"It's just like Infernal Affairs."

Lawyer Cui Can, who has long handled trade secret cases, remembers one young man most vividly.

At the time of the incident, he was only 26 or 27 years old. He had worked at Company A for one year, then jumped to competitor Company B and worked undercover for two years and four months. With decent education and technical skills, plus eloquence, he became good friends with many engineers at Company B. "If he had stayed longer, he might even have become a core technical leader or middle manager."

If not for his sudden resignation coinciding with the upcoming release of a major technology at Company B, no one would have suspected that this young man was a spy sent by a rival company.

Company B soon audited his work computer and surveillance footage. Over more than two years, core information and blueprints had been continuously leaked to Company A.

Due to the enormous financial scale involved, the young man might have to go to prison in his third year after graduation, spending the next three to ten years behind bars. Cui Can felt sorry for him.

The client's reaction also left a deep impression on Cui Can. Even at the stage of criminal filing, the person in charge of Company B was still bewildered: "We traveled together and drank together last month. Why would he do such a thing?"

It was exactly like Infernal Affairs.

Cui Can compares corporate espionage among large companies to a bloodless war.

It doesn't happen on a battlefield but in offices, factory workshops, coffee shops, or even an ordinary social media post. A delivery driver, a repairman, a newly hired young engineer, or even a long‑trusted employee can become a channel for information leakage.

There are no gunshots, but there are real casualties. A stolen formula, a blueprint, a piece of source code can rewrite a company's fate or even reshape an entire industry. Those involved in trade secret leaks may face financial ruin or imprisonment. Like military warfare, the ultimate goal is to destroy competitors.

On the other side of the scale, however, trade secret protection is increasingly overused, becoming a weapon for large companies to monitor employees, punish those who leave, and even sabotage rivals' financing and IPOs.

The following is Cui Can's account.

A bloodless war

As a lawyer who knows trade secrets very well, sometimes it's hard for me to define exactly what a trade secret is.

By legal definition, it's simple: technical or commercial information that is not publicly known, has commercial value, and has been subject to reasonable confidentiality measures by its owner.

More specifically, three words: secrecy, value, and confidentiality. For example, formulas, blueprints, source code, AI training data, as well as pricing strategies, operating costs, and customer lists.

Sounds easy, right? But when it comes to actual cases, what qualifies as a secret? And under what circumstances does a secret have value?

Take customer lists: are they trade secrets? There are countless academic papers and court cases with conflicting opinions.

Although trade secret regulations are quite detailed, they can never fully address the ever‑changing real world. Each case must be examined individually — it's extremely complex.

In real life, obtaining trade secrets is not as high‑tech as in movies. More often, leaks start with people.

The most common method is poaching — not just one person, but whole teams or entire business units.

From the cases I've handled, using poaching to acquire trade secrets is becoming increasingly common. In fast‑growing industries, money alone isn't enough — you need technology.

In fields like AI, embodied intelligence, and new energy, double or triple salaries to poach talent are common. If you offer someone a price they can't refuse, it's hard for them not to be tempted. For a company, if an acquisition costs 200 million, but poaching 20 core talents costs only 20 million, it's a simple calculation.

A typical case is Geely v. WM Motor. After WM Motor was founded by former Geely executives, it systematically poached more than 40 senior managers and technical backbones from Geely, reportedly taking an entire chassis R&D team. The court eventually found trade secret infringement and awarded over 600 million yuan in damages — the highest compensation in a domestic trade secret case so far.

So, as you can see, many trade secret disputes are ostensibly about technology but are essentially talent wars.

The Shanghai Third Intermediate People's Court and the Shanghai Intellectual Property Court jointly released data on trade secret cases. Between 2015 and 2023, nearly 90% of civil trade secret cases were triggered by employee mobility. And all criminal trade secret cases were caused by talent mobility.

Besides poaching, commercial bribery is also common.

Some external consulting companies, under the guise of "expert interviews" or "industry research," approach current employees of big tech firms to buy information. I've read reports where fees range from 1,000–2,000 RMB per hour for ordinary employees to tens of thousands for senior managers or individuals with special access.

This has become an industry chain, especially in the internet sector.

An even more covert method is sending in undercover operatives. While bribery buys people already inside a company, undercover espionage involves planting one's own people.

Some spies are relatively low‑level — posing as delivery drivers or water delivery workers to observe factory layouts and production environments. They usually only obtain superficial information.

