Trade Secrets and Confidential Information

Case Overview

Beijing Mining and Metallurgy Company （BJ Mining） entered into a "Technical Service Contract" with Chenzhou Environmental Protection Company (Chenzhou), which included confidentiality obligations regarding BJ Mining technical secrets and a clause stipulating a penalty of 1 million yuan upon Chenzhou for each breach of confidentiality. Chenzhou later sought a patent incorporating BJ Mining confidential technology, prompting BJ Mining to assert a breach of contract. 

Dispute Focus

1. Whether the confidentiality obligations persist after the contract ends; 

2. Whether the patent significantly utilizes confidential technology; 

3. The applicability of the penalty clause and the burden of proof. The main conflict revolves around the legal relationship between trade secret protection and breach of contract liability.

Hightlights

The key points and strategies of the case emphasize the important connection between the protection of trade secrets and the liability associated with breach of contract.

We strictly adhered to the confidentiality in the "Technical Service Contract" and built a comprehensive chain of evidence around technology transfer—patent overlap—breach of confidentiality.

1. Our strategy began by establishing the facts of technology transfer from BJ Mining to Chenzhou through notarized documents, and email correspondence, demonstrating that Chenzhou had received and utilized BJ Mining's technology. 

2. Subsequently, we conducted a thorough technical analysis, comparing the disputed patent filed by Chenzhou with the process flow, parameter indicators, and implementation example data from BJ Mining technology report. This analysis highlighted notable similarities in critical aspects, including arsenic removal through acid leaching and rapid cooling, which effectively undermined Chenzhou's assertion of independent research and development.

3. We highlighted Article 98 of the Contract Law, which stipulates that confidentiality obligations continue to be enforceable even after the termination of a contract. This ensures that parties remain liable for any breaches. 

Additionally, we pointed out the specific clause that mandates a compensation of 1 million yuan for each breach, which streamlined the process of proving damages and ultimately resulted in a compensation award of 1 million yuan.