To demonstrate Chinese courts’ progress in protecting intellectual property rights, the Supreme People’s Court of China announced its “Top 10 Intellectual Property Rights Cases of 2013” on April 21. The case of SI Group, Inc. & SI (Shanghai) Co., Ltd. versus Sino Legend (China) Chemical Co. Ltd. & Xu Jie, whose defendants were represented by AllBright partners David Chen and Chen Bo, was among the model cases. This is David Chen’s third case to have been listed among the annual “Top 10 Intellectual Property Rights Cases”. The previous two cases are French Pavilion at Shanghai World Expo versus Wang Qun, 2010, and eLand (Shanghai) Fashion Trade Co., Ltd. versus Zhejiang Taobao Network Ltd, 2011.

SI Group, Inc. and SI (Shanghai) Co., Ltd. jointly claimed that the know-how regarding a thermoplastic resin product is SI Group’s trade secret and that SI (Shanghai) is the exclusive licensee in China. The claimants alleged that Xu Jie had the access to this trade secret when Xu was employed with the company. After Xu quit his job from the claimants, he joined Sino Legend (China) Chemical Co. Ltd and gave the trade secret to Sino Legend so it could develop a similar product and filed a patent application. The claimants petitioned the court for a permanent injunction against the defendants in the case and sought damages of 2 million RMB. The Shanghai No. 2 Intermediate People's Court found that the professional technology analysis of the two products showed that they were different products and therefore rejected the claimants’ claims, which the court found to be groundless and not supported by the facts. The claimants appealed to the higher court, which reaffirmed the ruling.

This case shows that court rulings should protect not only the claimant’s trade secrets, but should also balance both parties’ interests, and fair competition and order of the market economy. The claimants had resorted to applying for an additional defendant, withdrawing the case and failing to appear at court to delay and prolong the case. The defendants’ lawyers objected to these maneuvers and the court finally rendered a judgment by default, based on the principle of good faith, to end the defendants’ status of being suspected of intellectual property theft. This case is also a classic commercial trade secrets case which was tried in both China and US courts. It not only protected the legal interests of the defendants, but also showed the world that China is serious in protecting intellectual property.