The Current Situation and Reflections on the Protection of Trade

Secrets in Traditional Chinese Medicine Prescriptions

Songran Yang

School of Politics and Law & School of Intellectual Property, Sichuan University of Arts and Science,

Dazhou, Sichuan, 635002, China

Keywords: Traditional Chinese Medicine Prescription, Trade Secret, Traditional Knowledge.

Abstract: Traditional knowledge of Chinese medicine is the outcome of the Chinese nation’s struggle against diseases

and survival in nature over several thousand years. It embodies the wisdom of countless ancient medicine

practitioners. This thesis will conduct an overview of traditional Chinese medicine prescriptions as the object,

analyzing their uniqueness and the current status of legal protection, as well as anylzing the current protection

status of existing patent system for traditional Chinese medicine prescriptions, analyzing the protection

methods, protection scope and identifying the shortcomings. This study reveals that the protection of trade

secret is highly applicable to the protection of traditional Chinese medicine prescriptions. Based on the

practice of protection traditional medicine in foreign counties, it can be concluded that the protection of trade

secrets for traditional Chinese medicine prescriptions can be achieved through the issuance of targeted laws

and regulations as well as the establishment of databases.

1 INTRODUCTION

As an outstanding traditional culture of the Chinese

nation, traditional Chinese medicine has enabled the

Chinese people to overcome various diseases over

thousands of years and has become an indispensable

part of the development of social health and medicine

value is immeasurable. As an important part of

traditional Chinese medicine knowledge, Chinese

herbal prescriptions have also drawn increasing

attention and consensus from people.

From the ancient period when Shennong tasted

hundreds of herbs to the medicinal prescriptions and

pharmacological knowledge recorded in

Compendium of Materia Medica, and even the good

folk remedies, these have been passed down to this

day and are still utilized by the Chinese people.

However, with the advent of economic globalization,

Western developed countries, taking advantage of the

imperfect protection of intellectual property rights for

traditional Chinese medicine in China, maliciously

exploited their technological and financial

advantages to re-utilize the prescriptions of

traditional Chinese medicine in a second round, and

then maliciously applied for patent protection based

on it, thus reselling them domesticially to obtain huge

profits. They used the “biological” method to obtain

huge benefits. For example, Japan has registered a

large number of patents and trademarks of classic

prescriptions of traditional Chinese medicine, and

changed its name to “Save Heart Pill” after imitating

“Lix God Pill”. South Korea imitated China’s

“Niuhuang Qingxin Pill” and renamed it “Niuhuang

Qingxin Liquid”. India imitates the traditional

Chinese medicine “Yujin” into “Curcumin”. These

have all caused the loss of traditional Chinese

medicine prescription resources, reflecting the loss of

overseas discounts and frequent incidents of trade

secrets of traditional Chinese medicine. This not only

causes losses and intellectual property theft to the

creators and owners of traditional Chinese medicine,

but also shows that there are crises and challenges in

the healthy development of traditional Chinese

medicine in China.

At present, China attaches more and more

importance to the intellectual property of traditional

Chinese medicine. The State Intellectual Property

Office has included traditional Chinese medicine in

the key protection areas, and revised the Regulations

on the Protection of Traditional Chinese Medicine

Varieties in 2018 to promote the establishment of a

traditional database of traditional Chinese medicine.

In 2023, China issued the Opinions on the

Yang, S.

The Current Situation and Reﬂections on the Protection of Trade Secrets in Traditional Chinese Medicine Prescriptions.

DOI: 10.5220/0014372800004859

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 1st International Conference on Politics, Law, and Social Science (ICPLSS 2025), pages 251-256

ISBN: 978-989-758-785-6

251

Examination of Key Information of Ancient Classic

Famous Prescriptions, which simplified the approval

process of classic famous formula preparations and

reflected the intellectual property of Chinese

medicine prescriptions.

Based on this, this article is a research summary.

