How to determine jurisdiction in trade secret cases

Supreme Court: How should jurisdiction be determined for trade secret cases?
Under the jurisdiction of the people's courts of the place of infringement and the defendant's domicile
Reading tip: In the early stage of assisting the client in filing a lawsuit and determining the secret points, in addition to assisting the client in determining the number of secret points to be protected, the specific content of the secret points, accurately identifying whether the technical information that the client wishes to protect belongs to public knowledge, identifying whether the technical information protected by the client is legal, and whether it can be protected as a trade secret, it is also necessary to assist the plaintiff in selecting and determining the court with jurisdiction, and where to file a lawsuit that is more conducive to case review. In this issue, Lawyer Li Yingying shares his experience in handling trade secret cases with you, based on a case from the Supreme Court.
Summary of the judgment: In cases of trade secrets, the people's courts of the place of infringement and the defendant's domicile both have jurisdiction. If there are multiple defendants in the same lawsuit, and each defendant's domicile and habitual residence are within the jurisdiction of two or more people's courts, each court has jurisdiction.
Case summary:
1. On October 26, 2021, the plaintiff Anhui Sanqi Network Technology Co., Ltd. (hereinafter referred to as "Anhui Sanqi Company") and Guangzhou Sanqi Network Technology Co., Ltd. (hereinafter referred to as "Guangzhou Sanqi Company") sued the defendants Nanchang Zhangkun Network Technology Co., Ltd. (hereinafter referred to as "Nanchang Zhangkun Company"), Yan Jie, Guangzhou Junhai Network Technology Co., Ltd. (hereinafter referred to as "Guangzhou Junhai Company"), and Guangzhou Zhangkun Network Technology Co., Ltd. (hereinafter referred to as "Guangzhou Zhangkun Company") for a dispute over infringement of technical secrets, which was filed and accepted by the Guangzhou Intellectual Property Court.
2. The defendant Nanchang Zhangkun Company raised an objection to jurisdiction during the submission of the defense, stating that lawsuits arising from infringement shall be under the jurisdiction of the people's court in the place of infringement or the defendant's domicile. The domicile of the defendant Nanchang Zhangkun Company is located in Honggutan District, Nanchang City, Jiangxi Province. In accordance with the jurisdiction of the Nanchang Intellectual Property Court, a specialized judicial institution within the Nanchang Intermediate People's Court, first instance intellectual property civil and administrative cases related to patent disputes that occur within the jurisdiction of Jiangxi Province should be under the jurisdiction of the Nanchang Intermediate People's Court. Therefore, we request that this case be transferred to the Nanchang Intermediate People's Court for trial.
3. On August 4, 2022, the Guangzhou Intellectual Property Court held that this case was a lawsuit filed for infringement of technical secrets. The courts of the place where the infringement occurred and the defendant's domicile had jurisdiction over this case. There were multiple defendants in this case, and the plaintiff had the right to choose any one of the defendant's domicile courts to file the lawsuit. However, the defendants Yan Jie, Guangzhou Junhai Company, and Guangzhou Zhangkun Company all had their domicile in Guangzhou, Guangdong Province, within the jurisdiction of the court. Therefore, the original court had jurisdiction over this case and ruled to dismiss the defendant Nanchang Zhangkun Company's objection to jurisdiction.
4. The defendant Nanchang Zhangkun Company is dissatisfied and has appealed to the Supreme People's Court.
5. On November 17, 2022, the Supreme People's Court rejected the appeal of the defendant Nanchang Zhangkun Company in the second instance and upheld the original ruling.
Key points of dispute in the case:
Should this case be transferred to the Intermediate People's Court of Nanchang City, Jiangxi Province for trial
Key points of the Supreme Court's judgment:
1、 The jurisdiction of infringement cases shall apply to trade secret cases, and shall be under the jurisdiction of the people's court of the place where the infringement occurred or the defendant's domicile.
The Supreme Court holds that Article 29 of the Civil Procedure Law stipulates that lawsuits brought for infringement shall be under the jurisdiction of the people's court of the place where the infringement occurred or where the defendant resides. Article 22 (3) and Article 36 stipulate that if several defendants in the same lawsuit have their domicile or habitual residence within the jurisdiction of two or more people's courts, each court shall have jurisdiction; In a lawsuit where two or more people's courts have jurisdiction, the plaintiff may bring a lawsuit to one of the people's courts. If the plaintiff brings a lawsuit to two or more people's courts with jurisdiction, the court that first filed the case shall have jurisdiction.
2、 The plaintiff can choose one of the jurisdictional courts to sue.
