Author: Jiang Xiaoliang, partner, Brighten Law Firm

(CONTINUE)

0.5. Conclusion

An obligee of non-patent technology has neither applied for patent nor registered for copyrighted the technology in his name, so the determination of the obligee's right is in a floating state. The obligee whose non-patent technology has been thrown daylight on, illegally used or pirated needs to demonstrate that he himself is the obligee of the non-patent technology and in line with the following conditions, he is entitled to be protected by law:

(1) The non-patent technology is a technical achievement,

(2) The non-patent technology is provided with certain economic value,

(3) The obligee adopts measures of maintain secrecy.

A technical achievement refers to products, techniques, materials and improvement of these etc. and so forth obtained with scientific and technological knowledge, information and experience. The technical achievement owns the following characteristics:

A. The achievement as the result of intellectual work, put into and used in a certain field, is provided with actual or potential commercial value.

B. The achievement itself is invisible, while its carriers are visible. The achievement can be noted down on paper or recorded in tapes or cassettes etc.; the achievement can be existed in machines and equipment; persons can also be the carriers of a technology achievement.

C. The achievement is not totally known by the public, but persons probably occupy and use it at same time. Because the obligee of the non-patent technology only enjoys the right to transfer and to use the achievement, he maintains control on the technology through secrecy and agreements. He is not entitled to stop others developing the same technology or obtaining and using the technology with goodwill.

D. The achievement is obtained by the holder through legal ways, e.g. self-help development, instead of through illegal ways. It is necessary to determine a technological achievement as well as to distinguish between a job-related technical achievement and a non-job-related technical achievement. The article 326 of Contract Law regulates: A job-related technological achievement refers to a technological achievement accomplished in the process of carrying out the task of the legal person, or other organization, or mainly through using the materials and technological means thereof. the right to use or to transfer a job-related technological achievement shall belong to the entity. The right to use and transfer a non-job-related technological achievement shall belong to the individuals who accomplished it. The main difference between job-related technological achievements and non-job-related technological achievements exists in the following aspects:

A]  the technological achievement obtained in or not in carrying out a task of the unit to which he belongs

B] the technological achievements obtained mainly through or not through using the technological and material means of such a unit .

In the TT(technology transfer) Contract Dispute in which Engineer J and L brings a suit against MMF(Medicament Material Factory),Engineer L pleads as a defendant:

A] As to the technology whose right to use and transfer belongs to the entity, the job-related technology which the employee has taken part in developing becomes non-job-related technology after the employee's one-year retirement.

B] At the same time, the engineer himself had improved the technology when he transferred it. Improved technology is not the original technology, so he possesses ownership of the improved technology, and he has a right to transfer it.

In the writer's opinion, the above two standpoints cannot come into existence. Here follow the reasons:

A] Any development of job-related technology is hosted by or concerned with employees of a entity, but scientific and technological creation is based on inheritance and accumulation of previous technology. The technological achievements obtained in an employee's carrying out responsibilities of a entity include the entity's long-time input of manpower, material resources and intelligence and other employees' collective wisdom and experience. So it is reasonable for the entity to possess the right of the technological achievements.

B] The engineer had made a partial improvement to the transferred technical achievement, but the improved achievement, having not made a substantive breakthrough, includes the original achievement in the technical plan e.g. component directions, techniques and procedure, reaction conditions (temperature, pressure, time, activator, medium etc.), product, effect. According to Equivalence Theory, the act to substitute the substantive technology for others' partial or whole technology with the purpose of realizing the substantive same function and producing the actually same effect is tort.

Generally, the technology not enjoying patent right should be in accord with one of the following situation:

A. having not applied for a patent

B. having not been granted a patent(including the situation of achieving a patent in one country and not in others)

C. being not to be granted a patent according to law

D. the new technological achievement obtained in the process of implementing the patent.

Furthermore, the holder of a technological achievement has to make public the primary technological data and some others in the process of applying for a patent. To effectively protect their technological rights and interests, some holders keep secrets the know-how which is technological data coming down to raising the product's beneficial value, e.g. component directions, technique and procedure, reactionary conditions. So the tort feasor is not capable to reach the economic value that the patentee obtains even he adopts the patentee's published technological data to produce products. The Patent Law and Contract Law have never prohibited adopting measures to protect the non-patent technology in a patent, so the writer believes that know-how shall also be protected by law.

