Recently, the grand debut of domestic cars such as Xiaomi, NIO, and Ideal has attracted everyone's attention. Technology has changed life, and this concept is constantly moving towards new stages in the automotive industry. However, the cutting-edge technology of autonomous driving has long been subject to disputes over patents, technical secrets, and other related issues. The reasons for this are not only the high, precision, and cutting-edge characteristics of the field and the scarcity of top talents, but also the inherent conflict between personnel mobility and trade secret protection.

1、 The field of autonomous driving has become a hot topic of trade secret infringement

According to incomplete statistics, from 2017 to 2023, there were a total of 12 intellectual property infringement disputes in the field of autonomous driving. The parties involved included leading companies in the autonomous driving field such as Baidu, Xiaoma Zhixing, Wenyuan Zhixing, and Hesai Technology. The main causes of the disputes were trade secrets and patent infringement, with the main focus on the fields of lidar and source code. [1] The field of autonomous driving gathers cutting-edge technology, and in the upcoming era of intelligence, the field of autonomous driving is a high ground for technology companies to compete for. For some startups and technology companies seeking higher quality development, cutting-edge talents are the core. This has led to more frequent employee turnover in the field of autonomous driving through talent grabbing, accompanied by continuous trade secret infringement disputes caused by departing employees. There are three incidents that have attracted widespread attention:

In 2017, Baidu sued Wang Jin, former general manager of its autonomous driving division, and Wang Jin's American company, Jingchi, to the Beijing Intellectual Property Court for infringing on trade secrets. [2] Baidu requests the court to order Wang Jin and his company to immediately stop infringing on Baidu's trade secrets and compensate him for economic losses of 50 million yuan. Baidu filed a lawsuit alleging that Wang Jin did not return any computers or other items containing important trade secrets to Baidu when he left. However, Wang Jin claimed to have "lost" the computer and printer that contained a large amount of trade secrets. After two court trials, the case ultimately ended with Baidu withdrawing its lawsuit against Jingchi Technology and Wang Jin leaving Jingchi Technology.

Secondly, Tesla sued Cao Guangzhi in March 2019, claiming that from March to December 2018, Cao Guangzhi backed up company source code multiple times, including company firmware, Autopilot autonomous driving, and neural networks, and uploaded data to his personal iCloud account, totaling over 300000 copies. After joining Xiaopeng Motors, Cao Guangzhi also accessed source code files through multiple devices. In July 2019, Cao Guangzhi admitted to most of Tesla's accusations, but stated that attempting to delete the source code before leaving Tesla was unintentional, and that he did not disclose the source code to Xiaopeng Motors or any other third party or use it for their benefit. Afterwards, the two sides reached a settlement agreement in 2021, and the dust settled on this matter. [4]

The third is the case of Xiaoma Zhixing suing Qingtian Zhika for infringing on trade secrets. [5] In 2022, L4 level autonomous driving company Xiaoma Zhixing sued former technicians Pan Zhenhao, Sun Youhan, and their operated Qingtian Zhika company to the Beijing Intellectual Property Court for infringing on trade secrets. Xiaoma Zhixing requested the court to order the defendant to immediately stop infringing on Xiaoma Zhixing's trade secrets, and ordered the defendant to jointly compensate for economic losses and reasonable expenses totaling RMB 60 million, and bear all litigation costs. The Beijing Intellectual Property Court accepted the case. Pan Zhenhao was originally the CTO of Xiaoma Zhixing's truck business, Xiaoma Zhika, and Sun Youhan was originally the planning and control leader of Xiaoma Zhika's US team. After resigning from Xiaoma Zhixing at the end of 2021, the two founded the autonomous truck company Qingtian Zhika, serving as the CEO and CTO of Qingtian Zhika, respectively.

