Trade Secrets Play ‘Fundamental Role’: Why international cooperation relies on trade secrets

 Trade Secrets Play ‘Fundamental Role’: Why international cooperation relies on trade secrets

This article is based on a presentation given by Mr Marco Aleman (Director at Patent Law Division, WIPO, Switzerland) at the SCLA’s Global Online Forum on Trade Secrets on 27 November 2020. It was drafted by Hermann Knott and Martin Winkler for the SCLA’s report on the event. For the benefit of our readers, we are now publishing it online for the first time, to help us understand and unite our changing world.

Mr Marco Aleman gave a presentation on trade secrets and innovation. From the perspective of multilateral norms, only a few apply to the issue of trade secrets. One reference exists in the Washington Act (1911) of the Paris Convention of 1883 which sets out certain provisions for protections against unfair competition. But these agreements focused on marketing, branding and source indications. On the other hand, article 39 of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement provides for the protection of undisclosed information. Beyond these provisions, the issue of trade secret protection has been largely neglected in international discussions and there is a need for more attention and analysis in that regard.

The reasons for the recent interest in trade secrets are manyfold. Digitalisation has transformed everything into data. Trade secrets play a fundamental role in all collaborative business relationships. The mobility of the skilled personnel is increasing even at the international level. Finally, the increased vulnerability of information and data. All these reasons also underlie the recent legislative developments in the US, the EU and China.

Common law countries and civil law countries have adopted different legal approaches to the protection of trade secrets. The Legislative Developments in the US (USA Uniform Trade Secrets Act, UTSA Defend Trade Secrets Act, DTSA) have a very positive impact on the holders of trade secrets insofar as the protection of trade secrets is dealt with at the federal level with a long list of remedies. For instance, it addresses whether injunctions are now available, the types of awards that can be granted and the clear delimitation of the District Courts’ competencies in infringement cases.

Hence, coupled with a clear definition of what is misappropriation, holders of trade secrets now have the weapons to protect their information. The EU Directive sets Minimum Standards (EU Member States were required to transpose the EU Directive into national legislation by June 9, 2018) defines what kind of information is protectable: Technical information and business information. By not only defining the scope of protection, but also by setting out limitations, the EU Directive on Trade Secret Protection strikes the balance between the private and public interests involved.

The economic importance of the protection of trade secrets is highlighted by recent studies which show that the use of trade secrets is higher than the use of patents in all types of companies in most economic sectors and in all EU-Member States. Furthermore, the more companies cooperate with others and the more distant cooperating parties are to one another, the more they rely on trade secret protection.

 

Photo by Andrei Sauko on Canva.com

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