In the Non-technology Transfer Dispute in which WPF (World Pharmacy Factory) brings a suit against Engineer J and L, Engineer J and L plead as defendants: disputed object is a well-known technology and is a patent abroad. They also provide the evidence including patent number of the patent. But they have not provided relevant data on manufacture techniques of the technology. While the transferred technological data MMF as a defendant provides are basically identical with the technological data of WPF, and some transferred data are the copies of the data of MMF. So the T County Court reaches a verdict in the judgement: the plea that the technology has been made public lacks sufficient evidence, so the court will not accept it.

Being confidential means something has never been published in public publication, has never been publicly used inside the country or been entirely known by the public in other ways. On condition that the non-patent technology is not the knowledge that can be publicly obtained, being confidential always belongs to non-patent technology; and being confidential does not mean monopoly, that is, the confidence can be legally mastered by other subjects.

Measures of maintain are include setting up secrecy system, concluding secrecy agreements, adopting secrecy technology, installing secrecy establishment and equipment, etc.

(1). To non-patent technology, adopting necessary secrecy measures is the precondition of getting protected by the law. If no measures of maintain are adopted, non-patent technology will not get protection from law.

To propagandize and popularize their products, the holders of some non-patent technology will make public some technological information of the products. However, the know-how concerned with raising the products' beneficial value, e.g. component directions, techniques and procedures, reactionary conditions, special data will not be opened freely, which will damage the holders' benefits and interests. If the holders open all the data, it is legal for others to use or transfer the non-patent technology.

In the Non-patent Technology Tort Dispute in which WPF vs Engineer J and L and MMF, Engineer J and L plead as defendants that the disputed object is well-known technology, so it is legal to use it. The argument is certainly untenable. Here follows the reasons:

A. Defendants J and L claimed that the disputed technology was their own non-job-related technology when they transferred the technology to MMF. And one characteristic of non-job-related technology is covert. So it is clear that appellants also knew that the disputed technology was nonpublic technology when they put tort in practice.

B. If the disputed technology were public one, when and where did the defendants J and L get the technological data including component directions, manufacture techniques and reactionary conditions (temperature, pressure, time, activator, medium)?

In the Non-patent Technology Tort Dispute, the disputed object is whether the disputed technology is secret or public, that is, whether the manufacture technology of dehydration products is made public. The parties hold very different opinions. The two courts are also different in confirming facts in their judgement. The Shanghai L Section People's Court finds that the disputed object is " a well-known...manufacture technology", "the technology, having been made public in some fields, is not secret and independent ", "having been made public, the technology is not non-patent technological achievement".

The T County Court finds that " the manufacture technology of dehydration products is successfully developed by WPF, and it is practical and unknown by the public...it is non-patent technology with characteristics of law".

In the writer's view, the Shanghai L Section People's Court's determination of public fact is not proper. The determination is based on the summary introduction of the disputed manufacture technology on the pharmacopoeia compiled by the National Pharmacy Administration. But they ignore one important problem, that is, whether other enterprises can produce the same products and same benefits and interests as are produced by WPF on the basis of only the summary introduction? WPF began to develop the disputed non-patent technology in the case---dehydration product in 1970 and passed the technology appraisal in 1971, and then put it into production. During the later decade, WPF has improved the technology in component directions, temperature control, manufacture procedure, technological control, manufacture equipment etc. Thereby, introduction to non-patent technology should not be told from publication of non-patent technology.

The Code of Civil Law of the PRC prescribes the term "Trade Secrets" for the first time. The article 10 of the Against Unfair Competition Law of the PRC defines the term as, "Trade secrets" refer to any technology information or business operation information which is unknown to the public, can bring about economic benefits to the obligee, has practical utility and about which the obligee has adopted secret-keeping measures. The Law of Protecting Trade Secrets (draft) defines the term as "the technique information and business information possessing the following conditions: (1)being unknown by the public in the field of application of the information; (2) being provided with actual or potential commercial value; (3) legal owners adopting reasonable measures on protecting the secrecy.

The disputed non-patent technology in the case is also one kind of trade secrets. T County People's Court determines J and L infringing WPF' s non-patent technology on the basis of the following points:

(1) L was an employee of WPF from 1959 to 1985, and had once been the person in charge of workshop technology, vice-director of the center laboratory etc. before his retirement, and he was senior engineer. J was a technician from 1962 to 1982 in WPF.