Western patent system, traditional Chinese medicine

prescriptions face difficulties such as difficulty to be

effectively protected and low patent pass rate. Thus,

it leads to thinking about the applicability of the

protection of traditional Chinese medicine

prescriptions with trade secrets as an entry point.

2 THE CURRENT SITUATION OF

THE PROTECTION OF TRADE

SECRETS OF TRADITIONAL

CHINESE MEDICINE

PRESCRIPTIONS

2.1 Legislative Protection Research

Worldwide, the patent system has become the

mainstream choice to protect pharmaceutical

products and technologies. In China’s patent law,

provisions are borrowed from the Western patent

system. However, due to the differences in cultural

attributes, Western medicine belong to two distinct

theoretical systems. Essentially, their differences

represent a dialogue between two civilizations.

Traditional Chinese medicine embodies the wisdom

of agricultural civilization, emphasizing harmony

between humans and nature, while Western medicine

reflects the scientific rationality of industrial

civilization, aiming for precise control over diseases.

In some single laws and regulations in China, there

are already provisions for the protection of trade

secrets. For instance, the current effective Anti-

Unfair Competition Law came into effect on April 23,

2019, and its main provisions concerning trade

secrets are Article 1, Article 2, Article 9, and Article

32. Amomg them, Article 1 and Article 2 clearly state

the legislative purpose and basic principles of the

Anti-Unfair Competition Law, such as “stopping

unfair competition behaviors” and “abiding by laws

and commercial ethics”, which reflect China’s

passive legislative protection of trade secrets. This

provides a feasible legal interpretation for the urgent

need to establish an active protection model for trade

secrets through a specialized law. Therefore, it is

suggested that laws and regulations be improved to

clearly define the scope of protection for trade secrets

in traditional Chinese medicine, increase the severity

of penalties for unfair competition and infringement,

and establish a collaborative medicine for the

protection of trade secrets in traditional Chinese

medicine (Xie and Ma,2021). Article 501 of the Civil

Code stipulates, “During the process of concluding a

contract, if a party becomes aware of any trade secrets

or other information that should be kept confidential,

such information shall not be disclosed or improper

utilization of such trade secrets or information causes

damage to the other party, improperly utilized such

information shall bear the liability for compensation.”

Article 43 of the Traditional Chinese Medicine Law

stipulates The state shall provide special protection

for traditional Chinese medicine prescriptions that

have been legally recognized as state secrets

regarding their composition and production

processes. Among them, the Labor Law and the

Contract Law also stipulate confidentiality

obligations and non-competition restrictions for trade

secrets, protecting trade secrets through

confidentiality obligations and prohibitive

provisions.

2.2 Complementary Between Business

Secrets and State Secrets

There is a connection between business secrets and

state secrets. To some extent, the combination of the

two can complement each other, and both can protect

the legitimate interests of the right holders. The Law

on State Secrets stipulates: concern national security

and interests, which are determined in accordance

with legal procedures and are only known to a certain

period of time. Among them, the protection of secrets

matters in science and technology includes major

traditional Chinese medicine formulas or

prescriptions that involve national security. This

indicates that the protection of state secrets is in line

with the protection of traditional Chinese medicine.

For instance, the prescriptions and prescriptions of

traditional Chinese medicine such as YunnanBaiyao,

An Gong Niu Huang are recognized as state secrets

and are subject to the provisions of the State Secrets

Law and Article 43 of the Traditional Chinese

Medicine Law, prohibiting any illegal disclosure.

This shows that sometimes the prescriptions of

traditional Chinese medicine are also protected as

state secrets.

