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Chinese court hands down milestone IP ruling

Shanghai worker for Eli Lilly and Co. forced to pay 20 million yen for stealing trade secrets

A Shanghai court recently issued China’s first ban on trade secrets, which has been called a landmark ruling for intellectual property worldwide.

Eli Lilly and Co., a pharmaceutical company based in Indianapolis, alleged that a former research center employee with the last name Huang downloaded 21 secret documents without authorization. The company says Huang had signed a confidentiality agreement and was legally obligated not to disclose confidential and proprietary information. The company fired Huang upon discovering the downloads, but he refused to delete or return the secret documents.

Lilly sued for an injunction to prevent Huang from using and circulating these trade secrets, and it also asked for compensation of 20 million yuan ($3.3 million). The company also asked for custody of these secrets to prevent possible losses before the case hearing opened.

Judge Liu Junhua ruled in favor of Lilly, the first intellectual property victory of its kind since the Chinese government enacted a revised Civil Procedure Law on Jan. 1. Liu told Chinese-language newspaper Legal Daily: “[T]rade secrets as a kind of intellectual property rights were not properly protected under judicial practices for a long time,” and that the Civil Procedure Law has filled the gap in protection of trade secrets.

According to China Daily, the court’s ruling should establish a precedent in similar cases nationwide.

 

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