets and its continuous innovation gets recognized by the

industry (GSMA, 2023).

In conclusion, protecting trade secrets in China requires a multifaceted approach that involves

both legal and cultural changes, companies can create a climate of active deterrence and

culture of confidentiality so as to protect their proprietary information before an infringement

issue arises. These measures can help companies minimize the risks associated with operating

in China's competitive marketplace and protect their competitive advantage.

References:

GSMA. (2023, March 1). 2023 Glomo Award winners announced at MWC Barcelona 2023.
Newsroom. Retrieved March 6, 2023, from https://www.gsma.com/newsroom/press-
release/2023-glomo-award-winners-announced-at-mwc-barcelona-2023/

Ho, M. (2021, March 2). Chinese Court Awards record payout to chemical firm in Trade
Secrets Case. South China Morning Post. Retrieved from
https://www.scmp.com/news/china/politics/article/3123817/chinas-top-court-awards-
record-us24-million-payout-chemical?
module=perpetual_scroll_0&pgtype=article&campaign=3123817

Huawei. (2019, June 25). Huawei White Paper on innovation and intellectual property.
huawei. Retrieved March 6, 2023, from
https://www.huawei.com/en/huaweitech/industry-insights/innovation/huawei-white-
paper-on-innovation-and-intellectual-property