ICPLSS 2025 - International Conference on Politics, Law, and Social Science

252

3 THE DILEMMA OF

PROTECTING TRADE

SECRETS IN TRADITIONAL

CHINESE MEDICINE

INDUSTRY

3.1 The Risk of Leakage of Traditional

Chinese Medicine Is High

During the long history of over a thousand years of

development of traditional Chinese medicine in our

country, the traditional means adopted by relevant

medical practitioners to protect themselves from

others’ infringement of their own research

prescriptions or other therapeutic methods is through

confidentiality. Among these confidentiality

measures, the most typical one is the inheritance of

secret prescriptions. Due to historical limitations,

such confidentiality measures are rather fragile and

the traditional ones are incomplete. This has led to a

situation where, in the era of information sharing, the

awareness of confidentiality is weak and commercial

secrets are frequently leaked, which has become a

major pain point in the traditional Chinese medicine

industry. Furthermore, due to the weak awareness of

confidentiality among enterprise employees and the

absence of a strict confidentiality system, the

enterprise is facing the crisis of information leakage.

Once an employee who has access to the enterprise’s

trade secrets voluntarily quits his job or is poached by

another company, the departing employee may betray

the enterprise’s trade secrets for personal gain. If the

enterprise has not signed any non-compete or

confidentiality agreements, it will be even more

difficult to fight against the infringer. Even among the

current employees, some may take risks and disclose

the core secrets of the enterprise to the outside world

in the face of huge benefits. The reason for this is that

there is another risk worth nothing: The ownership of

trade secrets is a kind of non-exclusive exclusivity.

That is to say, it is not prohibited for others to obtain

the same technology through legal means. For

instance, others may conduct reverse research by

purchasing prescriptions-based traditional Chinese

medicine products. They might even attempt to crack

or reprocess these products to steal them, and then

apply for patents maliciously by registering them

under false names to obtain their own patent rights.

3.2 The Way of Inheritance of

Traditional Chinese Medicine Itself

Is Incompatible with the

Requirements of Protecting

Commercial Secrets

Although trade secrets have low risks due to their

non-disclosure nature and lack of time and

geographical restrictions, they can still be leaked due

to the failure of contractual protection measures, and

there is a lack of mandatory protection by relevant

countries. This is extremely unfavorable for the

protection of trade secrets of traditional Chinese

medicine (Qiang, 2009). Regarding the protection of

the secrets of traditional Chinese medicine, the

majority of traditional protection practices are

confidential. As a result, the vast majority of

prescriptions in traditional Chinese medicine are

considered as family heirloom secrets. They are

passed down orally from master to apprentice,

without any physical carriers, nor are these complete

systems and standards. This not only makes the

collection and organizations more difficult, but also

makes it hard for traditional Chinese medicine

prescriptions to achieve the same level of precision

and clarity as Western medicine prescriptions in

terms of intellectual property protection and patent

protection. The patent protection scope is not clear,

and the technical features are not easy to be classified

(Huang and Wei, 2015). For example, traditional

Chinese medicine prescriptions contain a lot of

flavoured medicines. The protection of such

prescriptions not only involves the prescriptions

drugs, dosage and cooking methods, but also involves

factors such as drug varieties and drug preparation

methods. However, it is difficult for analysis and

testing technology at this stage to determine the

infringement of the intellectual property rights of

traditional Chinese medicine prescriptions. This will

prevent others from providing effective evidence of

infringement, and the charges will be invalid, which

also costs the protection of trade secrets. In addition,

a modern traditional Chinese medicine costs

4450yuan before applying for invention patent

protection. After authorisation, the free payment will

increase every year. The validity period of the

invention patent is 20 years, and a total of 74300 yuan

is required. If it is overdue, the annual fee for a

modern traditional Chinese medicine invention patent

will cost nearly 100000 yuan in total (Yu and Yao,

2024). This kind of expenditure cannot be ignored

either. This reflects the incompatibility between the

protection of traditional Chinese medicine and

modern intellectual property law of the West.

The Current Situation and Reﬂections on the Protection of Trade Secrets in Traditional Chinese Medicine Prescriptions

253

Traditional Chinese medicine is based on collision

with the Western legal system has also increased the

difficulty of traditional Chinese medicine in

protecting trade secrets.

