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Lien Verbauwhede
Consultant, SMEs Division
World Intellectual Property Organization (WIPO)
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This Presentation
PART 1 - Outline
Definition
Legal requirements
Legal rights
Enforcement
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PART 1
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Definition:
What are trade secrets?
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Cotton Dyeing Technique
Financial Information
Trade Secret
Commercial Information
Negative Information
in some laws
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Technical and scientific information:
Product information
technical composition of a product (e.g. paint)
technical data about product performance
product design information
Manufacture information
manufacturing methods and processes (e.g. weaving technique,
technology for new fiber having significant tensile properties)
production costs, refinery processes, raw materials
specialized machinery
Computer codes
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Commercial information:
Customer list
Business plan
Marketing strategy
Supplier arrangements
Customer buying preferences and
requirements
Consumer profiles
Sales methods 10
Financial information:
Pricing information
Price lists
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Negative information:
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Legal requirements:
What can be protected as a
trade secret?
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Three essential legal requirements:
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1. The information must be secret
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2. It must have commercial value because
its secret
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3. Owner must have taken reasonable
steps to keep it secret
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Legal rights:
Only protection against improperly
acquiring, disclosing or using:
People who are automatically bound by duty
of confidentiality (incl. employees)
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Some people cannot be stopped
from using information under
trade secret law:
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Reverse Engineering :
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Examples
Lycra
Bikini
Zipper
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Enforcement:
What can you do if someone
steals or improperly
discloses your trade secret?
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Trade secret protection may be based on...
Contract law
When there is an agreement to protect the TS
NDA/CA
Where a confidential relationship exists
Attorney, employee
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Criminal laws
e.g. for an employee to steal trade secrets from a
company
theft, electronic espionage, invasion of privacy, etc.
circumvention of technical protection systems
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Remedies
2. Monetary damages
actual damages caused as a result of the misuse (lost profits)
amount by which defendant unjustly benefited from the
misappropriation (unjust enrichment)
3. Seizure order
can be obtained in civil actions to search the defendant's
premises in order to obtain the evidence to establish the theft of
trade secrets at trial
4. Precautionary impoundment
of the articles that include misused trade secrets, or the products
based on the misuse
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To establish violation, the owner
must be able to show :
BUSINESS STRATEGIES
TO HANDLE & PROTECT
TRADE SECRETS
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The Story of the Bridgport Loom...
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The story of NRB Textiles &
Johnston Industries
Corporate spies
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Loss of trade secrets -
a growing problem (3)
Ignorance
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With sufficient effort or through illegal acts,
competitors can usually obtain your trade secrets.
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What can be done?
10 basic protection
strategies
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1. Identify trade secrets
Considerations in determining
whether information is a TS:
Is it known outside the company?
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Prioritize:
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2. Develop a protection policy
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3. Educate employees
New employees :
Brief on protection expectations early
NDA/NCA/non-solicitation clauses
Obligations towards former employer!
Departing employees :
Exit interview, letter to new employer, treat
fairly & compensate reasonably for patent
work, further limit access to data
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Educate and train:
Copy of policy, intranet, periodic training & audit,
etc. Make known that disclosure of a TS may
result in termination and/or legal action
Clear communication + repetition
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4. Restrict access
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WARNING:
This document contains trade
secret information of Lien
Verbauwhede. Unauthorized
disclosure is strictly prohibited
and may result in serious legal
consequences.
6. Physically isolate and protect
Surveillance of depository/company
premises
guards, surveillance cameras
Shredding
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7. Maintain computer secrecy
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10. Unsolicited submissions
Unsolicited suggestions, inventions, ideas
Beware, esp. if relate to ideas/inventions that
your company is presently developing
Often: claim that unsolicited information was
stolen
PROTECTING INVENTIONS:
TRADE SECRETS
OR PATENTS?
skip
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Introduction
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Choice between patent protection and
trade secret protection is a
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Legal Considerations
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Trade Secrets Patents
no disclosure disclosure
- but: practical need to disclose - publication 18m after filing
- if leak out: TS lost - if P not allowed: no TS
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Trade Secrets Patents
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Business and Marketplace
Considerations
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1. Market life of the subject matter
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2. Difficulty of maintaining the
subject matter secret
Difficult/expensive to do RE?
Secret manufacturing method or formula difficult TS
Secret embodied in product easy (e.g. raw material) P
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Example no. 1
Decades ago, Coca-Cola decided to
keep its soft drink formula a secret
The formula is only know to a few
people within the company
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In the past, you could not buy Coca-
Cola in India, because Indian law
required that trade secret information
be disclosed
Secret technique
for jeans washing
Secret textile
weaving techniques
for saris
Content of dye
mixtures
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Example no. 3
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4. Likelihood of subject matter
being independently developed
Complexity of invention
Source:
http://www.corporatelogo.com/articles/031feat3.html 66
Potential long market life
Potential many licensees
Would be difficult to keep secret
many licensees
risk for reverse engineering
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Only legal protection against dishonest
acquisition/disclosure/use
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Thank You!
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