How do courts adjudicate corporate trade secret leakage disputes?

Disputes involving trade secret leakage between companies—arising from cooperation, investment, or mergers and acquisitions—have markedly increased in recent years. According to the Supreme People’s Court’s 2026 Work Report, civil cases concerning trade secret infringement and bid-rigging (as forms of unfair competition) rose by 10.6% in 2025 compared with the previous year; from 2021 to 2025, courts nationwide concluded over 2.5 million first-instance intellectual property cases—a 64.44% increase over the prior five-year period. This growth stems from three main factors: First, heightened corporate activity in outbound investment, M&A, and technological collaboration has greatly expanded both the application scenarios and volume of confidentiality agreements. Second, judicial protection for trade secrets has been continuously strengthened—for instance, through punitive damages, injunctions (behavioral preservation), and evidence preservation—lowering rights-holders’ litigation thresholds and raising their expectations of successful enforcement. Third, the Regulations on Trade Secret Protection, effective in 2026, establish a presumption-of-infringement rule based on “access plus substantial similarity,” further easing plaintiffs’ evidentiary burden and expected to spur more inter-corporate leakage disputes entering litigation. I. Based on reviewed case law, here are the key contested issues and judicial adjudication principles: 1. Defining the scope of confidential information: All three statutory elements must be satisfied. Courts apply a strict standard in determining whether claimed information qualifies as a trade secret. The rights-holder must prove that the information simultaneously satisfies three criteria: secrecy (not generally known or readily ascertainable), commercial value (capable of bringing economic benefit), and confidentiality (reasonable protective measures adopted by the rights-holder). Broad, generic clauses in confidentiality agreements alone are insufficient to confer trade secret protection. For example, in Case No. (2017) Hu Min Zhong No. 169, the court held that the etching equipment technical secrets at issue met all three criteria—secrecy, commercial value, and confidentiality (e.g., via confidentiality agreements)—and thus warranted protection. In other cases, courts emphasized that customer information qualifying as a trade secret must go beyond publicly available data (e.g., company name or contact details) and include “deep” information such as contacts’ names and roles, product preferences, pricing, order volumes, and transaction patterns. Merely listing customer names or phone numbers is inadequate. 2. Establishing breach of confidentiality obligations: Burden of proof rests with the rights-holder. The party alleging breach must prove: (i) that the information at issue constitutes a trade secret; (ii) that the defendant disclosed, used, or permitted others to use it; and (iii) that such conduct caused quantifiable loss. Failure to meet this burden results in adverse consequences. For instance, in Case No. (2023) Yue Min Shen No. 14338, the breach itself had already been established (the respondent accepted a RMB 1-million fine), so the dispute centered solely on quantifying losses—not on whether breach occurred. In other cases, judges ruled that if the rights-holder cannot demonstrate (a) exclusive access to the information by the defendant, (b) that the information falls within the scope of trade secrets defined in the confidentiality agreement, and (c) that the leakage occurred after the agreement took effect, the claim will likely fail. 3. Liquidated damages and compensation for losses: Courts routinely adjust them based on actual losses.

An eight-year-old case resurfaces: Former Asahi Kasei employee leaks semiconductor packaging material secrets.

Asahi Kasei discloses major trade secret leak involving core semiconductor packaging materials: Former Manufacturing Technology Department Head Mr. Shoichi Furukawa was arrested for leaking technical information about Novacure’s potential curing agent to Shandong Saint泉 New Materials Co., Ltd. According to Asahi Kasei’s Japanese-language announcement dated September 17, 2026, Mr. Furukawa was arrested by Aichi Prefectural Police in Japan. Japanese investigative authorities allege he disclosed technical information related to the ‘Novacure’ potential curing agent to Shandong Saint泉 New Materials Co., Ltd.—a subsidiary of China’s Shengquan Group. This material is a core component in semiconductor packaging, characterized by high technical barriers and acute commercial sensitivity; its exposure immediately triggered widespread attention across Japan’s materials and semiconductor industries. The case spans nearly eight years: Mr. Furukawa secretly removed an external hard drive containing classified data upon his departure from Asahi Kasei in 2018, and only in 2024 did he email Novacure curing agent process data to Shandong Saint泉 New Materials. Crucially, this incident was not uncovered through Asahi Kasei’s internal audit but rather surfaced when Mr. Furukawa’s subsequent employer filed a report—unearthing this long-dormant trade secret leak. In its announcement, Asahi Kasei stated it is fully cooperating with police investigations and conducting a comprehensive review of its internal management and information security protocols. During his tenure, Mr. Furukawa held long-term responsibility for manufacturing technology and thus had authorized access to critical R&D and process documentation related to Novacure. While police have not yet disclosed full case details, the incident has been officially classified as a major enterprise trade secret leakage case. The Novacure potential curing agent is widely used in high-end semiconductor packaging applications, where stringent requirements govern material performance, stability, and compatibility with fabrication processes.

Asahi Kasei to sue Chinese firm over information leak; former employee arrested

2 hours ago

Asahi Kasei plans to sue Shandong Shengquan over leaked confidential information regarding its latent curing agent after a former employee was arrested. The company is implementing additional security measures while cooperating with the ongoing police investigation.

chemweek

2026-02-03

Asahi Kasei Strengthens Co-Creation Measures to Meet Local Needs

2026-04-20

Asahi Kasei Delays Canada Battery Materials Startup on EV Slowdown

2026-05-12

Asahi Kasei to Discontinue SM, PE Production by FY2030 Amid Oversupply

2026-05-29

APIC '26: Asahi Kasei May Seek Partner/Buyer for South Korea ACN Operations

2026-08-26

Asahi Kasei and Takasago Sign Acetolyte Electrolyte Technology Licensing Agreement