3.3 A Comparative Study on the

Protection of Trade Secrets and

Intellectual Property Rights of

Traditional Chinese Medicine

The two protection methods complement each other

and are inseparable. Intellectual property protection is

further divided into patent, trademark and copyright

protection. Take patents as an example, in the method

of intellectual property protection of traditional

Chinese medicine, because the patent protection of

traditional Chinese medicine has been applied earlier,

with strong protection, and the advantages of

exclusivity, it has a wider applicability than other

traditional Chinese medicine protection methods

(Bai, 2020). However, it is worth noting that due to

the special nature of the production process of

traditional Chinese medicine itself, it is often difficult

to meet the requirements of the “three sexes” of the

patent. Among them, the performance of

prescriptions is particularly obvious. Traditional

Chinese medicine prescriptions are often made of a

variety of drugs, and several processes, which makes

it difficult for the final product of the drug to analyse

its specific ingredients with modern technology,

which also leads to the difficulty of determining the

facts of infringement. This lead to the loss of the

exclusive rights of the right holder of trade secrets.

This reflects from the side that when the trade secrets

of traditional Chinese medicine are infringed, it is

difficult for others to identify and identify the

infringement of trade secrets, so it is difficult to

effectively protect the trade secrets of traditional

Chinese medicine.

4 THE WAY OUT OF

PROTECTION OF TRADE

SECRETS OF TRADITIONAL

CHINESE

MEDICINE

The modern intellectual property system is a

protection system based on the development of

Western civilization and Western science and

technology, while traditional Chinese medicine is a

knowledge and technology system based on the

development of Eastern civilization, especially

Chinese civilization, and traditional Chinese

knowledge. The knowledge system is fundamentally

different from the Western knowledge technology

system. This characteristic of traditional Chinese

medicine has brought great troubles and constraints to

the protection of intellectual property rights of

traditional Chinese medicine based on Western

science and civilization (Liu, 2019). Therefore, it is

particularly urgent to explore a path suitable for the

protection of the trade secrets of traditional Chinese

medicine. The technological innovation and

applications of Chinese and Western medicine

enterprises and traditional Chinese medicine can be

taken as an entry point.

4.1 Self-Protection of Traditional

Chinese Medicine Enterprises

The spirit of contract is applied in trade secrets.

According to the information, from 2018 to 2020,

China’s civil cases of infringement of trade secrets

increased from 403 in 2018 to 599 in 2020. Chinese

procuratorial organs have transferred and prosecuted

a total of 98 criminal cases of infringement of trade

secrets involving 196 people (Li, 2021). This can be

seen that the number of criminal cases in the first

instance of China’s infringement of trade secrets is

increasing year by year. It is particularly urgent for

traditional Chinese medicine enterprises to strengthen

self-protection. Relevant practitioners of traditional

Chinese medicine need to start from themselves,

strengthen personnel risk control, and strengthen the

information protection of pharmaceutical enterprises.

They can also protect the core secrets of traditional

Chinese medicine or production methods by

formulating confidentiality regulations and signing

confidentiality agreements with R&D personnel, so

as to improve the competitiveness of Chinese

pharmaceutical enterprises. Among them, the spirit of

the contract can play a prominent role. By signing a

confidentiality agreement, it can remind the

obligations of relevant stakeholders, which can play a

warning role. The confidentiality agreement is also

the embodiment of the evidence awareness of

traditional Chinese medicine enterprises, which

allows traditional Chinese medicine enterprises to

make sufficient preparation in advance when they are

subjected to lawsuits. This can play a role through

evidence when enterprises suffer from trade secret

infringement disputes.

