Rebalancing the Burden of Proof for Trade Secrets Cases in China: A Detailed Scrutiny and Comparative Analysis of Article 32

One of the most significant legal changes to the trade secrets system in China during the past three years has been the addition of Article 32 of the 2019 Anti-Unfair Competition Law (AUCL). Article 32, which seeks to reduce plaintiffs’ burden of proof, was promulgated against the backdrop of the U.S.-China trade war and its language largely follows that of the U.S.-China Phase One Agreement. Article 32 alleviates plaintiffs’ burden by allowing the burden of proof for the trade secrets status elements (secrecy and commercial value) and for the existence of misappropriation conduct to be shifted to defendants. It is, however, full of problems. First, its language is ambiguous as to whether it creates presumptions to facilitate shifting the burden of production during litigation or whether it functions as a statutory exception to reallocate the burden of persuasion at the outset. Second, it is questionable whether plaintiffs are justified in enjoying the reduced burden provided by Article 32. In light of these doubts, this Article reexamines Article 32 of the current Chinese trade secrets law by attempting to clarify its ambiguity and introduce a suitable interpretation. It reevaluates Article 32 and explores whether any justifications exist to warrant the shifted burdens imposed on defendants. This Article also compares the current Article 32 with U.S. laws to highlight Article 32’s problems. Finally, it suggests amendments to Article 32 in an effort to rebalance the burden on both sides. Copyright (c) 2023 Yang Chen.