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Exploring the Impact of the New Trade Secret Protection Regulations on the Low-Altitude Economy Industry

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20 MIN READ
ABSTRACT

The Trade Secret Protection Regulations, effective June 1, 2026, represent a paradigm shift in China's trade secret protection landscape. Attorney Zhao Mengzhu examines the new regulations' evolutionary path, core revisions, and their profound impact on the low-altitude economy industry in terms of rights confirmation, organizational governance, and industrial chain compliance, pointing out that the new regulations are driving the transition of trade secret protection from a 'compliance cost center' to a 'core competitive barrier.'

Abstract

With the in-depth development of the digital economy and the iterative upgrading of industrial forms, the low-altitude economy, as a typical representative of new quality productive forces, demands greater legal certainty for knowledge assets. The Trade Secret Protection Regulations (hereinafter “New Regulations”), effective June 1, 2026, represent not only a three-decade paradigm reconstruction in China’s trade secret protection field but also a deep response to the modern industrial governance system. This article explores the New Regulations’ institutional evolution path, core revision logic, and focuses on their far-reaching impact on the low-altitude economy industry in terms of rights confirmation, organizational governance, and industrial chain compliance.

I. Institutional Background and Evolutionary Logic

The trade secret protection system, as a core mechanism for maintaining fair competition and incentivizing innovation, traces its regulatory origins to the 1995 Provisions on Prohibiting Infringement of Trade Secrets. However, after nearly three decades of operation, the original framework’s limitations in addressing new types of illegal conduct in the digital economy era—such as data infringement and algorithmic theft—have become increasingly prominent.

This revision process exhibits significant phasing and institutional complexity. Although the revision procedure commenced in 2020, the legislative process entered a cautious observation period due to coordination with the overall amendment rhythm of the Anti-Unfair Competition Law. It was not until July 2024, when the Third Plenary Session of the 20th Central Committee adopted a strategic top-level design explicitly incorporating “building a trade secret protection system” into the national comprehensive deepening reform blueprint, that the New Regulations gained critical legal support and policy momentum.

II. Paradigm Reconstruction of the Regulatory System

The New Regulations’ innovative contributions focus on five core dimensions:

A. Extension of Protected Subject Matter

The New Regulations significantly expand the connotation and extension of trade secrets, expressly including high-value digital assets such as “code,” “algorithms,” and “failed experimental data” within the scope of legal protection. This shift marks the transition of institutional logic from outcome-oriented to process-oriented, achieving closed-loop protection of scientific research achievements and the entire R&D process.

B. Modernization of Confidentiality Measure Determination

In determining “corresponding confidentiality measures,” the New Regulations demonstrate significant contemporary adaptability. Through legal fiction, they affirm the legal效力 of digital technical means such as access分级, data masking, and operational log tracing, responding to the impact of emerging work paradigms like remote work and cross-border collaboration on traditional physical isolation measures.

C. Specialization of Enforcement Jurisdiction

To address the “professional vacuum” dilemma faced by grassroots enforcement departments when handling complex technical disputes, the New Regulations establish the principle of “level jurisdiction as primary, authorized jurisdiction as supplementary,” stipulating that technical secret cases shall原则上 be handled by market supervision departments at or above the city level with districts, ensuring the prudence and professional standard of administrative enforcement.

D. Chain-based Anti-Infringement Framework

By refining the discretionary standards for third parties’ “knowing or should have known” status, the New Regulations construct a chain-based liability system. This regulatory logic effectively curbs derivative illegal acts such as solicitation, inducement, and assistance in infringement, achieving penetrating supervision over the illegal flow path of trade secrets.

E. Precision of Penalty Standards

In terms of legal liability, the New Regulations introduce an elastic evaluation index centered on “the amount of direct loss to the right holder” and strengthen penalties for circumstances involving显著 subjective malice such as “repeat infringement.” This aims to construct a governance pattern combining high violation costs with strong administrative deterrence through precise legal cost accounting.