Learn from the advanced trade secret protection

measures of foreign enterprises. The products of the

famous Coca-Cola company sell well all over the

world, so it pays special attention to the protection of

ICPLSS 2025 - International Conference on Politics, Law, and Social Science

254

the formula. Its strategy integrates legal means,

physical isolation and brand marketing. Among them,

the separation and dispersion of the formula and the

protection of traditional Chinese medicine

prescriptions can be learned from it. Specifically, the

complete formula is divided into multiple segments,

and the raw material are provided and produced by

different suppliers, and finally mixed proportionally

by the Coca-Cola factory. The successful protection

of Coca-cola’s formula proves that the value of trade

secrets lies not only in the information itself, but also

in its unrepeatable management ecology. In addition,

IBM, for example, the company has set up a trade

secret contact registration management method, that

is to say, the company data that employees with

different authority can view is also different. Through

the division of the security level of the database, the

level of information that everyone comes into contact

is also different. This kind of data hierarchical

management method is worth learning from

traditional Chinese medicine enterprises. It can also

be protected through a combination strategy with

patents, which is connected with the trade secret laws

of various countries. Its protection logic is the core

competitiveness of trade secret protection that cannot

be reverse engineered. IBM’s protection practice

shows that the real trade secret defense is the trinity

of legal deterrence, technical barriers, and cultural

penetration.

4.2 Strengthen the Technology

Innovation and Application of

Traditional Chinese Medicine

Compared with the complex chemical composition of

Western medicine, traditional Chinese medicine is

based on natural medicine and has a relatively single

composition. It can be easily cracked by using

modern science and technology. This is also the main

reason why traditional Chinese medicine knowledge

has been widely imitated abroad in recent years.

Specifically, the traditional Chinese medicine

industry should adhere to the original thinking of

traditional Chinese medicine, adhere to and carry

forward the characteristic advantages of traditional

Chinese medicine, and systematic conduct biological

research of traditional Chinese medicine (Zhu, 2018).

In terms of the protection methods for traditional

Chinese medicine prescriptions data, we can also

draw on the field of data privacy protection

technology. For instance, a privacy protection method

for traditional Chinese medicine prescriptions data

based on K-anonymity (Haust, 2023). Strengthen the

optimization ability of protection traditional Chinese

medicine prescriptions as trade secrets through multi-

dimensional technological innovation and the

introduction of new methods. At the same time,

adhere to the combination of traditional Chinese

medicine theory and innovative practice, give full

play to the scientific knowledge contained in

traditional Chinese medicine, and gradually enhance

the protection of trade secrets of traditional Chinese

medicine prescriptions.

Empowering with local culture and promoting the

modernization of traditional Chinese medicine

technology. The Western intellectual property system

and the protection of traditional Chinese medicine

prescriptions are bound to collide. As a traditional

culture of the Chinese nation, how traditional Chinese

medicine can be integrated with Western culture and

promote technological modernization is particularly

important. Based on the local culture, with the aim of

fully applying scientific and technological

achievements to modernization construction, by

adopting the strategies of building an open and

innovative ecosystem concentrating efforts through

the “national system” to take key issues, conducting

interdisciplinary research, and promoting

collaborative innovation among industry, academia

and research institutions, and leveraging the original

advantages of traditional Chinese medicine as the

base point of scientific and technological innovation,

and collaborative innovation as the inevitable path for

the modernization of traditional Chinese medicine

(Su, Yuan, Zhang et al, 2024). Technological

innovation and the utilization of local cultural

advantages can mitigate the impact of the Western

intellectual property system, thereby accelerating the

modernization process of traditional Chinese

medicine.

4.3 Synergistic Protection of Trade

Secrets and Other Institutional

Measures

Integrate with the database system. Establish a

specialized database for traditional knowledge of

Chinese medicine prescriptions, thereby achieving

efficient management and protec. For instance, India

has established a huge database called the Digital

Library of Traditional Knowledge, which details 54

steps of official traditional herbal medicine works,

150000 kinds of traditional medicines, and over 1500

yoga practices with a history of 5000 years. In view

of this, China can conduct extensive collection and

classification of traditional knowledge of various

Chinese herbal prescriptions and systematically

record them in specialized databases. For China, a

The Current Situation and Reﬂections on the Protection of Trade Secrets in Traditional Chinese Medicine Prescriptions

255

large number of Chinese herbal prescriptions are still

in the non-public domain, so the establishment of our

databases should also be considered in light of

national conditions. During the patent search and

review process, measures for confidentiality should

also be taken into account.

