The case involved the surreptitious surveillance of a competitor’s trade secrets. In February 2019, the accused Mr. Liu drove to the rival wind turbine assembling site of Mingyang Smart Energy in Jinghai, Huilai County. He disguised himself as staff member with the provider’s work clothes that he had bought in advance, carrying tools prepared beforehand such as camera and laser rage finder. He entered the wind turbine assembling units, measured and took pictures of the internal structures and related equipment. He shot 617 photos and 15 videos and he was caught while trying to flee. The wind turbine manufacturer had successfully installed their first prototype in 2019, and the total amount of independent research, development costs and licensing fees was 6.17 million RMB. The illegal trespass has caused Mingyang Smart Energy a total damage of 714,476.34 RMB including examination and work expenses. Mr. Liu, as an engineer and the technical team leader of a competitor of Mingyang Smart Energy, acquired trade secrets of the right holder through illicit premeditated means and theft and caused heavy losses. Mr. Liu has therefore infringed trade secrets according to law. On 29, June 2020, Huilai People’s Court sentenced Mr. Liu to 3 years in prison with an additional fine of 1 million RMB during the first trial. This verdict was then confirmed in the second trial.
This case is one of the very few where a trade secret infringer is found guilty under criminal law based on the examination and work expenses caused to the IP owner. It is equivalent to the "remedial cost" introduced in the US-China Phase One Trade Agreement in early 2020 and the new judicial interpretations promulgated by the Chinese Supreme Court in September 2020 as the legal basis for criminal prosecution against trade secret stealers. Hence this case is very meaningful and that's why it was selected as one of the Top 10 Cases of the Year. Strengthening IPR legal protections and severely punishing related crimes are measures critical to encouraging enterprise innovation and sanctioning those who violate the rights of others. The guilty verdict reached by the court has a deterrent effect on IPR related crimes and, therefore, a regulatory effect on the whole sector.