China updates administrative trade secret protection: SAMR’s new provisions

Introduction

On February 24, 2026, the State Administration for Market Regulation (“SAMR”) issued the Provisions on the Protection of Trade Secrets (the “Provisions”), which have taken effect on June 1, 2026. The Provisions repeal the Several Provisions on Prohibiting Infringement of Trade Secrets issued in 1995 and mark the most substantial update to China’s administrative trade secret enforcement framework in nearly thirty years. Expanded from 12 articles to 31, the Provisions reflect both the evolution of China’s economy and the increasing centrality of data‑driven and R&D‑intensive business models.

It is important to distinguish the scope of the Provisions from that of the Anti‑Unfair Competition Law (“AUCL”). The AUCL remains the primary source of substantive law governing trade secret protection in China, setting out the core definition of trade secrets, the elements of infringement, and the available civil, administrative and criminal liabilities. The Provisions do not amend or expand those substantive rules, as they are merely a departmental rule governing SAMR’s administrative enforcement layer, and cannot amend the AUCL, including for civil/criminal litigation. Instead, they operate within the administrative enforcement framework, providing detailed guidance to market regulation authorities on how trade secret cases should be investigated, assessed, and penalized.

Within that administrative enforcement context, the Provisions significantly clarify how trade secret protection is applied in practice. They provide more detailed descriptions of protectable information, address issues of widespread concern such as employee departures and digital misappropriation, and introduce procedural mechanisms that lower evidentiary barriers in administrative investigations. At the same time, they reaffirm limits on protection by expressly preserving space for legitimate competitive conduct.

Set out below are the key changes introduced by the Provisions and their practical implications for companies operating in or with China.

Key changes

• Updated definition of protectable trade secrets; (Article 5)

The Provisions aligned the definition of trade secrets with the most recent version of the AUCL to expressly encompass both technical information and commercial information, provided the information is not publicly known, has commercial value, and is subject to reasonable confidentiality measures.

• Explicit inclusion of data, algorithms, and software related information; (Article 5)

Technical information eligible for protection is expressly described to include data, algorithms, computer programs, code, and related materials. This provides clearer administrative legal basis for protecting digital assets that were previously subject to inconsistent treatment in enforcement practice.

• Protection extended to interim research results and failed experiments; (Article 7)

The Provisions confirm that interim R&D results and failed experimental data may qualify as trade secrets if they have commercial value, strengthening protection for companies in life sciences, advanced manufacturing, and technology sectors where negative test results are strategically important in trial and error development.

• Clearer treatment of customer information as trade secrets; (Article 5)

Customer information is defined broadly to include not only basic contact details, but also transaction history, purchasing habits, intentions, and records of prior dealings, making it harder for competitors to argue that such information is inherently public.

• Specified confidentiality measures reflecting the modern business model (Article 9)

The Provisions newly include the security measures for scenarios such as remote work and cross-border collaboration, such as hierarchical access control, data anonymization, and operation log recording, in addition to cover measures in the digital world such as prohibiting or restricting the use, access, storage, and copying of computer equipment, network equipment, and storage devices that can access or obtain trade secrets and other measures that are already provided in the relevant laws and judicial interpretations.

• Unauthorized electronic intrusion to digital space is explicitly prohibited (Article 10)

Unauthorized or excessive access to the rights holder's digital office system, servers, email, cloud storage, application accounts, etc., or obtaining trade secrets through malicious programs, vulnerability exploitation, or other technical means are deemed electronic intrusion and are explicitly prohibited.

• Unauthorized downloading or electronic transfer treated as misappropriation; (Article 10)

Misappropriation is expressly stated to include unauthorized downloading or transferring trade secrets to personal email accounts, cloud storage platforms, or external systems outside the rights holder’s control, even before the information is used or disclosed, enabling earlier administrative intervention.

• Targeting employee departure issues (Articles 9, 10, 13, 14 and 15)

The Provisions address employee departure issues that have attracted widespread concern from multiple perspectives.

The Provisions list, as a confidentiality measure, requirements that departing employees register, return, remove, and destroy all trade secrets they have accessed or obtained, as well as any carriers thereof, and continue to be bound by confidentiality obligations after departure. These requirements should be reflected in the company’s internal policies and employee contracts. The Provisions also prohibit inducing others to misappropriate trade secrets through offers of compensation, promotion, or other benefits, and impose liability on parties that knowingly, or should have known, to provide funding, technology, equipment, or other support to misappropriation.

Importantly, the employee’s use of general knowledge, skills, and industry experience accumulated during their previous work does not constitute a violation of trade secrets.

• Explicit recognition of lawful competitive conduct; (Article 15)

The Provisions reaffirm that independent development, lawful reverse engineering of products obtained through public channels, and the abovementioned employee’s use of general knowledge does not constitute trade secret infringement, helping to balance protection with market competition. Article 15 also includes a carveout providing whistle-blower immunity.

• Presumption of infringement in administrative enforcement; (Article 20)

Where an alleged infringer had access to the trade secret and the information used is substantially identical, market regulation authorities may legally presume infringement unless the alleged infringer can prove lawful acquisition or use. This is aligned with the AUCL’s provision on shifting the burden of proof in the same scenario, significantly reducing evidentiary burdens for rights holders in administrative cases.

• Clarifying the injunctive actions of administrative authorities and sanction framework; (Articles 24, 25 and 26)

The Provisions match the available administrative penalties for trade secret infringement with the provisions in the AUCL, namely the market regulation authorities may order cessation of infringement, confiscate illegal gains, and impose fines ranging from RMB 100,000 to RMB 1 million, with fines of up to RMB 5 million in serious cases defined by factors such as substantial losses, major operational impact, repeat offenses, or harm to public interests.

Moreover, the Provisions clarify that any cease‑infringement order issued by an administrative authority remains effective until the relevant information no longer qualifies as a trade secret. Such injunctive measures may include ceasing use of the right holder’s trade secrets, returning or destroying carriers containing the trade secrets, destroying products or intermediates incorporating the trade secrets, and erasing the trade secrets obtained by the infringer. These materially strengthen the deterrent effect of administrative enforcement and reinforces administrative enforcement as a potentially practical and efficient option alongside civil and criminal remedies.

Takeaways

While the Provisions do not alter the substantive trade secret framework under the Anti‑Unfair Competition Law, they materially strengthen and modernize China’s administrative enforcement toolkit and make administrative enforcement a more credible and practical option for rights holders. This marks a meaningful shift from past practice, where administrative enforcement was often viewed as limited in scope and rarely a viable first‑choice remedy. Companies operating in or with China should start to consider if administrative actions can be more effective on trade secrets protection now that the Provisions have become effective on 1 June 2026.

Authored by Stefaan Meuwissen, Grace Guo, and Zhen Feng.