Trade secrets Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Do-it-yourself form of IP What are trade secrets? Do-it-yourself form of IP Idea: By keeping valuable information secret, you can prevent competitors from learning about and using it and thereby enjoy a competitive advantage in the marketplace. Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

This trade secret is a form of IP Thus these IP’s look like Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Trade secret is any valuable information or secret for a business which provide competative edge. Example : For a Car company, technology of Car is a trade secret which has to be hidden from its competitors. Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

General principles: Information that has commercial value and that has been scrupulously kept confidential will be considered a trade secret (TS). Owner will be entitled to court relief against those who have stolen or divulged it in an illegal manner. Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Provides competitive advantage Potential to make money TRADE SECRET Provides competitive advantage Potential to make money Kept confidential Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

TRADE SECRET Technical & scientific information Financial information Negative information Commercial information Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Typical examples in the software industry Computer technology hardware + software (esp. source code) whether < patent or copyright protection algorithms, formulas, data flow charts, specific procedures that are implemented in the software or website Software design documents Technical data about product performance Software development agreements Pending patent applications Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Business plans & strategies New product names Financial projections Marketing plans, unpublished promotional material Cost & pricing information Sales data Customer lists Info re: new business opportunities Personnel performance Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

When do you have legal protection? WHAT MAKES SOMETHING A TRADE SECRET ? When do you have legal protection? Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Three essential legal requirements: 1. The information must be secret 2. It must have commercial value because it’s secret 3. Owner must have taken reasonable steps to keep it secret Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

1. Secret “not generally known among or easily accessible to persons within the circles that normally deal with this kind of information” What is ‘generally known’ in the software industry? matters of common knowledge information you find at library, online database, trade journals, patent information, etc price list on website graphics & object code of software application you sell off-the-shelf Not required that be known only by one person e.g. based on supplier relationship, joint development agreement, due diligence investigation, etc. If you license software which has limited distribution  possible to protect object code by contractual means Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

2. Commercial value Must confer some economic benefit on the holder This benefit must derive specifically from the fact that it is not generally known (not just from the value of the information itself) How to demonstrate: benefits derived from use costs of developing the TS licensing offers; etc. actual or potential Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

3. Reasonable steps Under most TS regimes, you cannot have a TS unless you have taken reasonable precautions to keep the information confidential ‘Reasonable’  case by case reasonable security procedures Non-disclosure agreements (NDA) such that the information could be obtained by others only through improper means Importance of proper TS management program Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

COURT RELIEF if: TS + “THEFT” Courts will only grant relief if someone has improperly acquired, disclosed or used the information Only theft if wrongful ! Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

What is typically considered wrongful? 1. Duty of trust implied or imposed by law e.g., employees, directors, lawyers 2. Confidentiality agreement or NDA e.g., employees, suppliers, consultants, financial advisors 3. Industrial espionage, theft, bribery, hacking Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

What is lawful?  Discovery of the secret by fair and honest means 1. Independent creation without using illegal means or violating agreements or law  patent TS protection provides no exclusivity ! Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

What is lawful? 2. Reverse engineering Common practice among software companies: studying competitors' products to make software that can interoperate with the software being studied to make a product that will compete with it E.g. decompile object code to reveal its structure and figure out the interface specifications for interoperability purposes E.g. look at a program's input and outputs. Solution: contractually forbid reverse engineering (in software license agreement) Technological protection measures Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Trade Secret Policies & Law Formula Pattern Compilation Program Device Method Technique Process Uniform Trade Secrets Act (UTSA) Information Derives independent economic value from secrecy Subject of reasonable efforts to maintain secrecy Contrast with patent (“patent” means “open”) Unauthorized use of trade secret can lead to civil tort for misappropriation Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

UTSA Remedies for Misappropriation Damages ($) Amount needed to compensate the trade secret holder for losses Amount of unjust enrichment earned by unlawful use or disclosure Injunctions Preventing use Including “threatened misappropriation” To obtain preliminary injunction, must prove: Irreparable harm Strong likelihood of success of winning if case goes to trial Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

International Trade Secret Protection TRIPS agreement Agreement on Trade-Related Aspects of Intellectual Property Rights Members of the World Trade Organization (WTO) must protect “undisclosed information” Does not use trade secret term WTO members required to enforce their own trade secret laws with remedies Issues Enforcing contractual obligations / confidentiality agreements Determining damages Durational periods – variation in time limits for maintaining secrecy of info Need to exercise caution with trade secrets overseas Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

departing or disgruntled employees intentional (malicious) 80% of trade secret loss < employees, contractors, trusted insiders! departing or disgruntled employees intentional (malicious) inevitable (knowledge acquired) by ignorance Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

