In today's fiercely competitive business environment, a client list is undoubtedly one of the core assets of a company. However, it is not uncommon for employees to take client lists with them when they switch jobs, posing a severe challenge to the protection of trade secrets. As a market research company, we are well aware of the importance of client information. Today, let's discuss how to protect corporate trade secrets and avoid losses caused by employee turnover.
Case Alerts: Trade Secret Infringement Caused by Employee Turnover
Case 1: Trade Secret Dispute Caused by Hou Mouyu's Job Change
Hou Mouyu once worked as a patent agent assistant at Hangzhou Hangcheng Patent Agency Co., Ltd. (hereinafter referred to as Hangcheng Patent Agency), and both parties signed an "Intellectual Property Protection and Confidentiality Agreement." In April 2016, after leaving the company, Hou Mouyu used the client information obtained during his employment at Hangcheng Patent Agency to co-found Jiaxing Yonghang Patent Agency and used this information to conclude several transactions with clients of Hangcheng Patent Agency for profit. Ultimately, the court determined that Hou Mouyu's actions constituted infringement and ordered him to cease the infringing activities and compensate for the losses.
Case 2: Trade Secret Infringement Caused by Guo Mou's Job Change
Guo Mou once served as the sales manager at Xindu Chemical Company, and both parties had signed a confidentiality agreement. In February 2002, after leaving the company, Guo Mou joined Futian Chemical Company and used the client information from his former employer to sell products that competed with those of Xindu Chemical Company. After reviewing the case, the court determined that the client list of Xindu Chemical Company was a trade secret and that Guo Mou's actions constituted infringement. He was ordered to compensate Xindu Chemical Company with 80,000 yuan.
Why Is a Client List Considered a Trade Secret?
According to the Anti-Unfair Competition Law and relevant legal provisions, a client list is considered a trade secret when it meets the following conditions:
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Not Generally Known to the Public: The information in the client list, such as the clients' trading habits, special needs, and precise and detailed contact information, is formed through the long-term operation of the company and is not generally known to the public.
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Commercial Value: This information can bring competitive advantages and economic benefits to the company.
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Confidentiality Measures: The company must take reasonable confidentiality measures, such as signing confidentiality agreements and restricting access to the information.
How Can Companies Prevent Employees from Taking Client Lists When They Leave?
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Establish a Comprehensive Confidentiality System
Companies should develop detailed confidentiality policies, clarifying the scope of trade secrets such as client lists and the confidentiality measures. For example, signing confidentiality agreements with employees and specifying their confidentiality obligations and liability for breach of contract.
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Strengthen Employee Training
Regularly conduct training on the protection of trade secrets for employees to enhance their awareness of confidentiality. Make employees understand the legal consequences of taking client lists when they change jobs, reducing the occurrence of infringement from the source.
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Limit Access to Information
Implement a tiered management system for important information such as client lists and restrict employees' access to it. Only employees who are truly necessary and authorized can access core client information.
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Monitoring and Early Warning
Utilize the professional capabilities of market research companies to monitor market dynamics and detect potential infringement in a timely manner. Once any abnormality is found, immediate measures should be taken, such as sending a lawyer's letter or filing a lawsuit.
Legal Rights Protection: What to Do When Infringement Occurs?
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Collect Evidence
Once it is discovered that an employee has taken the client list upon leaving, the company should immediately collect relevant evidence, including confidentiality agreements, client transaction records, and evidence of the infringing activities.
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Send a Lawyer's Letter
Send a lawyer's letter to the infringing employee and their new company, demanding that they cease the infringing activities and negotiate compensation matters.
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File a Lawsuit
If negotiations fail, the company can file a lawsuit in court, demanding that the infringer cease the infringing activities and compensate for economic losses. According to the law, the compensation amount for infringement can include the actual losses of the company, the profits of the infringer, and reasonable expenses for rights protection.
Conclusion
The act of employees taking client lists when they switch jobs not only damages the economic interests of the company but also disrupts the fair competition in the market. Companies must attach great importance to the protection of trade secrets, establish a comprehensive confidentiality system, strengthen employee training, and use the professional capabilities of market research companies for monitoring and early warning. When infringement occurs, companies should take decisive legal measures to protect their rights and interests. Only in this way can companies safeguard the "lifeline" of trade secrets in fierce market competition and ensure sustainable development.
