Guiding Case No. 273 Issued by the Supreme People’s Court: Judicial Innovations in the Protection of Technical Secrets (Mainland China)

Case of Zhejiang Ji Group Holdings Co., Ltd. & Ji Automobile Research Institute v. Wei Automobile Co., Ltd. et al. is released by the Supreme People’s Court (SPC) in 2026 as a key intellectual property guiding case (No. 273), involving a claim exceeding RMB 600 million.  The case centers on a typical infringement scenario in the new energy vehicle industry: mass poaching of core technical personnel from competitors to steal core chassis technical secrets.  It precisely addresses three core pain points hindering scientific and innovative enterprises seeking judicial protection for their technical secrets, namely the heavy burden of proof borne by right holders, overly general cease-and-desist judgments that are difficult to enforce, and the lack of effective disciplinary measures against infringing parties that refuse to comply with effective judgments.  Its judicial reasoning carries profound guiding significance for the protection of technical secrets of innovative enterprises and compliance management of talent mobility across industries.
The plaintiff, Ji Group Holdings, has long dedicated itself to independent research and development (R&D) of complete vehicle chassis technologies.  After years of sustained investment in R&D, it developed proprietary core technical secrets including exclusive chassis calibration parameters and complete vehicle chassis structural drawings.  Meanwhile, it established a comprehensive intellectual property confidentiality system that builds multi-layered safeguards for technical confidentiality through tiered access permission control, universal non-disclosure agreements for all employees, and post-employment non-compete restrictions.  The defendant, Wei Automobile, recruited more than 40 core chassis technical staffs from the Ji Group in a mass collective poaching operation, through which it directly obtained the plaintiff’s confidential core technologies.
From the perspective of industrial R&D norms, the independent forward R&D cycle for a complete vehicle chassis ranges from three to five years.  However, Wei Automobile launched complete vehicles with chassis technologies substantially identical to those of Ji Group in merely 28 months.  Substantial similarity between the technical drawings and core calibration parameters of the two parties constitutes sufficient evidence of infringement.  After trials of first and second instance with a damages award issued at first instance, the SPC substantially raised the compensation amount in the second instance judgment.  It also pioneered enforceable, highly deterrent detailed enforcement rules for cease-and-desist orders and judicial criteria for liquidated damages for delayed performance, fully remedying judicial shortcomings in safeguarding technical secrets.  Through the judgment of this case, the SPC formulated universally applicable judicial rules and reshaped the judicial adjudication logic for technical secret infringement disputes.

I. Shift of Burden of Proof

The judgment strictly implements the rules of evidence set forth in Paragraph 2 of Article 32 of the Anti-Unfair Competition Law (revised to Paragraph 2 of Article 39 after the 2025 amendment).  It clarifies that once the right holder fulfils its preliminary burden of proof, the burden of proof shifts to the defendant.  Under the provisions, the burden of proof transfers to the defendant upon the right holder proving three foundational facts: (1) it lawfully owns valid technical secrets and has adopted complete confidentiality measures; (2) the defendant has channels to access the disputed technical secrets; and (3) the disputed technologies of both parties are substantially similar.  The defendant shall then bear the burden of proving that its technologies have a legitimate source; failure to provide such proof shall give rise to a presumption of infringement.
The court held that mass recruitment of core technical personnel from competing enterprises objectively creates a stable channel to obtain competitors’ technical secrets, which directly gives rise to a presumption that the defendant had access to the confidential technologies.  Additionally, if the defendant’s time-to-market for comparable products is far shorter than the reasonable independent R&D cycle of the industry, legitimate means of technology acquisition such as independent R&D and reverse engineering may be ruled out, which in turn creates a presumption that the defendant illegally used the other party’s technical secrets.  The combination of these two presumptions enables the right holder to fully discharge its preliminary burden of proof without possessing direct evidence of the defendant’s theft, transmission or storage of confidential documents.
This rule completely resolves the longstanding evidentiary dilemma in technical secret protection litigation.  Previously, electronic evidence of infringement is highly concealed, making it extremely difficult for right holders to secure direct proof of the defendant’s infringing acts and resulting in an extremely low success rate for claims.  The indirect factual presumption rule established in this case only requires right holders to submit conventional evidence such as records of employee turnover, authoritative industrial data on R&D cycles, and comparative technical reports between the two parties to complete a closed chain of preliminary evidence.  Meanwhile, the defendant’s burden of rebuttal evidence is significantly heightened.  To rebut the presumption of infringement, the defendant must submit a full set of evidence including a complete timeline of its own R&D, original experimental data, employment histories of its R&D personnel, and proof of R&D investment.  Mere verbal arguments such as claims that the technologies represent general industrial know-how or independent technical optimization will not be upheld by judicial authorities.  This rule also draws a clear red line for corporate operations: mass poaching of core technical teams from competitors carries extreme legal risks, and enterprises whose product technologies bear high similarity to competitors’ are highly likely to lose lawsuits and bear compensation liabilities due to an inability to discharge their burden of proof.