The Supreme Court holds that, according to the above provisions, the people's courts of both the place of infringement and the defendant's domicile have jurisdiction over lawsuits filed for infringement. If there are multiple defendants in the same lawsuit, and each defendant's domicile and habitual residence are within the jurisdiction of two or more people's courts, each court has jurisdiction, and the plaintiff can choose one of the courts with jurisdiction to file the lawsuit based on this. In this case, Anhui Sanqi Company and Guangzhou Sanqi Company filed a lawsuit against Yan Jie, Guangzhou Junhai Company, Guangzhou Zhangkun Company, and Nanchang Zhangkun Company as co defendants in the original court. Anhui Sanqi Company and Guangzhou Sanqi Company have the right to choose the court where either defendant resides to initiate the lawsuit.
3、 The three defendants in this case are all located in Guangzhou, and the Guangzhou Intellectual Property Court has jurisdiction over them.
The Supreme Court holds that the residences of Yan Jie, Guangzhou Junhai Company, and Guangzhou Zhangkun Company are all located in Guangzhou City. According to Article 1 and Article 2 of the "Provisions of the Supreme People's Court on the Jurisdiction of Intellectual Property Courts in Beijing, Shanghai, and Guangzhou", as well as the "Reply of the Supreme People's Court on Agreeing to the Continued Jurisdiction of Patent and Other Intellectual Property Cases by the Two Level Courts of Shenzhen City in Guangdong Province" and the "Reply of the Supreme People's Court on Agreeing to the Establishment of Special Trial Institutions within the Intermediate People's Court of Shenzhen City and the Centralized Jurisdiction of Some Intellectual Property and Financial Cases", the Guangzhou Intellectual Property Court has cross administrative jurisdiction over the first instance civil cases of patents, new plant varieties, integrated circuit layout designs, technical secrets, and computer software in Guangdong Province, except for Shenzhen City, The substantive dispute involved in this case is a first instance intellectual property civil case involving technical secrets. According to the provisions of the above-mentioned laws and judicial interpretations, the original court has jurisdiction over this case. Anhui Sanqi Company's choice to file a lawsuit with the original court is a manifestation of its lawful exercise of the right of litigation disposal and does not violate legal provisions.
4、 Other jurisdictional connection points do not affect the Guangzhou Intellectual Property Court's lawful acceptance and review.
The Supreme Court believes that the existence of other jurisdictional nodes such as the domicile of Nanchang Zhangkun Company does not affect the original court's exercise of jurisdiction over this case. The appeal reasons for Nanchang Zhangkun Company's claim to transfer this case to the Intermediate People's Court of Nanchang City, Jiangxi Province for trial lack legal basis, and this court does not support it.
In summary, the appeal request of Nanchang Zhangkun Company cannot be established and should be rejected; The original ruling is correct and should be upheld.
Case source:
Civil Jurisdiction Appeal and Jurisdiction Ruling for Disputes over Infringement of Technical Secrets by Nanchang Zhangkun Network Technology Co., Ltd., Anhui Sanqi Network Technology Co., Ltd., etc. [Case No.: (2022) Supreme People's Court Zhi Min Xia Zhong No. 391]
Lawyer Li Yingying commented:
1. It should be noted that there is controversy over whether the jurisdiction of trade secret cases can simply apply the jurisdiction provisions of infringement cases.
In the famous case of the Supreme People's Court Gazette, "Different Jurisdiction over Disputes over Infringement of Trade Secrets by Four Dimensional Industry (Shenzhen) Co., Ltd., Four Dimensional Enterprise Co., Ltd., Avery Dennison Co., Ltd., Avery (Guangzhou) Co., Ltd., Avery (Kunshan) Co., Ltd., Avery (China) Co., Ltd., Lishui Yili Printing Factory in Nanhai City, and Dongsheng Fenjiang Printing Factory Operation Department in Huanshi Town, Foshan City" (Case No.: Civil Ruling No. 10 of 2007), the Supreme People's Court held that "although Four Dimensional Company and Four Dimensional Shenzhen Company accused Lishui Printing Factory and Fenjiang Operation Department (equivalent to Defendants 2 and 3 in this case) of selling infringing products manufactured by infringing on the plaintiff's trade secrets in the lawsuit, (Consistent with the situation in this case) However, according to Article 10 of the Anti Unfair Competition Law, the sale of infringing products manufactured in violation of trade secrets does not fall under the category of infringing trade secrets listed in the Anti Unfair Competition Law. The accused sales of infringing products manufactured in violation of trade secrets by the Hometown Water Printing Factory and Fenjiang Business Department are not considered as infringing trade secrets under the Anti Unfair Competition Law. Therefore, the Intermediate People's Court of Foshan City, Guangdong Province cannot have jurisdiction over this case because Lishui Printing Factory and Fenjiang Business Department are accused of selling infringing products manufactured by infringing trade secrets The Supreme People's Court further determined that "generally speaking, the place where the use of trade secrets is carried out and the place where the results occur coincide. That is to say, the process of using trade secrets is usually the process of manufacturing infringing products. When the infringing products are manufactured, the infringement results of using trade secrets occur simultaneously, and it is not appropriate to regard the place of sale of the infringing products as the place where the infringement results of using trade secrets occur", and ruled to transfer jurisdiction.
