In February 2026, China’s IP regulations and judicial practice showed a parallel two track trend: trade secret protection and patent priority examination will undergo major upgrades, and several judgments involving high damages and good-faith exercise of rights were released. Cases relating to AI have also clearly increased, and more operable standards are formed.

Administrative Upgrades in Trade Secret and Patent Priority Examination

The issuance of the Regulation on Trade Secret Protection represents the most significant update to the administrative enforcement in three decades. Key updates include: 

• redefining the scope and definition for trade secrets;
• establishing a complete administrative enforcement chain for the first time;
• introducing clear sanctioning rules and enforcement confidentiality obligations.

The reforms make the applicable conditions and procedures for administrative protection more transparent. 

As for the Draft Amendments to the Measures for Patent Priority Examination (for public comment), this aims at:

• expanding the scope to priority emerging industries and key core technologies;
• adding departmental recommendation mechanisms and good faith clauses;
• setting higher good faith standards for applicants.

For projects involving high tech and new quality productive forces, this is a new tool to accelerate deployment and reduce market entry time.

Keywords of New Cases: Good-faith, High Damages, and AI

1. Good Faith Litigation

Several recent judgments highlight the stance on good faith exercise of rights. Notably, in a technology patent infringement case, the Supreme Court expressly condemned the plaintiff’s abuse of litigation rights, emphasizing that patent litigation must not degenerate into a commercial pressure tactic.  

Moreover, in a case involving conflict between designs and prior trademarks, the Supreme Court emphasized that a design’s high degree of similarity in distinctiveness and public perception to prior trademarks can constitute a trademark rights conflict.  This means enterprises pursuing dual path protection (patent & trademark) need more precise conflict assessments.

2. High damages

the Supreme Court recently issued the following high damage cases:

• In a patent case, the court applied a “substantive determination of functional effects” method to raise damages to RMB 120 million (approx. USD 17 million).  
• In a trade secret case, the application of triple punitive damages raises loss calculation to RMB 380 million (approx. USD54 million). 
• In another case, refusal by the infringer to submit account books led to adverse presumptions and damages of RMB 198 million (approx. USD 28 million).  

Such precedents raise infringement costs and clarify the legal consequences of evidence obstruction and malicious infringement.

3. New Frontiers in AI Adjudication 

In the AI synthesized voice case, the Beijing Internet Court affirmed protectability of identifiable voice rights, and required operators with review capabilities to bear joint liability.

In a voice command case, Chengdu Court brought intelligence voice identifiers under the protection of the Anti Unfair Competition Law.

SAMR also released five typical AI related cases involving confusion, false publicity, and trade secret infringement. They underscored the importance of authorization and compliance awareness. 

AI is emerging as a frontier in rulings. This aligns with AI’s large scale application on the Spring Festival Gala for the first time. This simultaneous pace of innovation and oversight requiring enterprises must put legal safeguards ahead of both innovation and commercial implementation.

The Five-Year Plan Marks Upgrade in IP Quality and Innovation Integration

China’s IP Data for 2025 highlighted achievements in high value patents and brand enhancement, setting a tone for the “15th Five Year Plan” focused on quality orientation and international competitiveness.

Jiangsu Province launched the country’s first “AI + IP” dual empowerment action plan, marking the government’s view of AI and IP as a mutually integrated ecosystem. 

Shanghai’s first case of trade secret pledge financing has transformed algorithm models and security architectures into “Data IP”. Such practice may be replicated in other regions, forming a new model for IP asset monetization.

China’s IP framework is steadily tightening—from trade secrets and patents to trademark disputes and AI. With higher infringement penalties, deeper good-faith obligations, and firmer enforcement, the compliance bar is rising.

For businesses, this means IP strategy must shift from reactive to proactive. Enterprises should build end to end compliance processes and maintain robust evidence and usage records to demonstrate integrity in any dispute. In short, protecting innovation is as much about preparation as it is about enforcement.

If you are interested in exploring these developments in greater detail, we invite you to reach out to us for further discussion.

Reference

1. (2025) Zui Gao Fa Zhi Min Zhong No. 756
2. (2023) Zui Gao Fa Zhi Xing Zhong No. 860, etc.
3. (2024) Zui Gao Fa Zhi Min Zhong No. 1254
4. (2023) Zui Gao Fa Zhi Min Zhong No. 2039
5. (2023) Zui Gao Fa Zhi Min Zhong No. 3118