The truly dangerous ones are knowledgeable individuals, such as engineers. They understand the technology and join a target company with a clear mission. They know exactly which documents are valuable and can steal secrets without downloading excessive files or raising suspicion.

Some companies adopt long‑term strategies, embedding clean‑record young people into rival companies. If any of them succeed, they operate as isolated nodes, with no knowledge of each other.

Of course, digital theft and leakage have also increased in recent years.

When people hear "digital espionage," they first think of hacker attacks — the high‑tech methods seen in movies. But in my experience, the most frequent leaks happen through everyday actions.

Examples include sending a cloud link to the wrong group, downloading work presentations or business documents before resigning, sharing files via personal WeChat, or casually posting an office photo or an anonymous complaint on Xiaohongshu, Moments, or Maimai.

Many people act unintentionally or don't even realize they are leaking secrets — they're just sharing daily life. But for professional intelligence gatherers, the background of a single photo can reveal your floor and room number; everything you post becomes intel that can be pieced together.

After handling so many cases, I feel strongly that people are the weakest link in any security chain.

In many large companies, technical security is not easy to breach. The most damaging leaks often come from the simplest methods: a trusted person who has access to core information and can steal it almost at will.

Many trade secret cases result from internal betrayal — trouble truly starts from within.

After a leak, nothing is trivial

What are the consequences of trade secret leakage?

These cases can be viewed from two sides: the consequences for the leaker and the losses suffered by the company.

Many people think that leaking secrets might just result in a fine or being fired. But in reality, the legal liabilities are heavy, typically including civil, criminal, and administrative responsibility.

First, civil liability — paying damages. In the Geely v. WM Motor case, because it constituted joint infringement, individuals involved also bore joint liability. Imagine an ordinary person facing billion‑level compensation — their life would essentially be ruined. Honestly, imprisonment might be preferable.

Second, criminal liability. The crime of infringing trade secrets has existed for many years. In core industries, the value of trade secrets can be assessed very high — R&D costs, potential revenue, and competitive losses can all be included. You might think you just took some documents or sent out a bit of information, but from the company's perspective, the losses can quickly escalate. After the 2020 criminal law amendment, the maximum sentence for trade secret infringement was raised to ten years.

Third, administrative liability. Market regulatory authorities can also impose penalties for trade secret infringement, and the fines can be substantial.

So I really remind everyone: don't just focus on short‑term gains. Once you cross the line, the consequences can be terrifying.

From the perspective of the company that has been compromised, the loss is not just a simple "business impact" — it could wipe out the entire company.

In technology‑intensive industries, technology determines fate. For example, in chips, customers buy the best, winner‑takes‑all. In new energy, even a 0.2% efficiency improvement in a battery is a major innovation. If a technological advantage is lost or the technology is stolen, the company might collapse, reshaping the industry landscape.

Consider the fiercely competitive internet sector. During the peak battle between Taobao Flash Buy and Meituan, if I could obtain a competitor's subsidy strategy, I could adjust my subsidies the next day and immediately shift order volumes. The economic value is far beyond what ordinary people imagine.

Even some operational information — less technical but equally valuable — can become a weapon. Internal structures, who truly holds power, the style of key decision‑makers, who might be poached — all of this information can be weaponised in intense competition.

Startups are especially vulnerable.

Many startup founders are brilliant or possess cutting‑edge technology. But their biggest problem is that while the technology is valuable, their protection measures are weak. If I'm an investor and acquisition fails, I could illegally acquire the technology at very low cost.

Companies need to invest a lot of time and money in protection. Many startup owners initially don't take it seriously — they only start learning after suffering a major loss.

Large companies handle trade secret protection relatively well. At the technical level, many files contain invisible watermarks, hidden codes, and access logs. Don't think that taking a photo with your phone, screenshotting, or transferring files to another device will go unnoticed. In many cases, companies can trace it back.

They also institutionalize trade secret protection, embedding it into HR training and employee risk management — such as integrity training, quarterly compliance bulletins. Real cases of people being imprisoned, fired for bribery, or disciplined for file transfers serve as effective, legal "deterrence."

Of course, many large companies increasingly monitor employee behavior in the name of information security and trade secret protection, sometimes crossing boundaries.

The other side of the scale: abuse of power

I'm increasingly aware of a problem: monitoring and punishment justified by trade secrets are being overused.

