An ex-employee stole 37,000+ technical drawings.
The rival replicated a R&D outcome costing the original firm 363 million yuan and 15 years’ efforts within half a year.
The final ruling ordered joint compensation of 382 million yuan, alongside full destruction of infringing goods, mandatory confidentiality pledges by all staff and freezing of 400 million-yuan subsidiary equity. Such is the hefty price for malicious trade secret theft.
I. Cost of a Pre-planned Job Jump
In February 2017, Tian, former product manager of Beijing Jingdiao Group, exploited corporate system loopholes to download documents 162 times and copy files over 70,000 times via internal equipment before resignation. He illicitly copied 37,340 CNC design blueprints and technical files covering 27 product lines and 160 models, virtually stealing half of the firm’s R&D institute’s core achievements via portable storage drives.
Tian quit Jingdiao on March 26 and joined Shenzhen Genesis Machinery merely four days later under an assumed name as deputy GM in charge of glass processing equipment. Jingdiao spent 15 years and 363 million yuan developing the core glass machine technology, yet Genesis filed relevant patents and rapidly scaled up its related business just half a year after Tian’s onboarding.
The litigation lasted over six years. The first trial awarded 12.8 million yuan in compensation, with both sides filing appeals. By late 2025, the Supreme People’s Court overturned the original verdict and fully upheld Jingdiao’s 381.81 million-yuan claim, issuing a final judgment for total damages of roughly 382 million yuan, nearly 30 times the initial compensation amount.
II. Calculation Behind the 382-million-yuan Award
The low first-instance compensation was calculated merely based on profits from 55 specific machine units totaling 276,200 yuan. The Supreme People’s Court adopted a new calculation standard on appeal: all glass machines developed using stolen confidential technology were counted as infringing products. Total illegal gains were calculated by multiplying unit price, sales volume and reasonable profit margin, arriving at a base compensation of 254 million yuan. A 3-fold punitive multiplier was applied, resulting in final damages of 381.63 million yuan.
Severe subjective malice and aggravated circumstances were confirmed for three reasons: structured mass data theft before resignation; covert employment under a fake identity; continuous production and sales of infringing goods even after Tian’s criminal conviction. The ruling wiped over 1.5 billion yuan off Genesis’ market value in a single day and dragged its 2025 net profit down by nearly 40% year-on-year.
III. Penalties Extend Far Beyond Monetary Compensation
Beyond the 382-million-yuan damages, the Supreme Court imposed multiple supplementary sanctions:
All paper and electronic drawings containing confidential technology must be destroyed;
The judgment and cease-and-desist order shall be circulated to all shareholders, directors, supervisors and employees;
All relevant personnel must sign non-disclosure and non-infringement commitments;
Subsidiary equity valued at around 400 million yuan under Genesis was frozen.
IV. Core Enlightenments for Enterprises
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Staff poaching carries tremendous legal risks. Companies shall bear joint infringement liability if they recruit talents with stolen core trade secrets and exploit such confidential technologies.
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Lowered evidentiary threshold for trade secret protection. Per Article 32 of the Anti-Unfair Competition Law, once the rights holder submits preliminary proof of confidentiality measures and suspected infringement, the burden of proof shifts to the defendant, who must prove no unauthorized usage of stolen technology.
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Criminal conviction against individuals does not exempt enterprises from civil liability. While Tian was criminally penalized in 2019, Jingdiao pursued separate civil litigation and secured massive compensation against the infringing enterprise.
Conclusion
The 382-million-yuan ruling delivers a clear regulatory signal: trade secret protection is no longer nominal. Strict legal constraints curb predatory theft and safeguard corporate R&D investment and innovation vitality.