(2) J and L both deny having obtained manufacture technology of dehydration product in way of transfer, and they have not provided the technology data on dry dehydration product, e.g. development record, trial-produce report, trial-manufacture process, result, data, and used equipment.

Point (1) proves that J and L once had job convenience to obtain the disputed technology in WPF, point (2) proves that they have not obtained the technology in legal ways. To conclude, they infringe the know-how of WPF.

According to current legislation, jurisdictional interpretation and judicial practice, infringement of others' non-patent technology can be determined from the following aspects:

Non-patent technology is invisible, but its carriers are visible and tangible. The carriers are usually various record, design plan, technology drawing, manufacture flow, audiovisuals, and the technology can also be stored in the brains of technical staff. If a doer can not prove that a non-patent technology is obtained through self-development and self-research, and is protected through secrecy measures; if he can not show development record, trial-produce report, interlocutory process of experiments, site of research and development, used equipment, result of experiment etc.; if the doer says that the development and research of a non-patent technology is a reverse project, but he can not show receipts of research and development products, place of purchase, record of tear-down or decomposition, process of developing component directions, record of failure or success of trial-produce, then the doer is not the developer of the non-patent technology.

Besides obtaining the same or similar technological information as other's through self-development and research, a doer can legally obtain the non-patent technology through the following ways:

A. to obtain or use the obligee's non-patent technology through a contract between the two sides

B. to obtain others' non-patent technology through reverse project on the basis of well-known knowledge, e.g. public publication, publicly used and exhibited products or information.

C. to obtain the non-patent technology in good faith when the obligee is negligent ,

to use it for public benefits or to use it according to administrative order from authorized organs. One viewpoint holds that, to determine one's infringement of others' non-patent technology, it is necessary to find the ways in which the infringer obtains the non-patent technology, that is, to prove that the doer obtains the non-patent technology in illegal ways such as theft, inducement, intimidation. The writer holds different opinions. In most cases of infringement of trade secrets, infringers obtain others' trade secrets in covert ways. And because of secrecy, complexity and faintness of non-patent technology, it is difficult for obligee or judicial organ to get evidence through legal ways and procedure to prove the illegal ways in which infringers obtain the trade secrets. It is even more difficult to prove that infringers obtain the key data, component directions etc. through the way of memory. If the obligees or judiciary organ is blindly asked to show the evidence of infringers' illegal ways, the non-patent technology obligees' benefits and interests can not be effectively protected. And this departs with the general principles of Civil Law and equitable principle of Anti-Unfair Competition Law of the PRC.

Among the non-patent technology dispute cases, infringers seldom copy the non-patent technology completely. They usually change the technology literally or change it on appearance. The following situations are involved in determining infringement of technology with equitable principle:

A. One or two parts of the accused products has been changed place, but the change is not a substantive improvement;

B. Equitable substitute: the substituted parts have the same function and effects although the appearance is different ;

C. Unnecessary technological characteristics of the original non-patent technology are omitted、;

D. Although the infringers have decomposed or united some technological characteristics, his technology still has the purpose and effects of the original technology.

The methods of comparison in equitable principle usually include the Whole Effects Analysis and Individual Elements Analysis. The Whole Effects Analysis emphasizes particularly on the whole effects of triple test including function, manner and result, that is, namely whole effects analysis of the obligees' right range and all the technological characteristics of the accused products. The shortcoming of the Whole Effects Analysis is that it is comparatively easy to make a broad explanation on claim. And Individual Elements Analysis emphasizes particularly on comparison of individual technological elements in the claim, and demands that the technological essence of the accused products should reach or be identical with each limit of the protected right.

To avoid shortcomings of equitable principle, courts usually adopt some additional treaties to apply the equitable principle. And the main additional treaties adopted by the U.S.A. courts in applying the equitable principle include:

A. When the literal evidence on tort is lacked of, the application of equitable principle is an exception instead of a rule.

B. When applying the equitable principle, the judge should not limit the range of protection without considering the claim itself. The application of the principle should be defined in an impartial and proper way, and be embodied in conclusiveness and transparency of determination of a tort.

