Data, algorithms added to trade secret regulations

China’s State Administration for Market Regulation implemented updated trade secret regulations on Monday, the first to legally protect data, algorithms, computer programs, and code. The changes reflect the country’s push to align intellectual property laws with its digital economy, where AI, cloud computing, and data-driven innovation now drive competitive advantages. Previously, trade secret protections focused on industrial know-how like manufacturing processes and formulas. The new rules explicitly include digital assets, provided they meet three criteria: they must not be publicly known, hold commercial value, and be secured through reasonable confidentiality measures. The definition of 'not publicly known' excludes information readily accessible to industry participants. The update comes as Chinese firms like DeepSeek and Alibaba accelerate AI development, with policymakers prioritizing technological self-reliance. Unlike patents, which require public disclosure, trade secret protections allow companies to shield proprietary AI advancements, such as model architectures and optimization techniques, which often result from years of investment in talent and computing power. Wang Peng, a researcher at the Beijing Academy of Social Sciences, noted the framework provides stronger legal tools for protecting core digital assets. The move signals China’s recognition of data and algorithms as critical intellectual property in the AI era, comparable to traditional patents and industrial know-how. The regulations also emphasize that not all data qualifies for protection, clarifying legal boundaries for businesses. As global AI competition intensifies, the update aims to encourage continued R&D investment while safeguarding proprietary innovations.