5 CONCLUSION

Nowadays, the majority of people advocate the use of

the intellectual property rights system to protect

traditional knowledge such as Chinese medicine

prescriptions. However, the intellectual property

rights system originated from the West. Due to the

differences in cultural attributes between Chinese

medicine and Western systems, the protection process

of this system has encountered conflicts. Especially

in the protection of Chinese medicine prescriptions,

there has been a significant in adaptability. At

present, a new type of intellectual property-trade

secrets, has emerged. This concept can be well

integrated with the protection of traditional Chinese

medicine prescriptions. Thus, we can explore the path

for the interconnection between the protection of

traditional Chinese medicine prescriptions and trade

secrets. Therefore, this paper conducts an overview

and reflection on the protection of the commercial

secrets of traditional Chinese medicine prescriptions

from the perspective of the level of protection.

Starting from the differentiations of cultural

attributes, it analyzes the deficiencies of the exactly

patent system in protection traditional Chinese

medicine prescriptions, and then leads to the path of

protecting traditional Chinese medicine prescriptions

through commercial secrets. Thus, it explores the

applicability of commercial secret protection for

traditional Chinese medicine prescriptions.

Traditional Chinese medicine prescriptions are

different from other intellectual property objects. Due

to their own complexity and unique cultural

attributes, a single protection method is insufficient to

provide comprehensive protection. Other systems can

be supplemented to achieve coordinated protection,

which might yield better results. It should be

emphasized that in this article, the incompatibility

between the Western patent system and the protection

of traditional Chinese medicine prescriptions is not a

denial or confrontation of the former. Instead, it aims

to coordinate the protection of trade secrets of

traditional Chinese medicine prescriptions with other

protection methods, thereby exploring a

comprehensive and effective protection path.

Finally, it is hoped that through the dried research

and suggestion presented in this article, it can play a

certain role in exploring the protection of commercial

secrets in traditional Chinese medicine prescriptions.

REFERENCES

Bai, Y. 2020. The Current Situation and Countermeasures

of Intellectual Property Protection for Traditional

Chinese Medicine. Law and Society, (30): 185-187.

Henan University of Science and Technology. 2023. A

privacy protection method for traditional Chinese

medicine prescription data based on K-anonymity.

Huang, J. S., & Wei, X. C. 2015. Thoughts on the

Difficulties and Countermeasures of Intellectual

Property Protection for Traditional Chinese Medicine

Prescriptions. Chinese Ethnic and Folk Medicine,

24(19): 145-148.

Li, W. Z. 2021. Analysis of Enterprise Business Secret

Risks and Construction of Related Systems.

Liu, C. Q. 2019. The Issues and Countermeasures

Concerning the Protection of Intellectual Property

Rights of Traditional Chinese Medicine in China.

Chinese Journal of Traditional Chinese Medicine,

34(11): 5011-5013.

Qiang, M. Y. 2009. A Preliminary Exploration on the

Protection of Commercial Secrets of Traditional

Chinese Medicine and Its Industrial Countermeasures.

Research on Productivity, (24): 158-160.

Su, J. Y., Yuan, M., Zhang, T. L., et al. 2024. Thoughts on

the Connotation and Strategic Pathways of

Modernization of Traditional Chinese Medicine. World

Modernization of Science and Technology-Traditional

Chinese Medicine, 26(05): 1125-113.

Xie, W., & Ma, Z. G. 2021. Research on the Synergy of

Protection for Traditional Chinese Medicine Trade

Secrets. China Soft Science, (09): 14-24

Yu, F. L., & Yao, M. Y. 2024. On the Paradox and

Harmonization of Modern Chinese Medicine Trade

Secret Protection. Technology and Law, (03): 20-26.

Zhu, L. P. 2018. On the Protection of Trade Secrets of

Traditional Chinese Medicine. Medicine and Society,

31(09): 45-48.

ICPLSS 2025 - International Conference on Politics, Law, and Social Science

256