China's new Trade Secret Protection Rules now explicitly cover data and algorithms.
For tech-driven companies, this matters less as "new compliance burden" and more as a long-overdue clarification: your training datasets, model weights, and proprietary algorithms can finally rest on a clearer doctrinal footing under China's Anti-Unfair Competition framework.
But "covered" ≠ "protected." The three classic elements still apply:
- Not generally known to the public
- Commercial value
- Reasonable measures taken by the rights holder
It's element three where most companies fail in litigation. A template NDA distributed to every employee is not a "reasonable measure" — courts look for a system: tiered code repository access, layered confidentiality and non-compete agreements, exit audits with technical handover protocols, controlled disclosure to vendors and partners.
A practical step I recommend to founders:
→ Build a Data & Algorithm Asset Inventory.
→ For each item, decide the right protection path: trade secret, copyright, or patent. The cost, enforcement mechanism, and protection term differ sharply.
There's also a structural tension worth flagging: China's Generative AI rules push for algorithmic transparency and explainability, while trade secret doctrine rewards secrecy. The workable answer is layered disclosure — regulatory submissions get compliance narratives; the public gets functional descriptions; core parameters and training logic stay sealed at the highest tier.
For cross-border teams, layer this on top of PIPL outbound transfer rules and destination-country data laws (GDPR, LGPD, Vietnam's Decree 13/2023, etc.). An algorithm protected as a trade secret in China can lose that status the moment data flows through a poorly designed cross-border pipeline.
If you operate a tech-driven business in or with China and haven't audited your data/algorithm assets recently, this is the moment.
Happy to discuss frameworks — DM or book at wzklaw.com.
#TradeSecrets #AICompliance #CrossBorderLaw #DataProtection #ChinaLaw
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Mike Wu, China-licensed Attorney · Cross-border practice
4 languages (CN/EN/ES/JA)
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