German engineering powerhouse Robert Bosch has promptly safeguarded its technical secrets through a remarkable pre-trial injunction granted by a Chinese court. The event highlights the efficacy of Chinese courts in tackling intellectual property disputes and underscores China’s ongoing efforts to foster an equitable legal environment for both domestic and foreign businesses.
German engineering powerhouse Robert Bosch has promptly safeguarded its technical secrets through a remarkable pre-trial injunction granted by a Chinese court. The decisive action bars a former employee from disclosing or using Bosch’s confidential information acquired inappropriately during his employment.The event highlights the efficacy of Chinese courts in tackling intellectual property disputes and underscores China’s ongoing efforts to foster an equitable legal environment for both domestic and foreign businesses.
According to a recently disclosed court decision, Bosch urgently applied to the Suzhou Intermediate Court for a pre-trial injunction on July 23 this year to prevent its former employee, surnamed Li, from revealing, using or allowing others to use the company’s trade secrets; otherwise, it would cause irreparable damage to the company.
While working at Bosch, Li breached the company's confidentiality requirements by sending multiple documents containing its technical secrets to his personal email.
Remarkably, the Suzhou court held a hearing, verified relevant evidence and issued the injunction order within a day of accepting the case.
The court reasoned that Bosch had provided preliminary evidence that it was the owner of the disputed trade secrets, and it had taken measures to keep its technical information confidential.
Li inappropriately obtained the confidential information by intentionally breaching his employer’s management rules, the court noted, adding that there was a high likelihood of such information being disclosed or used by Li or others, justifying the urgent need for a pre-trial injunction.
Eventually, the court granted the pre-trial injunction, determining that the potential harm to Bosch resulting from not granting the injunction outweighed any inconvenience or limitations imposed on the individual.
Chinese courts are extremely cautious when issuing pre-trial injunctions before reaching a final judgment, because the injunctions might severely disrupt the normal business operations of the alleged infringers.
When seeking a pre-trial injunction in China, certain criteria must be met to ensure its approval. First, the urgency of protection is paramount, because failure to act swiftly could result in irreparable harm to the applicants.
In addition, the applicants must establish a solid factual and legal basis, validating their IP assets and demonstrating a high likelihood of infringement, especially in patent cases.
Further, the court must strike a delicate balance between the interests of the litigants, weighing the benefits to the applicants against the potential harm to the alleged infringers.
Lastly, the impact of the injunction on public interest must also be carefully considered in the decision-making process.
In another recent case involving two leading cleaning-appliances suppliers, Dreame and Roborock, China’s Supreme People’s Court offered more clarity on the criteria governing pre-trial injunctions.
With a set of rules effective from Nov. 1, 2023, the highest court’s IP tribunal now has the authority to review injunction decisions made by lower courts.
By overturning a pre-trial injunction issued by the Quanzhou Intermediate Court in June this year, which had prevented Roborock from producing and selling certain robot vacuums allegedly infringing Dreame's patented technologies, the top court clarified the rationale behind granting pre-trial injunctions.
The top court determined that Dreame’s petition for a pre-trial injunction lacked urgency. Although the alleged infringement could possibly escalate during China’s midyear online shopping festival, it has been ongoing since August 2023. Dreame failed to promptly seek an injunction after discovering the infringement at that time.
Moreover, there are substantial disputes between the two companies in terms of the technical features of the contested invention patent owned by Dreame. It’s very likely that the court cannot definitively conclude that Roborock has infringed its competitor’s patent without conducting additional intricate technical comparisons.
When balancing the interests of the two businesses, the top court reasoned that Dreame’s economic losses resulting from the alleged infringement could be remedied through monetary compensation. The infringing products were not relevant to public interests, but a pre-trial injunction could potentially cause unnecessary harm to Roborock.
The Supreme Court reviewing and overturning pre-trial injunctions improperly issued by lower courts will likely encourage them to exercise more caution when granting such restrictive orders.
Although the top court defined the boundary of pre-trial injunctions in the Dreame case, justifying the need for one continues to be challenging.
It would be quite risky for Chinese courts to issue pre-trial injunctions without reaching a final judgment or obtaining decisions from the country’s IP regulatory authority on the validity of the patents in question.
In patent cases, complex technical comparisons are usually required to establish infringement, a process that Chinese courts prioritize to ensure the accuracy and fairness of their determinations of infringement.
By adeptly navigating the complexities inherent in pre-trial injunctions, Chinese courts are not only addressing immediate concerns but also laying the groundwork for long-term protection of IP assets, fostering a robust environment for technological advancement and fair competition.
- Analysis by Xiaoqiong Gao
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