In April 2023, Qingtian Zhika stated that it had recently filed a counterclaim against Xiaoma Zhixing [6], and stated that the lawsuit filed by Xiaoma Zhixing at a critical stage of Qingtian Zhika's financing was "contrary to facts and with impure purposes". Therefore, Qingtian Zhika filed a counterclaim, and the court has now filed a case. Xiaoma Zhixing publicly responded that former employees of Xiaoma Zhixing, Pan Zhenhao and Sun Youhan, founded a new company called Qingtian Zhika after leaving their jobs, engaged in the research, testing, and application of autonomous driving technology. However, the research and development process is suspected of infringing on Xiaoma Zhixing's trade secrets. Xiaoma Zhixing has the right to protect its legitimate rights and interests in accordance with the law, and we believe that the court will make a fair judgment.

The above three disputes are all caused by the flow of core technology talents, which indirectly reflect the characteristics of technology intensive, huge investment, and shortage of core talents in the field of autonomous driving. In response to the continuous infringement of trade secrets disputes, on the one hand, it is to promote technological innovation and ensure employee employment freedom, and on the other hand, it is to protect the achievements of enterprise research and development and training in the early stage, and maintain the competitive interests enjoyed by enterprises based on self-developed technology secrets. The key to balancing the protection of trade secrets and the free movement of employees fairly and reasonably lies in establishing the boundaries of the protection scope of trade secrets and determining whether the behavior of departing employees constitutes infringement of trade secrets.

2、 Accurately defining the scope of protection for trade secrets

（1） The constituent elements of trade secrets

Article 9, Paragraph 4 of the Anti Unfair Competition Law of the People's Republic of China (hereinafter referred to as the "Anti Law") of 2019 stipulates that trade secrets referred to in this Law refer to technical information, business information, and other commercial information that are not known to the public, have commercial value, and have been subject to corresponding confidentiality measures by the rights holder. Constituent elements: 1. Not known to the public; 2. It can bring economic benefits to the rights holder and has commercial value; 3. The rights holder has taken confidentiality measures. It is commonly referred to as secrecy, value, and confidentiality. Regarding the specific objects of trade secret protection, Article 1 of the Supreme People's Court's Several Issues on the Application of Law in the Trial of Civil Cases of Infringement of Trade Secrets (Fa Shi [2020] No. 7, hereinafter referred to as the "Trade Secret Interpretation") provides examples, mainly including the following two categories: structure, raw materials, components, formulas, materials, samples, styles, plant new variety breeding materials, processes, methods or their steps, algorithms, data, computer programs and related documents related to technology; Creative, management, sales, finance, planning, samples, bidding materials, customer information, data, and other information related to business activities.

（2） Secret points of trade secrets

In judicial practice, the concepts of "secret points" and "secret points" are often used to describe the protected trade secrets in specific cases, which plays an important role in accurately defining the scope of trade secret protection. The confidentiality in the constituent elements of trade secrets refers to the fact that relevant technical and operational information is "not widely known and easily accessible to relevant personnel in the field", that is, "not known to the public". The secret point is the above-mentioned information that is not known to the public. Specifically, the secret points of technology secret cases refer to specific technical solutions or information; The secret points of business secret cases refer to special customer depth information and other business information that is different from relevant publicly known information. Taking technical secrets as an example, technical secrets include product formulas, process flows, technical secrets, designs, drawings (including sketches), test data and records, computer programs, etc. After removing the publicly known and patented technologies from the above technical information, the remaining is the technical information to be protected by trade secrets [7].