Therefore, the act of selling infringing products does not fall under the legal category of infringing trade secrets, and the place of sale of infringing products cannot be used as a connecting point for the jurisdiction of this case.
2. The jurisdiction of trade secret cases is different from that of patent cases
According to the current judicial judgment, in most cases, the court will not determine that trade secret cases are under the jurisdiction of the court where the infringing product is sold. The majority of opinions believe that the jurisdiction should be based on the court where the infringing defendant (infringing product manufacturer) resides or where the infringing product is manufactured.
3. Special attention should be paid to the special jurisdiction regulations issued by the Supreme Court and various regions regarding trade secret cases
Lawyer Li Yingying reminds everyone that currently, the Supreme Court has issued special documents to regulate the jurisdiction of trade secret cases in various regions, and various regions have also issued documents to determine the jurisdiction rules of trade secret cases in their respective regions to varying degrees. In addition to paying attention to the general provisions on jurisdiction over infringement cases in the Civil Procedure Law, attention should also be paid to these special provisions mentioned above. Before filing a lawsuit, the plaintiff should entrust a professional lawyer to determine the court with jurisdiction, in order to avoid wasting valuable time. Next, Lawyer Li Yingying will systematically organize the specific jurisdictional regulations issued by the Supreme Court and various regions for everyone.

Professional Background Introduction: Li Yingying, a lawyer at Beijing Yunting Law Firm, graduated from the Chinese Academy of Social Sciences with a Master's degree in Civil and Commercial Law (with a focus on Company Law). He specializes in practical fields such as civil and criminal trade secrets, civil and commercial litigation and arbitration, preservation and enforcement. He has successfully handled multiple major and complex cases in the Supreme People's Court and various provincial higher people's courts, with a total amount of over 10 billion yuan. Lawyer Li Yingying has been deeply involved in civil disputes and criminal offenses related to intellectual property for many years, and has conducted in-depth research on legal issues related to intellectual property (especially trade secrets). Lawyer Li Yingying has won multiple civil cases involving intellectual property rights, representing multiple clients as plaintiffs and successfully seeking triple punitive damages from the court. The client has successfully obtained a compensation amount of 202 million yuan (the highest compensation amount in China's current trade secret civil cases, exceeding the previous highest compensation amount of 159 million yuan in the vanillin case). The defendant clients have successfully won court judgments that do not constitute infringement, and the victim companies have successfully initiated criminal cases, pursued criminal prosecution, and successfully obtained criminal punishment for criminals; The handling of criminal cases involving trade secret crimes on behalf of multiple defendants/defendant units has also achieved a good effect of being acquitted and the prosecutor's office deciding not to prosecute. In 2023, the civil case of trade secrets represented by Lawyer Li Yingying was included in the intellectual property white paper of a certain higher people's court. In April 2024, the civil case of trade secrets fully represented by Lawyer Li Yingying was rated as a typical case by the Supreme People's Court. In April 2024, another civil case involving trade secrets represented by Lawyer Li Yingying (representing the plaintiff) was rated by a provincial higher people's court as the only case with the highest compensation amount in the province. Meanwhile, Lawyer Li Yingying also has rich project experience in the field of trade secret system construction. Assisted multiple corporate clients in completing legal due diligence on the operation of their business secret confidentiality system, and successfully established a comprehensive business secret confidentiality system for multiple corporate clients. In the field of civil and commercial dispute resolution, Lawyer Li Yingying has handled a large number of major, difficult and complex cases, and has successfully obtained court support for clients' litigation requests, second instance verdicts and other results, receiving unanimous praise and recognition from numerous clients. In the field of preservation and enforcement, Lawyer Li Yingying has hosted a large number of difficult enforcement cases, such as: during the epidemic lockdown period, he acted as an agent for clients to preserve billions of cash from defendants within a week; The proxy client successfully revoked the court's freeze on the company's business information; Successfully revoking the auction conducted by the court on behalf of the client; The proxy client successfully blocked the auction of land and factory buildings by the applicant for execution, ultimately striving for a satisfactory outcome of execution and settlement. Up to now, lawyer Li Yingying has published more than 100 professional articles on topics such as trade secrets, company practice, preservation and enforcement on official account such as "The Empire of Jurists", "Civil and Commercial Judgment Rules", "Preservation and Enforcement", and many articles have been reprinted by the Supreme People's Court and local courts, widely praised by professionals. In 2022, Lawyer Li Yingying, based on years of experience in handling a large number of execution review related businesses, guided by real cases, summarized and categorized the main legal issues, typical judgment rules, risk response strategies, and solution suggestions in various business scenarios, and co authored the publication of "Preservation and Execution: Practical Guidelines for Execution Objections and Execution Objection Litigation". Next, the Li Yingying legal team will gradually publish books on practical trade secret litigation and technical contract disputes to better serve clients.