C. The obligees should make clear the claim and make others understand the range and evidence of the claim. The obligees are not allowed at lawsuit to re-explain the claim with the equitable principle.

In the information age, non-patent technologies are important assets for most of the regularly working enterprises. To maintain advantages in fair-competition market, many companies have put a lot of manpower, material resources and financial resources into developing the technologies. However, these non-patent technologies as trade secrets face the possibilities of drain. What's more, some employees of enterprises will become the competition adversary of the enterprises after they leave the enterprises, and make the benefits and interests of the their former entities go down. A lot of non-patent technologies of the state enterprises flow outside, which is one of the reasons of decrease of the benefits and interests of the state enterprise. As to WPF in the above case, the non-patent pharmacy techniques developed and researched by it are illegally transferred by some of its former employees. So it is very important for obligees to know how to protect their non-patent technology.

All the persons that illegally betray, obtain, utilize and damage others' non-patent technology should be punished by law . The obligees can quote the Contract Law, Tort law, Anti-unfair Competition Law and Criminal Law etc.

A. Protection from Contract Law

An obligee can make the employees to keep secrets of the non-patent technology developed by the unit through signing secrecy agreements or stipulating secrecy articles with the employees. And the obligee can also sign agreements on trade contest limitation with the relevant employees.

Trade contest limitation is to prohibit the employees from practicing trade contest with the unit in their terms of office and the certain period after their leaving the unit. The Constitute and the Labor Law regulate that labors enjoy the right to work and to selecting a job freely, so the trade contest limitation can be put into practice only through the contest subjects making unconstrained promise or recognizing and defaulting the regulations of the unit or reasonable agreements reached by the unit and employees. The contest subjects are the employees that contact or possibly contact with the unit's non-patent technology because of duty.

B. Protection from the Civil Law

All the behaviors that infringe others' right because of mistakes, intensive or illegal behaviors and lead others' to come to harm constitute torts. The infringers should bear responsibilities of compensation. Infringement of others' exclusive right and right of transfer of the non-patent technologies constitutes torts, and obligees can claim on right against the infringers because of being infringed. According to the regulations of civil liability for infringement of rights in the General Principles of the Civil Law, the obligees can protect their non-patent technology by quoting infringement principle, and obligees will not be constrained by contract relationship. Thus the regulations redeem the defects of contract law. But as the writer has discussed in the text, it is difficult for the obligees to prove they owning the non-patent technology as well as the infringers illegally infringing their right when they claim on right.

C. Protection from Anti-Unfair Competition Law

The Anti-Unfair Competition Law of the PRC brings forward first the sound protection measures on trade secrets, e.g. regulates administrative punishment. The governmental body of industry and commerce administration first of all shall order the infringers to stop the illegal activities, and order the infringers to suspend business for internal rectification, and revoke the business license etc. And the supervisors may fine an amount from more than ￥10, 000 to less than ￥200,000 in according to the facts.

D. Protection from the Criminal Law

Doers acquire a rightful holder's commercial secrets via theft, lure by promise of gain, threat, or other improper means; or disclose, use, or allow others to use a rightful holder's commercial secrets which are acquired through the aforementioned means, if he causes particularly serious consequences to the obligee may be given criminal sanction. Article 219 and article 220 of the Criminal Law regulate: Whoever engages activities which encroaches upon commercial secrets and brings significant losses to persons having the rights to the commercial secrets is to be sentenced to not more than three years of fixed-term imprisonment, criminal detention, and may in addition or exclusively be sentenced to a fine; or is to be sentenced to not less than three years and not more than seven years of fixed-term imprisonment and a fine,

When a entity commits the above crimes, it is to be sentenced to a fine; its directly responsible person in charge and other personnel of direct responsibility should be punished in accordance with the stipulations respectively stated in these Articles of this section.

The relevant intellectual protection laws of the PRC make only fundamental provisions on infringers' liabilities, and the scope of compensation and the method to calculate the compensation fee are not specifically regulated in the laws. Thus difficulty comes into existence in determining and bearing the responsibilities of infringement compensation. The T County Court decides that responsibility L and J bear is the money they have acquired from MMF through the illegal non-patent technology transfer.

