A Comparison of the 1995 Administration Regulations on Prohibiting Trade Secret Infringement and the 2026 Trade Secret Protection Regulations

On February 24, 2026, China’s State Administration for Market Regulation (“SAMR”) issued the Trade Secret Protection Regulations (Order No. 126, the “2026 Regulations”), which will take effect on June 1, 2026. On the same day, SAMR formally repealed the 1995 Regulations on Prohibiting Trade Secret Infringement promulgated by the former State Administration for Industry and Commerce on November 23, 1995.

More than three decades have passed since the 1995 Regulations were issued. At the time, the digital economy was not a mainstream concept, and trade secret disputes largely revolved around tangible carriers and employee mobility. Since the 2000s, however, the rise of the data economy, algorithms as core competitive assets, and increasingly frequent cross-border employee movement have exposed the limitations of the prior regime. While the 2026 Regulations, preserve the basic framework, they comprehensively upgrade the system across trade secret definitions, infringement typologies, defenses, enforcement procedures, and penalties.

This article reviews and analyzes the key clause-level changes between the two administration regulations, with the aim of providing practical reference for rightsholders in building and maintaining robust trade secret protection systems.

1. Evolution of the Definition of “Trade Secret”

(1) Revision of the core definition

Under Article 2 of the 1995 Regulations, a trade secret is defined as:

“Technical information and business information that is unknown to the public, can bring economic benefits to the rightsholder, is practical, and for which the rightsholder has adopted confidentiality measures.”

Article 5 of the 2026 Regulations revises the definition to:

“Technical information, business information, and other commercial information that is unknown to the public, has commercial value, and for which the rightsholder has adopted corresponding confidentiality measures.”

Key differences in structure and elements

1. Value element: “economic benefits and practicality” is replaced by “commercial value” (which includes actual or potential value).
   
2. Subject matter: the protected object expands from “technical and business information” to “technical information, business information, and other commercial information.”
   
3. Confidentiality measures: the 2026 Regulations introduce the notion of “corresponding” confidentiality measures, implying proportionality and contextual adequacy.
   

(2) Practical significance of key changes

1) “Commercial value” replaces the dual elements of “economic benefits” and “practicality”

The 2026 Regulations eliminate the “practicality” requirement and unify the value threshold under “commercial value.” Notably, Article 7 expressly includes interim R&D and even failed experimental data and technical proposals as potentially possessing commercial value.

This change is particularly meaningful for R&D-intensive sectors (e.g., pharmaceuticals, semiconductors, advanced materials). Failed experiments can reflect substantial investment and may provide competitive advantage by eliminating incorrect pathways, yet historically have been difficult to protect due to challenges in proving “practicality” under the older framework.

Practice note: R&D-driven enterprises should strengthen retention and labeling controls over failed experimental data, negative results, and intermediate research outputs. The 2026 Regulations provide clearer legal grounding for protection.

2) Expansion of protected subject matter to “commercial information”

Article 5 clarifies and expands the scope of “technical information” to include algorithms, computer programs, code, and data, the core assets in the digital economy. “Business information” is also broadened to cover creative content, finance, and planning, and the Regulations give more detailed treatment to customer information including transaction habits, intent, and transaction content, addressing long-standing disputes over how far “customer lists” can be protected.

2. Refinement of the “Not Known to the Public” Standard

The 1995 Regulations offered only a brief statement: information is “not known to the public” if it “cannot be directly obtained from public channels,” leaving substantial interpretive uncertainty.

Article 6 of the 2026 Regulations significantly elaborates the standard by listing five categories of information deemed publicly known:

1.    General knowledge or industry practice;

2.    Information directly obtainable by observing products available on the market;

3.    Information disclosed in publications or media;

4.    Information disclosed through public presentations, exhibitions, etc.;

5.    Information obtainable through other public channels.

Important new rule: even where underlying commercial information is publicly known, a new compilation formed through organization, improvement, or processing may still qualify as a trade secret. This is especially important in customer information disputes: even if customer names are publicly identifiable, a systematically organized database containing transaction habits, preferences, intent, and other non-public insights may remain protectable.

