Judicial Consideration of Technical Contribution Rate in Trade Secret Cases: Analysis of Chinese Court Precedents

WISECODE Take

Many business owners mistakenly believe that if a product contains another party's technology, they must pay all profits as damages. I clarify that courts focus on the 'technical contribution rate,' which is like a relay race where the victory cannot be solely attributed to a single runner. According to the case analysis published on August 15, 2026, the Supreme People's Court in the (2019) Supreme Court Zhi Min Zhong No. 7 case awarded 5 million RMB after considering R&D costs of over 520,000 RMB. In the (2023) Supreme Court Zhi Min Zhong No. 2562 case, the court referenced breeding industry conventions to set the contribution rate of the parent 'W68' at 40%, awarding 1.97 million RMB. For companies relying on channels or branding, damages may be significantly lower due to a low contribution rate, while those with independent R&D and complete records remain unaffected. Zhidian's trade secret management system establishment service helps companies clarify their R&D trajectories to address such disputes. We recommend two actions. First, meticulously record R&D hours and costs during development to prove your own technical contribution; second, clearly define technology value proportions in joint development contracts. The quantification of technical contribution rates reminds us to use data to dissect value rather than just arguing over right and wrong in IP litigation.