China SAMR Rules AI Prompts Qualify as Trade Secrets

On August 20, 2026, China’s State Administration for Market Regulation published six typical cases on trade secret infringement enforcement. One case involved an AI large-model system where prompts, review rules, and annotation specifications were held to independently constitute trade secrets.

The matter arose from a former senior algorithm expert at a Hangzhou AI company who, while employed, established a competing firm and transferred proprietary materials including prompt templates to develop a similar product. The Hangzhou Market Regulation Bureau found the materials met the criteria of non-public status, commercial value, and reasonable confidentiality measures. It ordered cessation of the conduct and imposed a fine of RMB 350,000.

SAMR described the case as the first national-level enforcement action addressing trade secret protection for a vertical-domain AI large model. The decision underscores that natural-language technical schemes and operational rules can receive protection separate from source code under the Anti-Unfair Competition Law.

Administrative enforcement by market regulation authorities operates alongside civil and criminal avenues but does not award damages to rights holders.

Sources: https://www.chinaiplawupdate.com/2026/08/chinas-samr-finds-that-ai-prompts-and-related-materials-can-be-protected-as-trade-secrets/ https://www.samr.gov.cn/xw/zj/art/2026/art_45ceaace99a7454d97cd42f70ed404d5.html