III. Analysis of Impact on the Low-Altitude Economy Industry

The New Regulations’ impact on the low-altitude economy industry manifests in five key areas:

A. Rights Confirmation of Digital Assets: From Single Outcome to Full Process

Article 5 of the New Regulations, through explicit expansion of the scope of technical information, brings digital assets such as “code, algorithms, and computer programs” within the protection hierarchy of trade secrets. This provides crucial legal support for the low-altitude economy industry: core digital assets developed through substantial R&D investment—such as flight control logic, path planning matrices, and autonomous sensing obstacle avoidance systems—now receive rights protection at the same level as traditional hardware architectures.

Particularly innovative is Article 7’s reconceptualization of the “having commercial value” element, expressly recognizing “phased results and failed experimental data and technical solutions” as intangible assets in the legal sense. For low-altitude economy enterprises, this means the evaluation logic for R&D value has shifted from a single “outcome-oriented” approach to “process assetization.”

Given that the low-altitude economy industry heavily relies on distributed R&D, cross-regional collaboration, and cloud-based data interaction, the carrier form and flow scenarios of trade secrets have undergone profound digital migration. Article 9 of the New Regulations, through legal enumeration, expressly recognizes the legal效力 of digital prevention and control measures such as “access分级, data masking, and operational log tracing.”

C. Professionalization of Jurisdiction Allocation: Upward Shift of Authority

The New Regulations establish a framework where technical secret cases are原则上 under the jurisdiction of market supervision departments at or above the city level with districts, aiming to resolve the “professional vacuum” and “efficiency deficit” in grassroots administrative enforcement when dealing with complex technical disputes.

D. Chain-based Reconstruction of Tort Liability: Penetrating Supervision

Article 14 of the New Regulations, by refining the subjective standards for third parties’ “knowing or should have known,” constructs a liability determination system贯穿 the entire flow process of trade secrets. This institutional evolution provides solid legal support for precisely targeting solicitation, inducement, and assistance in infringement across the industrial chain.

E. Precision of Administrative Sanctions: Elastic Discretion and Deterrence

The New Regulations achieve a paradigm shift from “fixed penalties” to “effect-oriented” sanctions. By introducing elastic evaluation indicators such as “causing relatively large direct losses to the right holder” and加重 defining malicious circumstances like “repeat infringement within two years,” they construct an administrative sanction system highly adapted to social harmfulness.

IV. Commercial Impact Analysis: From Compliance Cost Center to Core Competitive Barrier

The New Regulations’ implementation not only reconstructs legal regulatory logic but also profoundly triggers changes in commercial strategy and competitive landscape in the low-altitude economy industry.

A. Compliance Capability as a Market “Divide”

The New Regulations significantly raise enterprises’ institutional compliance thresholds. Building a trade secret protection system aligned with the New Regulations—covering differentiated access management, dynamic audit tracking, and strict supply chain confidentiality networks—requires substantial financial and professional human capital investment. This may accelerate the Matthew effect where well-capitalized leading enterprises convert compliance costs into exclusive competitive barriers.

B. Reshaping Partner Evaluation Mechanisms in Collaborative Innovation

Under the trend of open innovation and deep industry-university-research integration, trade secret protection capability has evolved from an internal management factor to a core准入 indicator for external collaboration.

C. Regulation of Talent Mobility and Labor Capital Protection

Article 15 of the New Regulations establishes the legality of employees using “general knowledge, skills, and industry experience,” requiring enterprises to shift from “broad containment” to “precise identification” in human resources governance.

RESEARCH TEAM

Zhao Mengzhu is a researcher at the Long An Bay Area Intellectual Property Research Center and a member of the Corporate Law and Equity Investment Professional Committee, Intellectual Property Professional Committee, and Low-Altitude Economy Business Committee at Long An (Shenzhen) Law Firm. She previously served in legal and compliance management roles at legal technology companies, leading entertainment enterprises, and Fortune 500 companies for many years, and holds the EXIN-DPO international certification. Her main practice areas include intellectual property, network security and data (transaction) compliance, internet product compliance, equity investment and financing, corporate governance (including ESOP), family governance, and related dispute resolution.