Page 138 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
Significance: This case refers to the protection for record of Ruixin Company’s bank account showed that
the rights of new plant varieties. There are two types Ruixin Company’s clients overlapped with the same of
of infringement on the right of new plant varieties Reflected Company, and Song Junchao had withdrawn
in juridical practice: first, production or sales of the payment several times from Ruixin Company’s bank
reproduction materials of an authorized variety, for account in his own name, from August 1, 2011 to July
commercial purposes, without permission of the 31, 2015. Reflective Company thus filed a lawsuit against
owner of the right of such varieties; second, reuse of Song Junchao for infringement of trade secrets. The
the reproduction materials of an authorized variety Court of First Hearing held that Song Junchao and Ruixin
for production of the same or of another variety, for Company jointly infringed on the trade secrets owned by
commercial purposes, without permission of the owner Reflective Company. The Court of Second Hearing held
of such variety. Since these two types of infringement that, based on the transaction records and the clients’
are involved in this case at the same time, this case can exchange receipts provided by Reflective Company, the
be an example for application of law for similar cases. “types”, “specifications” and “quantities” therein showed
Additionally, the right of new plant varieties is very the unique needs of clients; the “closing date” revealed
special as it may be terminated during specific interval the pattern of clients’ purchases of the goods; “unit price”
of the protection period. Therefore, this case is different proved customer’s affordability and their minimum
from other types of intellectual property infringement price; “notes” reflected special information provided by
lawsuits. The judgment in this case fully considered the the clients. The information therein may be deemed
special factors in the protection for new plant varieties, as business secrets of Reflective Company. Reflective
and properly identified the infringement and the Company was a stable supplier and maintained a good
amount of compensation, which provides guidance for trading relationship with the clients involved in said
the judgment on the similar cases. business information. That information is applicable
and may bring profits and a competitive advantage to
“Reflective Material” Trade Secret Dispute Reflective Company. Reflective Company established a
confidentiality system for its business information, took
Hebi Reflective Co., Ltd. (hereinafter, “Reflective the confidentiality measures necessary for protection
Company”) vs. Song Junchao, Hebi Ruimingte of information of clients and potential clients, provided
Technology Co., Ltd. (hereinafter, “Ruimingte Company”), terms of confidentiality and restraint of trade agreed
and Li Jianfa regarding dispute over infringement of upon to Song Junchao, and made payments for
trade secrets [(2016) Henan Civil Final Hearing No. 347 confidentiality to him and other salesmen. Such actions
Civil Judgment issued by Henan Higher People‘s Court]. proved that Reflective Company had taken reasonable
measures to protect confidentiality of the said business
Case Summary: Song Junchao served as salesman information. In conclusion, the client list prepared by
in Hebi Reflective Co., Ltd. (hereinafter, “Reflective Reflective Company shall be deemed a trade secret.
Company”) from 2006, mainly responsible for sales Song Junchao thus shall perform his obligations of
and client development in some provinces. Reflective loyalty to Reflective Company, including the obligation
Company and Song Junchao entered into two labor to retain business information he had access to in
contracts, where terms of confidentiality and restraint confidence. Despite the fact that Song Junchao was
of trade were provided. Reflective Company established clearly aware of the company’s relevant management
a confidentiality system for its business information, regulations, and the exclusivity and commercial value in
took confidentiality measures necessary regarding the the client list, he still privately conducted business with
information of clients and potential clients, and at the clients of Reflective Company, and had been in frequent
same time, paid Song Junchao and other salesmen fees communication with Ruixin Company, which shall be
for maintaining confidentiality. Hebi Ruixin Trading Co., held as disclosure and use of, and permission for others
Ltd. (hereinafter, “Ruixin Company”, former company to use the exclusive business information of Reflective
of Hebi Ruimingte Technology Co., Ltd.), founded on Company, as well as infringement of its trade secrets.