（3） Definition of Secret Points for Trade Secrets

The process of defining the scope of confidential points is also the process of judging the confidentiality requirements, and the main task is to select the non-public knowledge part from all relevant information as the basis for claiming rights. When the court makes a determination, in addition to relying on the appraisal opinion issued by the appraisal agency to determine whether the technical information is "known to the public", it also examines whether the relevant public is generally aware of and easily accessible, and whether the relevant public can directly obtain the technical information in the product by observing its appearance. For the argument of value and confidentiality, the accuracy requirement is not so high, and it does not necessarily have to be based solely on the claimed confidential point itself. It can also be argued based on the carrier of the confidential point or the overall information where the confidential point is a component. For example, if the claimed secret point is a specific technical feature, it can demonstrate the commercial value and confidentiality of the technical feature itself, or demonstrate the value and confidentiality of the claimed secret point by explaining the overall value and confidentiality of the technical solution containing the technical feature, or by implementing reasonable confidentiality measures on the drawings carrying the technical solution. However, even with a certain degree of expansion, the argument for confidentiality needs to have corresponding specific and clear confidentiality points when expanding to the carrier of trade secrets. In practice, the right holder usually argues for confidentiality requirements based on the confidentiality agreement and internal confidentiality system they have signed with the counterparty. However, if the right holder's confidentiality system and agreement are only vague and do not specify specific confidential information and scope, it cannot generally be determined that the right holder has taken reasonable confidentiality measures. [9]

3、 Reasonably determine whether it constitutes infringement of trade secrets

（1） Resigning employees can constitute the subject of infringement of trade secrets

Article 9 of the 2019 Anti Law stipulates that business operators shall not engage in any of the following acts that infringe upon trade secrets: (1) obtain the trade secrets of the rights holder through theft, bribery, fraud, coercion, electronic intrusion, or other improper means; (2) disclose, use, or allow others to use the trade secrets of the rights holder obtained through the aforementioned means; (3) disclose, use, or allow others to use the trade secrets they hold in violation of confidentiality obligations or the requirements of the rights holder for keeping trade secrets; (4) instigate, entice, or assist others to violate confidentiality obligations or violate the requirements of the rights holder for keeping trade secrets, and obtain, disclose, use, or allow others to use the trade secrets of the rights holder. Other natural persons, legal persons, and non legal persons other than business operators shall also disclose, use, or allow others to use the trade secrets of the rights holder. If an organization carries out the illegal acts listed in the preceding paragraph, it shall be deemed as an infringement of trade secrets. If a third party knowingly or should have known that an employee, former employee, or other unit or individual of the right holder of trade secrets carries out the illegal acts listed in the first paragraph of this article but still obtains, discloses, uses, or allows others to use the trade secrets, it shall be deemed as an infringement of trade secrets Before the amendment of the Anti Unfair Competition Law in 2019, there was always controversy over whether employees and former employees could be legal subjects for infringing trade secrets. After the anti legal amendment, the newly added Article 9 (2) expands the scope of the infringing party and makes a clear statement from the legislative level on whether employees and former employees can be adjusted as objects of Article 9. Meanwhile, Article 9, Paragraph 3, which states that "third parties maliciously obtain, use or disclose trade secrets," also involves employees and former employees. In view of this, Article 15 of the Evidence Reference specifically provides a reference on how the plaintiff should provide evidence to prove that the defendant is its employee or former employee, and whether they have channels or opportunities to obtain the plaintiff's trade secrets. That is to say, the plaintiff can provide evidence to prove that the defendant is its business and management personnel, as well as other personnel with labor relations. The plaintiff can also provide evidence to prove that the defendant has channels or opportunities to obtain the plaintiff's trade secrets and their carriers from several aspects, such as whether the defendant's position, responsibilities, and authority are related to the trade secrets in question, whether the work they undertake or the tasks assigned by the unit are related to the trade secrets in question, whether they have participated in production and business activities related to the trade secrets, whether they have safeguarded, used, stored, copied, controlled, or otherwise contacted and obtained the trade secrets and their carriers.

（2） The use of "mental knowledge" by departing employees does not constitute infringement of trade secrets

In the case of unfair competition disputes between Shandong Food Import and Export Company and Ma Daqing and others, the Supreme People's Court clearly pointed out that "as workers with learning ability, employees will inevitably master and accumulate knowledge, skills, and experience related to their work in the enterprise. Except in the case of trade secrets belonging to the unit, these knowledge, skills, and experience constitute an integral part of the employee's personality and are the foundation of their survival and labor abilities... In the absence of violating non compete obligations and infringing on trade secrets, if the employee uses the knowledge, experience, and skills learned in the original employer to serve other units that compete with the original unit, it is not appropriate to simply use the knowledge, experience, and skills learned in the original employer to serve other units that compete with the original unit." The principle of Article 2 of the Fair Competition Law stipulates that it constitutes unfair competition

