DeHeng Lawyers Successfully Represented Trade Secret Infringement Case, Obtaining Not-Guilty Verdict in Retrial

2024-12-12

Recently, the project team led by lawyer Chu Weishu from DeHeng’s Shanghai Office successfully represented a high-tech enterprise in a criminal case involving alleged trade secret infringement. The defense arguments were fully adopted by the retrial court, which rendered a not-guilty verdict for the defendant and the defendant company.  

Case Review:  

The client was the actual controller of a high-tech enterprise that hired a former employee of another company for technology research and development. The former company later claimed that the client and the enterprise used its technology in their project products, infringing its trade secrets. The prosecution alleged that the employee violated confidentiality obligations and committed trade secret infringement and that the client and the enterprise knowingly used the trade secrets, also committing trade secret infringement, and thus filed a public prosecution.  

The case underwent five court hearings, and the first-instance court still found the defendant guilty of trade secret infringement, sentencing them to one year of imprisonment with a one-year probation. Dissatisfied with the guilty verdict, the defendant appealed. During the second-instance trial, DeHeng's lawyers focused on debating the calculation of the case value. The second-instance court, after review, found that the first-instance judgment was unclear in facts, insufficient in evidence, and procedurally flawed, and thus revoked the original judgment and remanded the case for retrial. During the retrial, DeHeng lawyers again analyzed the employee’s actions and the case value calculation, providing detailed arguments on the basis for profit margin determination, the concept of modules, the specific proportion of modules, and the rationale of adopting modules in this case. After three court hearings, the retrial court ultimately adopted the defense arguments, considered the module proportion, and ruled that the case did not meet the criminal standard, acquitting the defendant and the defendant company in accordance with the law.