Being a kind of intangible business asset, the trade secret is an important intellectual property for companies to overcome competitors and maintain competitive advantages. Ever since China’s access to WTO, the value of trade secrets has become more and more important with the development of economy. Therefore, strong strength of trade secrets protection is in need in China. Then how about trade secrets protection in China by the means of quantification? Is it strong or weak? Compared with great multitude of literatures on patent protection’s quantitative analysis, there are a few of literatures referred to the quantification of trade secrets protection at present. So the paper constructs indices to measure trade secrets protection in the level of legislation, enforcement, and actual protection of China over the period 1993-2014 respectively.
Firstly, according to TRIPS and “Regulations on the Protection of Anti-Unfair Competition for reference to perfect anti-unfair competition law” issued by WIPO, the index of trade secrets legislation in China is constructed. It is composed of six components that together determine the overall level of legislation. The six components of the index are: (1) elements of a trade secret; (2) ratification of international convention; (3) the confidentiality period; (4) provisions for loss of trade secret rights; (5) enforcement mechanisms; (6) non-competition clause. The value of each component ranges from 0 to 1. Score of the index is the un-weighted sum of each component’s value, and higher score of the index indicates stronger level of trade secrets legislation. In order to check the reasonability of the index’s weight, the sensitivity test of trade secrets legislative index to alternative weighting schemes is carried out. And we find it is feasible to assign an equal weight to each of components. Next the level of trade secrets’ legislation over the period 1993-2014 is quantified from the relevant laws of China according to sum of each component’s value. For the construction of trade secrets enforcement’s index, this paper devises two indicators: consciousness of law enforcement and the quality of judicial judgment. The full score of each indicator is 1, and weights of these two indicators are the same (sensitivity test of index to alternative weight is also carried out). The score of the level about law enforcement is an arithmetic mean of these two indicators. And the score ranges from 0 to 1. The meaning of 0 is that all contents of trade secrets law are not enforced fully effectively, and the meaning of 1 is opposite to the meaning of 0. By using the above method, we get the quantitative data on the level of trade secrets enforcement from 1993 to 2014. For the index of trade secrets actual protection in China, legislative index multiplying by enforcement index is used here. And we get the measured result of actual protection over the period 1993-2014 according to this way.
Secondly, the paper analyses the quantitative results of legislation, enforcement, and actual protection of trade secrets. In the view of legislation, trade secrets protection has been weak from 1993 to 2007, and it developed slowly. Ever since 2008, the trade secrets legislation has increased rapidly, and it reached 91.67% of its full score. In 2013, the score of legislative level was 5.833, and it is close to the full score of 6. This indicates the trade secrets legislation in China is relatively perfect now. For the level of enforcement, it is on the rise year by year, and it develops more gently compared with the legislative level. From 1993 to 2014, the enforcement’s level increased by 58.81%. However, the maximum value of enforcement is 0.613 in 2014, and it reaches the 61.3% of the enforcement’s total value. This implies the level of enforcement is not high. Two indicators’ trends of the enforcement index have also their own characteristics. The level of judicial judgment’s quality is higher than that of enforcement consciousness. It developed relatively stable and has not changed much. Even if the level of enforcement consciousness has been improved greatly, it is still very weak. This restricts the improvement of enforcement’s level, and it is the important reason for the enforcement being not high. As far as the level of actual protection is considered, China’s access to WTO in 2001 and “Interpretation of the Supreme People’s Court” in 2007 improve its level strongly. However, the actual level developed slowly and has not been high after 2008 for the restriction of enforcement. Therefore, it is an efficient way to improve the level of trade secrets actual protection by increasing the enforcement’s level.
At last, econometric analysis is carried out for determinants of trade secrets protection. We find that economic development, education level and R&D all have the positive effect on the trade secrets actual protection. China is still in the stage of imitative innovation, and it is helpful for firms to learn advanced technology through trade for the case of weak protection. So trade openness has the negative effect on the improvement of actual protection. However, being in the stage of imitative innovation for a long time is not the fundamental method of improving the level of technology. China is actively seeking the strategic way of transforming from imitative innovation to independent innovation. The activity of independent innovation needs strong strength of trade secrets actual protection. Thus the fundamental way of improving the trade secrets protection is to change the mode of innovation.