The basic legal principles of this case are included in Article 13, Paragraph 2 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases of Unfair Competition, and are continued in Article 2, Paragraph 2 of the Interpretation of the Supreme People's Court on Trade Secrets: "If a customer engages in market transactions with the employee's unit based on their personal trust in the employee, and the employee can prove that the customer voluntarily chooses to engage in market transactions with themselves or their new unit after leaving the company, it should be determined that no unfair means have been taken, except where there is another agreement between the employee and the original unit." [11] The Supreme People's Court has continued to express similar views in relevant cases, such as "Madakor Tianjin Technology Co., Ltd. and Huayang Xinxing Technology Tianjin Group Co., Ltd. have infringed on commercial activities." The "Secret Dispute Case" [12] and the "Jiaxing Zhonghua Chemical Co., Ltd. and Wanglong Group Co., Ltd. and other companies involved in the infringement of trade secrets dispute case" [13], where punitive damages were applied for the first time in the infringement of trade secrets case.

（3） Resigning employees who take advantage of their positions to steal trade secrets and illegally disclose and use them shall constitute infringement of trade secrets.

The information naturally memorized in the performance of duties is legally obtained, because "the law cannot erase a person's memory.". Behaviors that violate normal performance requirements, such as copying or transmitting documents without authorization, intentionally memorizing technical information or customer lists for the purpose of resignation, and other information collection and preparation activities; Even if the recording of documents is required for normal performance of duties, concealing relevant documents at the time of resignation constitutes "obtaining the right holder's trade secrets through improper means" as referred to in Article 9 (1) (1) of the Anti Law of China. For example, a former employee who is the project leader of the company and has legal access to relevant technical information during their tenure, but violates the company's confidentiality management regulations by sending files to their personal email without authorization through the company's email system. This behavior constitutes the use of "improper means". [14] Essentially, these behaviors violate the loyalty obligations of employees during the labor contract period, requiring them not to process the information they obtain in a way that harms the interests of the unit. Intentionally obtaining this information for post employment use also violates their duty of loyalty. The act of infringing on trade secrets is regulated by the Anti Unfair Competition Law, and the core standard lies in its "unfairness". On the one hand, it is reflected in its violation of the spirit of contracts such as the Confidentiality Agreement and the Competition Agreement it has signed; On the other hand, it is reflected in the violation of the moral principles of loyalty and integrity in performing duties. As in the case of "Ruichang Company suing its former employees and the newly established Mingyuan Company for unfair competition" [15], the Supreme People's Court believes that in the trial of business secrets disputes involving customer information, it is necessary to handle the relationship between protecting business secrets and the free choice of employment, non competition restrictions, and reasonable talent flow of employees, in order to determine whether departing employees constitute infringement. Not only should we consider whether employees have access to customer information, but we also need to consider whether their actions are unjustified and whether they comply with specific legal provisions for infringing on trade secrets. We should not only stop illegal activities that infringe on business secrets, but also protect the right of employees to make reasonable use of the knowledge, experience, and skills accumulated in their work after leaving. After an employee resigns, restricting their freedom to choose a career is generally based on the existence of legal or agreed non compete obligations. For customer information obtained by employees due to their normal work, unless the original unit can prove that the use of such customer information by employees or their new unit to obtain competitive advantages is unfair, the use of such customer information by employees or their new unit is not necessarily illegal.

epilogue

In the process of actual management, enterprises also need to make meticulous and systematic arrangements for their employees in order to achieve proper management and maintenance of trade secrets. The high mobility of technology talents in the field of autonomous driving also calls for a more comprehensive system of trade secret management and legal system. I believe that with a more accurate definition of the scope of trade secret protection and a more reasonable definition of infringement of trade secrets, the relationship between trade secret protection and the free flow of scientific and technological talents can be better balanced.