June 22, 2011, was in the business of steel, construction Moreover, Ruixin Company had improperly acquired and
materials, metals, coated plates, and reflective fence used the trade secrets of Reflective Company held by
barriers. During its operation, Song Junchao participated Song Junchao. The actions by Song Junchao and Ruixin
in the relevant work for its industry and commerce Company jointly infringed on the trade secrets owned
registration procedures in the name of Song Xiang. The by Reflective Company. As Ruixin Company has been
138
Significance: This case refers to the protection for record of Ruixin Company’s bank account showed that
the rights of new plant varieties. There are two types Ruixin Company’s clients overlapped with the same of
of infringement on the right of new plant varieties Reflected Company, and Song Junchao had withdrawn
in juridical practice: first, production or sales of the payment several times from Ruixin Company’s bank
reproduction materials of an authorized variety, for account in his own name, from August 1, 2011 to July
commercial purposes, without permission of the 31, 2015. Reflective Company thus filed a lawsuit against
owner of the right of such varieties; second, reuse of Song Junchao for infringement of trade secrets. The
the reproduction materials of an authorized variety Court of First Hearing held that Song Junchao and Ruixin
for production of the same or of another variety, for Company jointly infringed on the trade secrets owned by
commercial purposes, without permission of the owner Reflective Company. The Court of Second Hearing held
of such variety. Since these two types of infringement that, based on the transaction records and the clients’
are involved in this case at the same time, this case can exchange receipts provided by Reflective Company, the
be an example for application of law for similar cases. “types”, “specifications” and “quantities” therein showed
Additionally, the right of new plant varieties is very the unique needs of clients; the “closing date” revealed
special as it may be terminated during specific interval the pattern of clients’ purchases of the goods; “unit price”
of the protection period. Therefore, this case is different proved customer’s affordability and their minimum
from other types of intellectual property infringement price; “notes” reflected special information provided by
lawsuits. The judgment in this case fully considered the the clients. The information therein may be deemed
special factors in the protection for new plant varieties, as business secrets of Reflective Company. Reflective
and properly identified the infringement and the Company was a stable supplier and maintained a good
amount of compensation, which provides guidance for trading relationship with the clients involved in said
the judgment on the similar cases. business information. That information is applicable
and may bring profits and a competitive advantage to
“Reflective Material” Trade Secret Dispute Reflective Company. Reflective Company established a
confidentiality system for its business information, took
Hebi Reflective Co., Ltd. (hereinafter, “Reflective the confidentiality measures necessary for protection
Company”) vs. Song Junchao, Hebi Ruimingte of information of clients and potential clients, provided
Technology Co., Ltd. (hereinafter, “Ruimingte Company”), terms of confidentiality and restraint of trade agreed
and Li Jianfa regarding dispute over infringement of upon to Song Junchao, and made payments for
trade secrets [(2016) Henan Civil Final Hearing No. 347 confidentiality to him and other salesmen. Such actions
Civil Judgment issued by Henan Higher People‘s Court]. proved that Reflective Company had taken reasonable
measures to protect confidentiality of the said business
Case Summary: Song Junchao served as salesman information. In conclusion, the client list prepared by
in Hebi Reflective Co., Ltd. (hereinafter, “Reflective Reflective Company shall be deemed a trade secret.
Company”) from 2006, mainly responsible for sales Song Junchao thus shall perform his obligations of
and client development in some provinces. Reflective loyalty to Reflective Company, including the obligation
Company and Song Junchao entered into two labor to retain business information he had access to in
contracts, where terms of confidentiality and restraint confidence. Despite the fact that Song Junchao was
of trade were provided. Reflective Company established clearly aware of the company’s relevant management
a confidentiality system for its business information, regulations, and the exclusivity and commercial value in
took confidentiality measures necessary regarding the the client list, he still privately conducted business with
information of clients and potential clients, and at the clients of Reflective Company, and had been in frequent
same time, paid Song Junchao and other salesmen fees communication with Ruixin Company, which shall be
for maintaining confidentiality. Hebi Ruixin Trading Co., held as disclosure and use of, and permission for others
Ltd. (hereinafter, “Ruixin Company”, former company to use the exclusive business information of Reflective
of Hebi Ruimingte Technology Co., Ltd.), founded on Company, as well as infringement of its trade secrets.
June 22, 2011, was in the business of steel, construction Moreover, Ruixin Company had improperly acquired and
materials, metals, coated plates, and reflective fence used the trade secrets of Reflective Company held by
barriers. During its operation, Song Junchao participated Song Junchao. The actions by Song Junchao and Ruixin
in the relevant work for its industry and commerce Company jointly infringed on the trade secrets owned
registration procedures in the name of Song Xiang. The by Reflective Company. As Ruixin Company has been
138