Overall, these refinements provide rightsholders with a clearer evidentiary framework and reduce threshold disputes around public availability.

3. Expansion and Structuring of Infringement Conduct

(1) Overall comparison

Article 3 of the 1995 Regulations enumerated four broadly framed categories of infringement: improper acquisition; disclosure/use of improperly acquired information; breach by third parties with business relationships; breach by employees, plus a “knew or should have known” catch-all for third parties.

The 2026 Regulations reorganize infringement conduct across Articles 10–13 and materially expand typologies, particularly for digitalized scenarios.

(2) Digital expansion of “improper means” (Article 10)

The 1995 Regulations listed “theft, bribery, coercion, or other improper means,” without addressing digital conduct. The 2026 Regulations retain the baseline language but expressly add “electronic intrusion” and further specify five scenarios, including:

•    Unauthorized access to, possession of, or copying of carriers containing trade secrets under the rightsholder’s control;

•    Bribery, coercion, deception of employees or former employees;

•    Unauthorized entry into digital systems (servers, email, cloud storage, app accounts) or using malicious programs, vulnerability exploitation, etc.;

•    After authorization expires, unauthorized downloading or transferring to storage spaces or devices beyond the rightsholder’s control;

•    Other improper means.

Practice impact: “self-backup” of company data to a personal cloud drive before resignation is explicitly captured, reducing the need for rightsholders to argue that such conduct falls within “other improper means” and lowering evidentiary burden.

(3) New “instigation, inducement, assistance” infringement (Article 13)

The 1995 framework relied largely on “knew or should have known” to regulate indirect infringement. The 2026 Regulations create a standalone category, including:

•    Instigating or directing others to infringe (explicitly or implicitly);

•    Inducing infringement through material or non-material benefits (e.g., compensation, position promises);

•    Providing funding, technology, equipment, or other facilitation with knowledge (or constructive knowledge) of infringement.

This targets scenarios such as competitors using lucrative hiring packages to indirectly obtain trade secrets—conduct that has historically been difficult to attribute and sanction against “behind-the-scenes” organizers.

(4) Clarifying the scope of “use” (Article 11)

Article 11 clarifies that “use” includes:

•    Direct use;

•    Use after modification or improvement;

•    Adjusting or improving production/business activities based on the trade secret.

This closes a common defense that a party “only referenced” information rather than using it “as-is,” aligning more closely with mainstream international approaches to trade secret protection.

4. Newly Codified Non-Infringement Defenses (Article 15)

The 1995 Regulations did not address defenses. Article 15 of the 2026 Regulations introduces five categories typically not constituting infringement:

1.    Independent discovery or independent development (requires proof of independent R&D process; R&D records are critical);

2.    Reverse engineering (limited to products obtained through lawful public channels; not available where products were obtained through theft or other improper means);

3.    Former employees’ use of general knowledge, skills, and industry experience (boundary disputes between “general skills” and “specific trade secrets” will likely remain a key battleground);

4.    Disclosure for public interest (must be disclosed in accordance with law to state organs or legally authorized institutions; does not include disclosure to media or the public);

5.    Other conduct not constituting infringement (residual flexibility for adjudication).

Practice note: rightsholders should consider written acknowledgments at onboarding and exit regarding the scope and categories of trade secrets to which the employee had access, to help crystallize evidence and narrow disputes.

5. New Evidentiary Requirements for Reporting and Case Acceptance (Articles 17–18)

The 1995 Regulations required only that complainants provide “relevant evidence” of the trade secret and the infringement, without further structure.

The 2026 Regulations build a more complete reporting dossier system, separating required materials into two categories:

(1) Prima facie evidence that the information constitutes a trade secret

Including evidence of:

•    Formation process and time;

•    Non-public nature;

•    Commercial value;

•    Corresponding confidentiality measures;

•    Other supporting evidence.

(2) Specific leads indicating suspected infringement

Including leads that:

•    The alleged infringer had channels/opportunities to access the trade secret;

•    Confidentiality measures were compromised through improper means;

•    The trade secret was actually obtained;

•    The secret has been disclosed/used or there is a risk of such disclosure/use;

•    Other relevant leads.