1. Actual damages, lawful damages and contracual damages

According to methods of calculating damages, damages can be classified into three kinds: actual damages, lawful damages and contractual damages. Actual damages are to determine the infringement damages on the basis of the obligees' actual economic loss or the found profit acquired by the infringers through infringement. Lawful damages is to determine the damages just on the basis of the regulations of the laws when it is difficult to determine correctly the obligees' actual economic loss and the infringers' illegal income and there is no other way to determine the infringers' damages. Contractual damages are the damages stipulated in the contracts signed the two parties, and the contracts stipulate not only both parties' secrecy obligation but also the damages that one party will bear when the party violates the secrecy obligation.

According to the jurisdiction interpretation actual compensation from the Supreme People's Court, three methods are usually adopted in assessing infringement damages of intellectual property:

(1) assessing the damages in accordance with the plaintiffs' actual loss from the infringement, namely, the lessened profit because of the lessened sales, (2) assessing the damages in accordance with the actual profit acquired by the defendants, namely, the profit acquired through selling the infringing products.

(3) assessing the damages in accordance with the plaintiffs' acquired royalty for which they permit others to apply the intellectual property.

Some deficiencies exist in the three methods:

First of all, the first method can not be applied in the following circumstances: the obligee have increased the profit instead of suffering the economic loss during the period of infringement; or the obligees' product sales have not lessened.

And at the same time, the infringers can plead, the loss of the obligees' profit is because of the decrease of the obligees' product quality, the improper marketing strategies adopted by the obligees and the hot marketing competition etc. Thus few persons ask for a complete investigation of the damage in the case of intellectual property infringement.

Second, the second method can not be applied in the following circumstances: rather than acquiring profit, the infringers are to the bad during the period of infringement (the plaintiff MMF in this case is to the bad in producing the infringing product because of marketing factors). In fact, some infringers evade from punishment with various profit transfer methods.

Third, the third method cannot be effectively applied in the following circumstances: the infringers can take no or small amount of royalty. In the Technology Transfer Dispute in which Engineer J and L bring a suit against MMF, the cognizance of the technology transfer fee is very different between the two parties. The plaintiff says the fee the defendant had paid is ￥120,000, while the defendant says he has paid ￥220,500. In the first case, the Shanghai L Section People's Court find that ￥100,500 among ￥220,500 is consultative fee instead of technology transfer fee. And in the second case the T County Court finds that ￥220,500 is all technology transfer fee, which J and L shall return it to the obligee WPF.

The writer agrees with the suggestion from the academic circles that the legislature regulate lawful damages through legislation, and the purpose is to supplement the deficiency of actual damages and to check the intellectual property infringement. In fact, regulating lawful damages in the law is also necessary for protection of non-patent technology. Here follows the reasons:

A. Non-patent technology is invisible, so it is difficult to calculate the correct loss from the infringement, which makes the obligees unable to get the impartial and reasonable damages and violates the equitable principle.

B. Regulating articles of lawful damages is in favor of obligees' protecting their non-patent technology, obtaining timely and effectively the damages and decreasing the cost of their title.

Nowadays, devices of intellectual property infringement are more and more covert, and the same are the devices of non-patent technology. Infringers report only a part of or conceal the amount of infringement profit, so more and more infringement plots of cases cannot be made clear. It is necessary to establish the system of lawful damages. The Shanghai Court formulates caselaw of lawful damages in practice: when the obligees' pecuniary loss or the infringers' illegal profit cannot be correctly determined, the damages can be determined within a certain scope in accordance with the circumstances: damages of ordinary infringement is ￥10,000--300,000; the highest damages of serious infringement can reach ￥500,000; damages is twice or three times of the ordinary royalty. The judge of the trial bench can finally judge the damages in accordance with the various factors, e.g. whether the damage that the obligees have suffered is serious or not, the social influence of the infringers' behavior and the subjective fault.

Some scholars hold different opinions on contractual damages. They do not think the contractual damages can be the damages of infringement. Here follows the reasons:

A. The contractual damages come into existence because of breach of contract, while liabilities of infringement is based on the right of use and transfer of the non-patent technology. So liabilities of infringement cannot be substituted by the liabilities of breach of contract.

B. The contractual damages are more than the actual loss of the obligees, so it is unfair to determine the damage of the obligees in accordance with the contractual damages.

C. The convention possesses the characteristics of penalty, while according to law of administrative punishment, the obligees of non-patent technology have no right to make such a convention with characteristics of penalty.

