Data has become a critical asset following the rapid growth of the digital economy. In response, China has developed a legal framework to protect data intellectual property (IP) regarding copyright, trade secrets, personal information privacy, and cybersecurity laws. In December 2024, the China National Intellectual Property Administration (CNIPA) designated 19 regions, including Beijing, Shanghai, Shenzhen, and Zhejiang, as pilot service centers for data intellectual property protection. These service centers actively establish registration practices. This paper introduces China's legal measures for data IP protection, outlining the roles of various laws and exploring recent cases on data management for IP protection.

With the surge in digital transformation and artificial intelligence, data has become a crucial resource and brings significant commercial value. This article will introduce how China established regulations to protect data-related rights. Unlike traditional IP assets like patents or trademarks, data protection requires a combination of legal instruments to cover various aspects, including personal privacy and trade secrets. This paper explores how China protects data IP through a hybrid legal approach, encompassing copyright law, anti-unfair competition law, personal information protection, data security, and contract law.

Laws for Data Intellectual Property Protection in China

1. Copyright Law

China's copyright law protects compilation works when a database demonstrates creative originality in its selection and organization. However, this form of protection is limited to the database's structure and arrangement, not the data itself. Although the scope of protection is somewhat narrow, this measure benefits data owners by ensuring their organizational work is legally safeguarded.

2. Anti-Unfair Competition Law and Trade Secrets

China's Anti-Unfair Competition Law protects sensitive business data, such as client databases, technical insights, and market research. For data to qualify as a trade secret, it must hold commercial value, remain confidential, and be protected by the company through reasonable security measures. This framework is a powerful tool for companies to prevent unauthorized access or misuse of sensitive data.

3. Personal Information Protection Law

China has established comprehensive regulations for personal data management. These regulations cover all aspects of personal data processing, including collection, storage, and sharing. The law protects individual privacy and indirectly secures corporate user data, emphasizing lawful, justified, and necessary data use.

4. Data Security Law

Enacted in 2021, the Data Security Law addresses data management, usage, and safeguarding especially critical and core national and public security data. This law categorizes data, implements security obligations, and mandates protection measures, reflecting China's robust approach to data governance in both public and private sectors.

5. Contract law in Data Transactions

Contract law in China allows companies to define and contractually control data usage parameters. Through data-sharing agreements, companies can specify usage limits, protective measures, and restrictions on resale or unauthorized distribution, providing a tailored mechanism for managing data rights and responsibilities.

6. Patent Law for Data-Related Innovations

Although data itself is not patentable, innovations in data processing methods or algorithms can qualify for patent protection if they meet the criteria of inventiveness and utility. This strategy enables companies to safeguard the proprietary techniques they use to process and analyze data, offering an indirect yet crucial layer of IP protection.

7. Cybersecurity Law

The Cybersecurity Law targets the security management of critical information infrastructure, ensuring that susceptible data is stored and managed securely. It enforces data localization requirements and regulates cross-border data transfers, setting high standards for data security and indirectly strengthening data IP protection.

Recent Case Studies:

The rapid evolution of data-related technologies has led to increasing instances of data IP litigation in China. Several landmark cases underscore the application of China's data IP laws in 2024: 

Case 1: First case about the validity of a data intellectual property registration certificate

Case Number: (2024) Jing 73 Min Zhong No. 546

Jurisdiction: Beijing Intellectual Property Court

Case brief:

This case, the first in China to address the validity of a data intellectual property registration certificate, clarified that data in the public domain does not qualify as a trade secret but can still be protected under the Anti-Unfair Competition Law. The data IP registration certificate obtained for the disputed dataset serves as preliminary evidence of the plaintiff’s proprietary interests in the dataset and proof of the legality of the data collection or its source. Without contradictory evidence, these facts can be established based on the certificate.

Rulings:

Despite being publicly available and lacking originality in content selection and arrangement (thus failing to qualify as a work under copyright), the plaintiff created the disputed dataset through significant technical, financial, and labor investment. This effort added commercial value to the original voice data, meeting the needs of AI model developers. As a result, it provides commercial benefits to the plaintiff by attracting traffic and creating business opportunities and competitive advantages. These competitive benefits are legally protected interests under the Anti-Unfair Competition Law.

If a dataset is publicly accessible and has originality in selection and arrangement, it may be protected as a compilation work. If it is not easily accessible to professionals in the relevant field, it may be protected as a trade secret. Publicly accessible datasets without originality may be protected under Article 2 of the Anti-Unfair Competition Law due to a lack of specific intellectual property rights or trade secret protection.

Case 2: First unfair competition case about big data "moving" software

Case Number: (2021) Yue 0192 Min Chu No. 1692 / (2023) Yue 73 Min Zhong No. 995

Judgment Date: 2021 (First Trial), 2023 (Appeal)

Jurisdiction: Guangdong Province People's Court

Case Brief:

This is the first case in China that involved unfair competition related to product data on e-commerce platforms. The court recognized the e-commerce platform's rights to its product data based on the legality of data generation, investment in data operations, and competitive interests. The court found that the defendant's actions disrupted the competitive order and harmed the legitimate interests of other operators and consumers; the court determined that the defendant's conduct constituted unfair competition under Article 2 of the Anti-Unfair Competition Law.

Rulings:

This ruling acknowledged the ownership rights of open data and defined unfair data utilization practices. By regulating the improper use of big data, the case contributes to improving data governance rules and supports the positive development of the data industry through judicial empowerment.

Before obtaining permission from the data owner, no one may publicly distribute data collections legally compiled through substantial investment by the owner. When data collection is made open-source by the owner, whether the data user complies with the open-source license terms is critical in determining if their actions align with business ethics in the data services industry.

Conclusion:

China's data IP protection framework is extensive and multi-faceted, employing a mix of traditional IP laws and innovative legislative measures. The country's approach to data protection reflects a keen awareness of its value as an economic asset and its complexities. As the digital economy expands, China is expected to refine its data IP regulations further, balancing the need for data innovation with stringent protections. Future advancements in legislation and enforcement are likely to reinforce China's role as a pioneer in data IP protection, setting a global standard in the digital age.