Key takeaways
- Trade secrets have overtaken patents and trademarks as the primary intellectual property risk for US firms in China.
- A US-China Business Council survey highlights growing concerns over the safety of non-public proprietary information.
- Geopolitical and regulatory pressures are identified as key factors contributing to the increased anxiety over protecting know-how.
- The findings reflect challenges that arise as innovation partnerships between the United States and China deepen.
The Development
Trade secrets have overtaken patents and trademarks as the primary intellectual property risk for US firms operating in China. On June 12, 2026, legal media reported these findings from a new survey conducted by the US-China Business Council. The survey highlights growing concerns for US firms operating in the region. Specifically, US companies are expressing increased concern over the safety of non-public proprietary information, signaling a departure from traditional intellectual property anxieties. The findings reflect challenges arising as innovation partnerships between the two nations deepen.
Why It Matters
The displacement of patents and trademarks by trade secrets as the top concern points to a structural shift in cross-border commerce. Patents and trademarks rely on public registration and formal state enforcement mechanisms. Trade secrets, by contrast, derive their value entirely from remaining non-public. When companies report heightened anxiety over proprietary information, it suggests a lack of confidence in the mechanisms available to keep that information secure from unauthorized access or forced disclosure.
Geopolitical pressures and regulatory pressures are specifically identified as factors contributing to this increased concern over protecting know-how. This means the perceived threat extends beyond private corporate espionage or employee theft. Instead, the risk profile includes broader systemic challenges tied to the regulatory environment itself. If administrative frameworks demand the disclosure of technical data for market access or compliance, the fundamental secrecy required to maintain a trade secret is compromised. This shift forces companies to weigh the benefits of market participation against the potential loss of their core competitive advantages.
Who Should Care
For lawyers
Corporate counsel and intellectual property attorneys advising clients on international operations must recalibrate their risk assessments. The focus of compliance and protection strategies needs to expand beyond securing patent portfolios and trademark registrations. Legal teams must draft stricter non-disclosure agreements, audit data localization requirements, and establish tighter access controls for proprietary information shared with foreign partners. Attorneys will need to carefully evaluate local administrative laws to determine if compliance mandates risk exposing a client's unpatented know-how.
For consumers and parties
For US companies and their corporate stakeholders, the survey serves as a warning about the hidden costs of international partnerships. Businesses engaging in joint ventures or manufacturing agreements in China face a higher risk of losing their most valuable, unpatented know-how. This requires companies to carefully evaluate what proprietary data they export and how they secure it during collaborative projects. Shareholders and corporate boards must understand that intellectual property loss can occur entirely outside the patent system.
Legal Background
Historically, foreign companies operating in international markets focused their intellectual property resources on securing patents and trademarks. These registered rights provided a clear, statutory basis for enforcement against counterfeiters and patent infringers. The legal frameworks governing patents require public disclosure of the invention in exchange for a limited period of exclusivity.
In recent years, intellectual property law has increasingly recognized trade secrets as a distinct and highly valuable asset class. Unlike patents, which expire after a set term, trade secrets can theoretically last indefinitely, provided the owner takes reasonable steps to maintain their secrecy. However, protecting these assets relies heavily on contract law, physical security, and the reliability of the local legal system to enforce confidentiality obligations.
When a company operates in a foreign jurisdiction, it must comply with the local administrative and legal rules that govern data security and corporate disclosures. If local laws lack strong protections against the misappropriation of confidential information, or if the state itself mandates the sharing of technical data, the legal mechanisms that typically protect trade secrets in the United States may be insufficient. For more information on this classification and the survey's context, see Ip::Trade-Secrets.
What the Survey Found
The US-China Business Council survey highlights growing concerns for US firms operating in China, specifically regarding the safety of non-public proprietary information. The data shows that trade secrets are now the primary intellectual property risk, surpassing historically dominant concerns like patents and trademarks.
The survey identifies two main drivers for this shift. First, geopolitical pressures are contributing to the increased concern over protecting know-how. As tensions between the nations fluctuate, companies fear their proprietary data may be caught in the crossfire of broader trade disputes. Second, regulatory pressures are cited as a direct reason for rising anxiety regarding intellectual property protection. Companies worry that local compliance mandates or administrative processes might force the disclosure of sensitive technical or business information to local authorities or partners.
These findings reflect the challenges arising as innovation partnerships between the two nations deepen. As US and Chinese firms collaborate more closely on advanced technologies, the volume of shared proprietary data increases, thereby elevating the risk of exposure.
How It May Be Applied
The survey results will likely prompt US companies to restructure their innovation partnerships. As these partnerships deepen, firms may adopt more defensive data-sharing protocols. Companies might choose to keep their most sensitive research and development activities within the United States, exporting only older or less critical technology to foreign markets.
Additionally, the findings may influence how trade negotiators and policymakers approach intellectual property discussions. Future bilateral dialogues may shift focus from patent enforcement and trademark counterfeiting to establishing stronger safeguards against the forced transfer or misappropriation of trade secrets. Companies may also increase their reliance on technological solutions, such as advanced encryption and compartmentalized data access, to supplement legal protections that they deem insufficient.
Shift in Intellectual Property Priorities
| Intellectual Property Type | Previous Status | Current Status According to Survey | Primary Vulnerability |
|---|---|---|---|
| Patents and Trademarks | Primary risk focus | Secondary concern | Counterfeiting and infringement |
| Trade Secrets | Secondary concern | Primary risk focus | Regulatory disclosure and geopolitical pressure |
A Note on Trade Secrets
A trade secret is any valuable business information that is not generally known to the public and is subject to reasonable efforts to keep it hidden. This can include anything from manufacturing techniques and chemical formulas to customer lists and source code. Because there is no government registry for trade secrets, a company loses its exclusive rights the moment the information becomes public. This makes the threat of exposure, whether through a regulatory mandate or a breach of contract, a permanent and severe risk for businesses operating abroad.
This article is general legal information and commentary about legal developments. It is not legal advice, does not address your specific situation, and is not a substitute for advice from a licensed attorney. Reading this article and contacting us through this website do not create an attorney-client relationship.
Sources & authorities
- Ip::Trade-Secrets — source
Further reading
Additional perspectives (a link is not an endorsement):
- World Trademark Review's analysis of the shifting intellectual property risks for American companies in China.
- Intellectual Asset Management's report on trade secrets surpassing patents as the top concern for international firms.
- Further coverage by Intellectual Asset Management detailing the survey results on proprietary information security.