TRADE SECRETS workshop I © 2009 Prof. Charles Gielen EU-China Workshop on the Protection of Trade Secrets Shanghai June 2009

RELEVANCE TRADE SECRETS The more knowledge a company generates the more relevant trade secrets protection becomes Newsweek wrote:..we are moving steadily toward a situation in which companies will earn the bulk of their profits not as manufacturers but as titleholders and gatekeepers to fiefdoms of knowledge.

Trade secrets and Paris Convention Art. 1: no mention of trade secrets, but Industrial property means …protection against unfair competition Art. 10 bis Any act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition.

TRADE SECRETS in TRIPs Art. 39 explicitly deals with protection of undisclosed information Art. 34 (3): manufacturing and business secrets should be protected in case of reversal of the burden of proof in infringement of process patents Art. 42: procedures in IP-matters shall provide a means to identify and protect confidential information

TRADE SECRETS in TRIPs Art. 43 (1): possibility for an order to produce evidence, subject to protection of confidential information

DIRECT EFFECT of TRIPs ECJ (14 Dec Assco/Layher) is competent to hear cases concerning interpretation of TRIPs Direct effect? TRIPs: no direct effect under EU law but for issues not regulated by EU law (e.g. protection of trade secrets): up to national law Unfair competition rules re. copying of designs may fall under notion IP in TRIPs But it is up to national law to specify whether such rules qualify as IP I think the protection of trade secrets = IP; see also art. 1(2) TRIPs: For the purposes of this Agreement, the term “intellectual property” refers to all categories of intellectual property that are the subject of Sections 1 through 7 of Part II.

TERMINOLOGY TRIPs Undisclosed information (art. 39) Secret information (art. 39) Manufacturing and business secrets (art. 43, 1) Confidential information (art. 42 and 43)

TERMINOLOGY WIPO Model Provisions on Protection against Unfair Competition (1996): “Secret information” Protection proposed is similar to TRIPs- Treaty

WHAT ARE TRADE SECRETS? Note 6.16 WIPO Model Provisions:..may consist of manufacturing or commercial secrets; it may include production methods, chemical formulae, drawings, prototypes, sales methods, distribution methods, contract forms, business schedules, details of price arrangements, consumer profiles, advertising strategies, lists of suppliers or clients, computer software and databases.

GENERAL PROTECTION TRIPs I will not deal with art. 39 (3) TRIPs: protection of trade secrets in relation to government applying for marketing of pharmaceutical or agricultural chemical products in anti-trust cases

GENERAL PROTECTION in TRIPs Art 39 is strongly inspired by the Uniform Trade Secrets Act in the US To prevent information from being disclosed to, acquired by, or used by others in a manner contrary to honest practices Protection is given in the course of ensuring effective protection against unfair competition in Art. 10bis Paris Convention

GENERAL PROTECTION in TRIPs A manner contrary to honest practices: shall mean at least practices such as breach of contract, breach of confidence and inducement to breach, and includes the acquisition of undisclosed information by third parties who knew, or were grossly negligent in failing to know, that such practices were involved in the acquisition

GENERAL PROTECTION in TRIPs Protection given to persons having the information lawfully within their control

PROTECTION CONDITIONS Protection of information that: is secret In the sense that it is not, as a body or in the precise configuration and assembly of its components generally known among or readily available to persons within the circles that normally deal with the kind of information in question and has commercial value because it is secret

PROTECTION CONDITIONS Protection of information that has been subject to reasonable steps, under the circumstances, to keep it secret USM Corp./Marson Fastener Corp. [1979]

PATENT INFRINGEMENT and SECRECY Art. 34: possibility of reversal of burden of proof for infringement of process patents two systems if the product is new likelihood that product is made with the process but the owner notwithstanding reasonable efforts was not able to determine the process used

PATENT INFRINGEMENT and SECRECY Art. 34(3): legitimate interests of the defendant in protecting secrecy shall be taken into account. How? elimination of prima facie presumption protective orders; investigation by court experts

IP PROCEDURES and SECRECY Art. 42: in the context of fair and equitable procedures in enforcing IP-rights: the procedure shall provide a means to identify and protect confidential information how? protective orders: (US Uniform Trade Secrets Act): in camera hearings, sealing the records of an action, and ordering any person involved in the litigation not to disclose an alleged trade secret without prior court approval

PROOF and SECRECY Art. 43(1): where a party has presented reasonably available evidence sufficient to support its claim and has specified evidence which lies in the control of the other party the court may order that this evidence be produced subject to conditions which ensure protection of trade secrets

A LOCK or GOOD LAW? TRIPs gives good rules both in general terms and for procedures Given the lack of direct effect of TRIPs, implementation is advisable

THANKS!