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What is a "trade secret", and what are the requirements for entrusting trade secrets in Chinese law and/or regulations?
(02/20/2008)

A "trade secret" refers to an organization¡¯s technical or business operation information not divulged to or known by the public, and allows the production of economic benefits by a workplace organization (i.e. an organization employing others) and practicality; these trade secrets fall within certain protective measures made by workplace organizations.

According to the requirements of the Regulations of the Shanghai Municipality on Labor Contracts, both parties in a labor contract may, in a labor contract or non-disclosure agreement, agree on extending the period of notification in advance to revoke a labor contract requested by an employee who is liable for keeping the trade secrets of the workplace organization confidential, however, the extended period shall not exceed six months.

During the stated period of notification in advance, the workplace organization may carry out measures to ensure the employee¡¯s separation from the organization¡¯s trade secrets.

The contents stipulated in the clause of the confidentiality and/or non-disclosure agreement shall become void upon the moment where such trade secrets become known by the public.