I've encountered many workers subject to non‑compete clauses. Frankly, 99% of them don't possess significant trade secrets. Many are ordinary employees at junior levels, yet companies sue them for two to five times their annual salary in liquidated damages, citing trade secrets.

Sometimes I ask corporate legal departments why they do this. They proudly say it's to protect the company's trade secrets.

But inside, I think, "Oh, come on — it's not that noble."

Often, it's just a superficially righteous excuse. Lawsuits are becoming a tool to harass and retaliate. I've seen too many companies using various odd justifications to eliminate internal rivals.

This trend is deepening the crisis of trust between companies and employees.

Take internet companies. Ten years ago, the words used to describe the industry were open, innovative, inclusive, and encouraging individual initiative. But now, ask a young person how they would describe big tech firms.

Many would say: large, strict rules, excessive regulations, feeling like a cog in a machine with no sense of value, plus overwork and unhappiness.

There are many reasons for this shift. But I believe the growing distrust between employers and employees is a major part of it.

When companies trust employees less, management inevitably becomes stricter. And that strictness gradually erodes employees' initiative.

In the non‑compete cases I handle, I notice that new hires now have to sign far more documents than in the past. Employment contracts are 10–20 pages, followed by confidentiality agreements, non‑compete agreements, various undertakings, and policy training sessions.

A fresh graduate, before even starting work, sees a pile of clauses: a non‑compete agreement with liquidated damages of five times annual salary, a dozen pages of confidentiality terms repeatedly emphasizing what is confidential, what behavior leads to termination, and what leads to legal action. How does that make them feel?

The spark they had when joining, even if not extinguished, is greatly diminished.

Once they start working, employees will prioritize safety above all else. They think, "I can sacrifice efficiency, avoid pursuing the optimal solution, reduce communication and expression, but I must not make a mistake."

From an individual perspective, that's not wrong. But at the company level, efficiency, innovation, and collaboration all suffer.

When leaving a job, the distrust becomes even more apparent.

Some companies see every departing employee as a potential risk. They think, "We invested years in training you — are you going to take our trade secrets to a competitor? Poach our clients? Use our technology?"

Then they either trigger non‑compete clauses or pursue trade secret claims, auditing what the employee downloaded, emailed, or accessed before leaving.

But companies should also ask themselves: what exactly is worth protecting? They say they've nurtured employees for years, but employees have also contributed years of work. Companies can't only see their own investment while ignoring what employees have delivered. If both sides remain constantly on guard, trust will never be established.

In recent years, I've seen labour‑management conflicts grow. People who are constantly targeted by superiors or on the verge of layoffs develop intense resentment.

I had a case involving a young man who had just entered the internet industry. His supervisor wanted to push him out. He was furious. Around that time, a consulting firm contacted him, offering to pay for his insights. He agreed.

The young man later told me that anger had clouded his judgment. He only accepted payment for two hours but ended up talking for more than ten hours — free of charge. When the firm offered to pay more, he refused: "No need. I don't care about the money; I just want to share the information."

Of course, the company eventually found out. Although it didn't lead to criminal charges, the situation turned ugly, and he deeply regretted it — but it was too late.

Another emerging trend is the malicious use of trade secret and non‑compete lawsuits as weapons in commercial warfare — such as IPO sabotage or financing disruption, especially in the new energy sector.

Let me give you an example.

A highly skilled PhD, formerly a vice president at a new energy company, left to start his own business. His company grew quickly and raised funds rapidly. Finally, a major institution was about to invest — a deal that would significantly boost valuation and industry influence.

At that critical moment, his former employer suddenly filed a non‑compete and trade secret lawsuit, alleging violation of the non‑compete and demanding an injunction and damages.

The PhD had been extremely cautious before leaving. To avoid future disputes, he signed an agreement with his former employer, giving up options and bonuses in exchange for a written commitment not to pursue non‑compete or trade secret claims against him. The company issued that commitment letter.

But despite knowing the letter and that they would likely lose the case, the company filed the lawsuit precisely at the financing juncture.

In the end, we won the case, but the financing fell through, the window of opportunity was lost, and commercially, we lost.

So, as you see, trade secret protection is not a simple matter of right or wrong. Companies must protect core secrets because that affects survival. But if "trade secret protection" is expanded indefinitely into a tool for monitoring employees, punishing leavers, attacking entrepreneurs, or even internal infighting, it can also harm a company's growth.

Companies need to guard against rivals, but they shouldn't treat all employees as adversaries.

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