References and comments (slide down to view)
[1] "Why there are constant disputes in the field of autonomous driving", published in China Automotive News in May 2023.
[2] "Baidu sues Wang Jin of Jingchi Technology for infringing on trade secrets and demands compensation of 50 million yuan", published in Observer Net in December 2017.
[3] "Tesla sues former Chinese employees, why are there frequent disputes over autonomous driving technology theft?", published in "Meijingwang" in March 2019.
[4] "Tesla and former employees of Xiaopeng have reached a settlement on intellectual property disputes, and the competition for autonomous driving has escalated." In April 2021, First Financial News.
[5] "Behind the lawsuit filed by Xiaoma Zhixing against Qingtian Zhika: Robotruck may become a trillion level track, and autonomous driving talents frequently leave," published in Meijing Net in August 2022.
[6] "Xiaoma Zhixing sues Qingtian Zhika for stealing trade secrets and being accused of abusing intellectual property rights." Caixin Net, April 2023.
[7] Luo Yun: "Secret Points and Burden of Evidence in Civil Infringement Cases of Trade Secrets", published in the 4th issue of China Lawyers in 2021, page 65.
[8] In the case of a trade secret infringement dispute between Gangdong Technology Company and Ruian Technology Company, the court found that the technical information involved in the main board circuit board, mirror closed-loop control drive circuit, and other components of a "infrared spectrometer" developed by Gangdong Technology Company had a certain degree of technical complexity and concealment. After appraisal, the technical information was not publicly disclosed through other literature materials. Although a certain company in the United States also produces similar infrared spectrometers, external observation and non-destructive disassembly of the product appearance alone cannot and cannot obtain relevant technical information. Obtaining technical information from products already sold in the market still requires extensive technical testing and parameter analysis, which is not a situation where the relevant public can directly obtain it by observing the product. Taking into account the appraisal conclusion of the appraisal institution and the difficulty of obtaining technical information through observing the products of outsiders during the trial, it is determined that the technical information in the "infrared spectrometer" developed by Gangdong Technology Company is not known to the public.
[9] As in the case (2016) Zhe 0110 Min Chu 17163, the court held that the confidentiality scope in the "Technical Confidentiality Agreement" formulated and implemented by the plaintiff and the confidentiality agreement signed with the defendant only includes the plaintiff's general provisions on "new projects, new designs, special production processes and patented technologies; production processes, process drawings, operation methods..." These provisions cannot form a clear correspondence with the secret points claimed by the plaintiff in this case. The defendant also cannot clearly recognize that the secret points claimed by the plaintiff in this case are technical secrets that they have a confidentiality obligation due to these agreements.
[10] Please refer to the Civil Ruling of the Supreme People's Court (2009) Minshenzi No. 1065.
[11] The Higher People's Court has added rules on mental knowledge, such as the "Guidelines for the Trial of Civil Disputes Involving Infringement of Trade Secrets by Jiangsu Provincial Higher People's Court (Revised Edition)" (2021), Section 3.6 "Review of Common Defense Reasons of Defendants", which refers to it as "the right to survival of employees". "The knowledge, skills, and experience related to the work that employees acquire and accumulate in the process of working in the unit are fundamental elements of their survival"; This regulation refers to the content of Article 2 of the Interpretation of Trade Secrets as "personal trust". The burden of proof in Article 2 of the "Interpretation of Trade Secrets" is detailed in paragraph 22 of the "Reference for Evidence in Civil Cases of Infringement of Trade Secrets by Beijing Intellectual Property Court" (2021), which is referred to as the "personal trust" defense.
[12] Please refer to the Civil Judgment No. 268 of the Supreme People's Court (2019).
[13] Please refer to the Civil Judgment No. 1667 of the Supreme People's Court (2020).
[14] Please refer to the Civil Judgment No. 1687 of the Supreme People's Court (2021).
[15] Please refer to the Civil Judgment No. 726 of the Supreme People's Court (2020).