II. Refined Enforcement Clauses for Cease-and-Desist Judgments

In prior commercial secret infringement trials, cease-and-desist judgments tended to be overly general, merely ordering defendants to cease infringement of technical secrets without specific enforcement standards or detailed disposal rules.  This allowed numerous infringing enterprises to evade judgment obligations by concealing confidential carriers, operating under shell companies, or transferring patents, rendering effective court judgments dead letters.  This case establishes clear judgment standards for cease-and-desist orders, refining six mandatory disposal requirements covering all dimensions including production and operation, patent disposal, carrier elimination, internal management control, personnel restraints, and public opinion rectification.  The specific enforcement norms are as follows:

A. Infringing enterprises must immediately cease independent production, outsourced processing, and sales of related products relying on the stolen confidential technologies, terminating all infringing business activities;

B. They are prohibited from applying for, transferring or licensing patents based on illegally obtained technical secrets, and may not evade liability for infringement through malicious patent abandonment;

C. All carriers containing disputed technical information including technical drawings, confidential hard drives, servers and storage devices shall be uniformly destroyed or handed over to the right holder for disposal, witnessed by both the court and the right holder;

D. The enterprise shall issue written formal notices to all shareholders, senior management, involved transferred technical staff and upstream/downstream partners to clarify the binding force of the infringement ban and prevent secondary infringement;

E. All employees and affiliated market entities that have accessed the disputed confidential technologies shall sign permanent non-disclosure commitments and bear confidentiality obligations in perpetuity;

F. The infringing enterprise shall publish a public notice of cessation of infringement in national-level mainstream media to fully eliminate adverse industrial impacts caused by the infringing acts.
This judicial rule fundamentally addresses the longstanding judicial challenges that cease-and-desist judgments are hard to enforce and easily evaded.

III. Newly Established Calculation Criteria for Liquidated Damages for Delayed Performance

This case establishes exclusive calculation rules for punitive liquidated damages for delayed performance applicable to intellectual property disputes.  To resolve the issue of infringing parties refusing to comply with effective court judgments, courts may separately determine liquidated damages for delayed performance related to cease-and-desist obligations by taking into account factors such as the subjective malice of the infringer, the scale of infringement, and actual losses arising from refusal to comply, forming a powerful judicial disciplinary deterrent.
In practical application, the liquidated damages rule established in this case differs from standard interest on delayed performance in ordinary civil litigation.  It combines compensatory and punitive effects tailored to the characteristics of intellectual property infringement claims, drastically raising the costs for infringing enterprises that refuse to abide by effective judgments.

IV. Punitive Damages

At the second instance hearing, the SPC calculated damages on the basis of the defendant’s actual profits from infringement and applied double punitive damages, resulting in a total compensation award exceeding RMB 630 million.  Meanwhile, it clearly defined the applicable criteria for punitive damages and methods for calculating infringer profits, providing clear judicial grounds for high-value claims in similar cases.
Regarding the ascertainment of profits from infringement, the evidentiary burden on right holders is greatly reduced.  The court clarified that public and internal revenue data including the infringing enterprise’s prospectus, annual financial statements and product sales ledgers may be directly adopted as the basis for calculating profits; right holders are not required to separately split specific profits generated by individual confidential components, which substantially lowers the burden of proving losses borne by right holders.
With respect to the conditions for applying punitive damages, the court held that enterprises engaging in mass poaching of competitors’ technical staffs, malicious theft of core technologies, and mass long-term production and sales of infringing products demonstrate extreme subjective malice, which constitutes the "serious circumstances" stipulated under the Anti-Unfair Competition Law.  Judicial authorities may impose punitive damages ranging from one to five times the amount of actual losses or infringer profits based on the circumstances of each case.  In this case, the court applied a double punitive damages multiplier to the portion of infringing acts subject to the punitive damages provisions introduced in the 2019 amendment of the Anti-Unfair Competition Law.

Conclusion

This case improves the judicial protection framework for commercial secrets across three dimensions: rules of evidence, detailed enforcement provisions, and disciplinary intensity.  As a landmark judgment governing the judicial protection of technical secrets in China, it unifies the trial and judgment standards for identical cases nationwide and carries important reference value for corporate compliance management.
For innovative science and technology enterprises, establishing sound internal confidentiality management systems, standardizing R&D workflows, and retaining complete evidence of R&D and personnel administration constitute core foundations for preventing technology leakage and securing successful litigation.  For enterprises seeking technological iteration by poaching technical teams from competitors, this case draws a clear legal red line.  Relevant enterprises are hereby reminded to strictly abide by intellectual property compliance bottom lines and eliminate malicious infringement when recruiting talent and pursuing technological innovation in their business operations.