The writer does not agree with the above opinions. The articles of the contractual damages mainly exist in secrecy agreements and agreements on trade contest limitations signed between the enterprises of non-patent technology and the employees. In these agreements usually exist articles that regulate the enterprises pay the employees secrecy bounty or damages of limitations of trade contest. Although the amount of the contractual damages is dozens times larger than that of the bounty or the damages, the contractual damages is still in fairness considering that the enterprises sign the agreements with many employees. In fact, the actual loss of the obligees is usually bigger than the contractual damages, for because of publication or partial publication of the non-patent technology the loss caused by infringement of non-patent technology will not end with the verdict of the courts. And the litigated damages do not possess the characteristics of penalties, and it belongs to breach contract damages without violating the administrative punishment. According to principle of law, infringers violating the obligation of secrecy stipulated in the agreements shall bear both the liabilities of breach and those of infringement; the obligees have a right to claim the infringers' liabilities of breach (if the obligees file a lawsuit against the infringers over infringement, then the compensation usually goes in accordance with liabilities of infringement) .

2] Compensatory damages and punitive damages

According to the purpose of compensation of infringement, the damages can be classified into two kinds, compensatory damages and punitive damages. Compensatory damages is the liabilities that the infringers bear just to redeem the loss of the obligees and thus to recover the lost profits of the obligees. The subjective mistakes and plots of the infringement of the infringers are ignored in the compensatory damages. On the contrary, punitive damages are applicable to intentional tort, and the infringers shall pay damages several times larger than the actual loss instead of only the damages of the loss. There is no express provision on punitive damages in the law and the jurisdiction interpretation.

Some scholars hold critical opinions on punitive damages. First of all, civil liability comes into existence because of happen of infringement as the absolute important element of the act of tort, so the civil liabilities shall not be aggravated for the intentional characteristics. Second, the phenomenon "in nine cases of ten, the damages the obligees acquired are not as much as they should be" is subjected to the problem of execution of law, and it cannot be classified into problems of compensatory damages. Third, the principle of evidential burden inversion is not practiced in the proceeding, which make the compensatory damages not to be put into practice. Finally, the punitive damages is not in accordance with the equitable principle, which will possibly make the obligees abuse the right and lead to new unfair.

The writer cannot agree with the above opinion. The persons holding this opinion ignore the invisibility of non-patent technologies and particularity of their carriers. Because of these characteristics, it is difficult for an obligee to closely control his technology, and it is relatively easy for infringers to practice infringement and obtain much money. Non-patent technology can be used at different time and in different places by different doers, so the obligee cannot check and verify all the infringements. In the Non-patent Technology Transfer Dispute, the infringers have illegally transferred the non-patent technology to many enterprises, but the obligee verifies only one of them. And at the same time, there are other employees of WPF who have illegally transferred other pharmaceutical techniques of the factory to the third party, but these infringers still obtain illegal income because their infringement cannot be verified.

However, the critical opinion on the punitive damages is somewhat deliberate. Here follow the reasons:

First, the damage caused by the infringement of non-patent technology is not acquirable, and it is difficult to verify the loss caused by the past infringement and to correctly calculate the future loss of the obligees caused by the publication of the non-patent technology.

Second, it is because of the limitation of the compensatory damages that leads to the phenomenon " in nine cases of ten, the damages the obligees acquired are not as much as they should be".

Third, if the principle of evidential burden inversion is practised in the proceeding and the defendants do not induce evidence, the judges can correctly apply compensatory damages or not?

The third party has unwittingly acquired or used the non-patent technology without permitted by the non-patent obligee, which is generally determined tort in good faith. In the writer's opinion, settling the tort in good faith of the third party can be taken into account from the following angles:

(1) The characteristic of being in good faith can be used by the tortfeasors to resist paying damages claimed by the obligees, but it cannot be used as a reason by the defendants to resist stopping the illegal use of the non-patent technology.

(2) After an obligee find the third party's infringement, he can inform the infringer to stop tort in advance. The behavior of the tortfeasor continuing to use the non-patent technology after the information is not subjected to tort in good faith.

(3) After the illegal non-patent technology transfer contract is invalidated, the assignee in the contract can continue to use the technology on condition that he pays the obligee reasonable royalty.

