China Raises the Stakes on Trade Secret Protection: What Companies and Counsel Need to Know About the New Rules

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Why it matters

On February 24, 2026, China's State Administration for Market Regulation (SAMR) issued the Provisions on the Protection of Trade Secrets, a major overhaul replacing the outdated Several Provisions on Prohibiting Infringement of Trade Secrets from 1995 (last amended 1998), which had 12 articles; the new Provisions expand to 31 articles and take effect June 1, 2026.[1][2][4][8] Key developments include an expanded definition of trade secrets covering technical information (e.g., algorithms, computer programs, code, AI datasets) and business information (e.g., customer data, sales strategies, financial plans) with actual or potential commercial value, plus lower enforcement barriers like a presumption of infringement if substantial similarity and access are shown.[1][4][5] They also introduce extraterritorial reach, detailed confidentiality measures (e.g., tiered access, data encryption, employee exit protocols), and alignment with the digital economy.[1][4][7]

SAMR, formerly the State Administration for Industry and Commerce (SAIC), is the primary agency issuing and enforcing the Provisions.[1][4][5][8] No specific companies or individuals are named, but the rules target businesses, IPR holders, employers, and counsel operating in or with China, including foreign investors; co-author Yanlong Li commented in one analysis.[1] Legislation builds on superior laws and judicial practice, addressing TRIPS compliance gaps (e.g., removing citizen-only rights language post-WTO 2001).[8]

The update ends 30+ years of the 1995 rules amid China's digital economy growth, IP legislative lags (vs. updated patent/trademark laws post-WTO), and international pressure like the 2020 U.S.-China Phase One Agreement's trade secret provisions; revision efforts began ~10 years ago.[1][5][8] Timeline: 1995 rules issued; 2026 issuance signals domestic innovation needs over unfair competition focus.[8]

Newsworthy now (March 2026 headlines) as the Provisions modernize administrative enforcement pre-June 1 effective date, easing protection for tech/business secrets amid rising theft/hacking risks, urging companies to update policies; reflects China's IP evolution balancing foreign influence with domestic tech diffusion (e.g., legalized reverse engineering).[1][4][5][8]

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