1. Identify trade secrets Factors to determine if information is a TS Is it known outside the company? Is it widely known by employees and others involved within the company? Have measures been taken to guard its secrecy? What is the value of the information for your company? What is the potential value for your competitors? How much effort/money spent in developing it? How difficult would it be for others to acquire, collect of duplicate it? Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

2. Develop a protection policy Advantages of a written policy: Clarity (how to identify and protect) How to reveal (in-house or to outsiders) Demonstrates commitment to protection  important in litigation Educate and train: Clear communication and repetition Copy of policy, intranet, periodic training & audit, etc. Make known that disclosure of a TS may result in termination and/or legal action Monitor compliance, prosecute violators Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

to only those persons having a 3. Restrict Access to only those persons having a need to know the information  computer system should limit each employee’s access to data actually utilized or needed for a transaction Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

4. Mark Document Help employees recognize TS  prevents inadvertent disclosure Uniform system of marking documents paper based electronic (e.g. ‘confidential’ button on standard email screen) Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

5. Physically isolate and protect Separate locked depository Authorization Access control log of access: person, document reviewed biometric palm readers Surveillance of depository/company premises guards, surveillance cameras Shredding Oversight; audit trail Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

6. Maintain computer security Secure online transactions, intranet, website Password; access control Mark confidential or secret (legend pop, or before and after sensitive information) Physically isolate and lock: computer tapes, discs, other storage media No external drives and USB ports Monitor remote access to servers Firewalls; anti-virus software; encryption Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

SALE LICENSE Most TS sales occur as part of the sale of the business e.g. in combination with patent license e.g. software license for highly specialized program Advantage: additional revenues Disadvantage: risk of disclosure (potential loss) In some countries, restrictions Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

TS Licensing Definition of the secret subject matter Permitted use what is to be kept confidential? marked as such or broad clause? Permitted use disclosure to employees, professional advisors? modification of technology? Precautions to be taken Exclusions Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

TS Licensing Duration of secrecy obligations Royalties Sanctions Should not be subject to alternative dispute resolution Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

TS protection may be based on... 1. Contract law When there is an agreement to protect the TS NDA/CA anti-reverse engineering clause Where a confidential relationship exists attorney, employee, independent contractors 2. Principle of tort / unfair competition Misappropriation by competitors who have no contractual relationship theft, espionage, subversion of employees Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

4. Specific trade secret laws 3. Criminal laws e.g. for an employee to steal trade secrets from a company e.g. unauthorized access to computers theft, electronic espionage, invasion of privacy, etc. circumvention of technical protection systems 4. Specific trade secret laws US: Uniform Trade Secrets Act; Economic Espionage Act Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Remedies 1. Order to stop the mise 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 TS at trial 4. Precautionary impoundment of the articles that include misused TS, or the products that resulted of misusing Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

As in this Case of Coca-Cola Trade Secret Prosecutors say a former Coca-Cola secretary took confidential documents from the beverage giant and samples of products that hadn't been launched with the aim of selling them to rival Pepsi Faces up to 10 years in prison if convicted of conspiracy. Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Case Company accused of misappropriating TS from an inventor Inventor of new design for vacuum cleaner presented design to vacuum cleaner manufacturer. Signed NDA covering the design. Manufacturer obtained patent on the design one year after the inventor disclosed the design to them, and made estimated sale profits of $100,000,000. 2004: lawsuit settled. Company paid $30,000,000 to inventor. Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

DeCSS Trade Secret Dispute 1999: 15 year old Norwegian Jon Johannsen Studied DVD Software Player Determined how CSS anti-copy system worked Ascertained encryption keys to descramble CSS protection Posted DeCSS software on Internet 5 years of litigation involving DMCA; issues: Reverse engineering, Injunctive relief Misappropriation Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Microsoft and Google (2000) Microsoft hired Kai-Fu Lee VP for R&D Lee agreed if he left Microsoft he wouldn’t work for 1 year in competitive capacity Quit and worked for Google TRO (temporary restraining order) issued Dispute eventually settled UTSA – Civil provisions Doesn’t authorize government to bring criminal actions Some states have separate criminal statutes for trade secret theft Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

First Amendment Issues Opponents of corporate actions have revealed trade secrets to press Concerned or disgruntled employees Journalists or activists using social engineering (e.g., Ciarelli) Can corporations impose prior restraint to prevent publication? Generally, no: 1st Amendment protects such publication absent compelling reasons to interfere May still prosecute for industrial espionage after the fact Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Borland & Symantec 1992 Eugene Wang Former CEO of Borland Int’l Resigned 2 months after management shuffle Became VP of Symantec Borland officials searched his e-mail Found files sent via MCI Mail 10 msgs sent to Symantec CEO Contained confidential info Borland filed civil & criminal charges Scotts Valley Police Department Provisions of CA penal code applied Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India

Thank you Designed and Developed by IP Laboratory, MNNIT Allahabad 211004, Uttar Pradesh, India