(4) Do obligees have right to ask the third party in good faith to stop using the non-patent technology? In the writer's opinion, according to fairness and good faith doctrine, comprehensive factors, e.g. degrees of reliance of the obligee or third party on the non-patent technology, social interests, community interests and interests of the employees of the two enterprises, should be taken into account. Then whether the third party in good faith can continue to use the technology or not can be determined.

(5) If the third party in good faith develops a new non-patent technology after he acquires the original non-patent technology and does researches on it, namely, technology accumulation, the courts or arbitral agencies shall not determine the third party in good faith to stop using the technology. The third party shall be permitted to continue using the technology on condition of paying the original obligee royalty.

The author think, judicial power could accept another method for protecting trade secrets: the inevitable disclosure doctrine. The theory of the inevitable disclosure doctrine is the courts do not need to wait for trade secrets to be stolen before issuing relief; courts can take action to stop misappropriation before it happens. In case appears inevitable that an ex-employee who joins a competitor will use or disclose his former employer's trade secrets, the court may step in and enjoin the ex-employee in order to protect the trade secrets. For example, in tech tort case, the court could rule infringer stop his tort, consequently infringer would avoid further losing such as buying special equipment, materials, expenditure for employing, and so on. The inevitable disclosure doctrine came to life following a 1995 lawsuit in Chicago between Quaker and Pepsico and has resulted in confirmation of litigation. And the Uniform Trade Secrets Act adopted by most states in the US specifically allows courts to enjoin " threatened misappropriation " of trade secrets.The inevitable disclosure doctrine does not offer relief merely because an ex-employee joins a competitor. It does not stand for the proposition, and should not be used to advocate, that an ex-employee can be prevented from joining a competitor simply because the employee will be working in a similar capacity for his new employer. Courts that have accept the doctrine required more:。Emergency. Some Know-how, particularly strategic plans, are extremely time sensitive. The longer an employer sits on its rights, the harder it may be to persuade a court that the employer needs injunctive relief to protect its trade secrets..Lack of forthrightness by ex-employee. Emphasizing the importance of this lack of forthrightness, such as absent some showing of bad faith, underhanded dealing, or employment by an entity so plainly lacking comparable tech that misrepresentations can be inferred.

Trade secrets must be identified with particularity.Courts have refused to protect general information or to grant relief to a plaintiff who is unwilling or unable to come forward with the precise nature of its trade secrets.

High level employeeInevitable disclosure is arguably most apt when the exiting ex-employee is a senior executive and there is s close connection with relate non-patent tech.Competitor displays an unnatural interest in trade secrets.

If a competitor's hiring patterns suggest that it is attempting to gain access to trade secrets rather than merely pursuing qualified individuals, a court has another persuasive reason to apply inevitable disclosure.

Nowadays, non-patent technologies in the PRC increase in number and improve in qualities, and some non-patent technology has become the core assets of the enterprises and the important base of enterprises' competition, survival and development in the market. At the same time, infringement on non-patent technologies become more and more serious with the following characteristics:

A. Varieties of the tortious subjects including secrecy obligors inside enterprises, business adversaries, all kinds of information agencies and individuals;

B. Skilful tortous manners, many spy ploys are adopted;

C. Cases of tort become more and more;

D. Consequences of tort are serious, some enterprises are close to bankruptcy because of others' infringement on their non-patent technology. And the judicial branches' settlements of tort are not forceful enough to make some tortfeasors stop their tort. E. The obligees of non-patent technologies have not adopt enough measures to protect their technologies, and some managers of enterprises have never even heard about secrecy agreement or agreement on trade contest limitation..Whereas it is necessary for the state to provide definite and sufficient legal protection on non-patent technologies. In June of 1994, the PRC drafted a law on protection of trade secrets, and non-patent technology was protected as trade secrets by the law. In the writer's opinion, it is necessary for the state to quicken her pace of formulating the law on protection of trade secrets, and the law shall definitely regulate the scope of protection of non-patent technology, the determination of holdership, tort and liabilities of tort. And the state shall also coordinate the Anti-Unfair Competition Law, the Civil Law, the Civil Procedure Law, the Contract Law, the Labor Law, the Patent Law, relevant regulations of the Law on Guarding National Secrets and the Law on Protection of Trade Secrets. Thus a effective legal system of protecting non-patent technologies comes into existence to protect right of obligees of non-patent technologies and advance the progress and development of science and technology.