These requirements echo the burden-shifting logic reflected in Article 20: where the rightsholder shows that the information used by the alleged infringer is substantially identical to the trade secret and that the alleged infringer had conditions enabling access, enforcement authorities may infer infringement and shift the burden to the respondent. This is more favorable to rightsholders than the 1995 framework, but also underscores the importance of disciplined documentation of trade secret scope and boundaries.

6. Clarifying “Serious Circumstances” (Article 26)

The 1995 Regulations did not define “serious circumstances,” leading to inconsistent enforcement standards. Article 26 of the 2026 Regulations enumerates five scenarios, including:

•    Significant direct losses to the rightsholder;

•    Material adverse impact on production/business operations;

•    Harm to national interests or public interests;

•    Repeat offense within two years after an administrative penalty for trade secret infringement;

•    Other serious circumstances.

The “repeat offense within two years” provision is particularly noteworthy: once an infringer has been penalized, subsequent infringement may automatically be treated as serious, triggering materially higher penalties. Rightsholders should track prior penalty records and consider asserting repeat-offense aggravation where applicable.

7. Extraterritorial Infringement (Article 29)

The 1995 Regulations did not address cross-border conduct. Article 29 introduces a long-arm provision:

Where trade secret infringement is committed outside China but disrupts market competition order within China and harms the lawful rights and interests of domestic business operators, it will be handled in accordance with the Anti-Unfair Competition Law and relevant laws.

This provision reflects the rising prevalence of cross-border trade secret disputes and strengthens the legal basis for domestic rightsholders to pursue administrative protection against overseas conduct with domestic competitive effects. For Chinese enterprises with overseas R&D centers or global supply chains, this underscores the need to incorporate trade secret protection into international risk governance.

8. Substantially Enhanced Penalties

(1) Comparison of fines

•    General cases: from RMB 10,000–200,000 (1995) to RMB 100,000–1,000,000 (2026).

•    Serious cases: a new tier of RMB 1,000,000–5,000,000 (previously no separate tier).

•    Measures: addition of confiscation of illegal gains alongside cease-and-desist orders.

(2) Expanded content of “cease infringement” orders (Article 25)

Article 25 itemizes potential measures, including:

•    Ordering cessation of use of the trade secret (unless the rightsholder consents);

•    Ordering return or destruction of carriers containing the trade secret;

•    Ordering destruction of infringing products or intermediates containing the trade secret;

•    Ordering deletion/eradication of acquired trade secrets;

•    Other measures necessary to stop infringement.

Alongside higher fines, enforcement powers are also strengthened (e.g., sealing/seizure, querying bank accounts). Jurisdiction over technical secret cases is elevated to municipal-level or above authorities, which may improve specialization and resource allocation.

9. Conclusions and Practical Recommendations

The 2026 Regulations represent the most systematic and comprehensive upgrade to China’s administrative trade secret protection regime since 1995. Three overarching trends stand out:

1.    Digital adaptation: explicit coverage of electronic intrusion, data transfer, algorithms, and code, aligning law with technological reality.

2.    Evidentiary facilitation: the “substantial identity and access conditions” inference framework, structured reporting requirements, and protection for failed experimental data lower enforcement friction.

3.    Stronger deterrence: significantly higher fines, confiscation of illegal gains, and clearer “serious circumstances” standards raise the cost of infringement.

With the 2026 Regulations taking effect on June 1, 2026, rightsholders should consider prioritizing the following readiness steps:

•    Audit and upgrade confidentiality measures: benchmark against Article 9’s enumerated measures and strengthen controls for remote work and cross-border collaboration.

•    Trade secret documentation governance: systematically record formation processes, timelines, ownership attribution, and boundaries; preserve and label intermediate and failed R&D outputs.

•    Employee lifecycle controls: standardize entry/exit procedures for registration, return/destruction, deletion, and continuing confidentiality obligations.

•    Competitor conduct monitoring: watch for inducement/instigation patterns; preserve evidence early and consider leveraging enhanced investigative powers where appropriate.