Can Blockchain be a ‘reasonable step’ to keep trade secrets safe?

Guest post by Alessio Balbo*

Blockchain and trade secrets: an interesting combination, surely, but how do they fit? It is worth to mention that know-how and trade secrets are among those intangible assets which have historically been difficult to protect for companies, as they do not fall under the scope of the more classical intellectual property rights, by nature (actually, by law) easier to protect or to enforce. A classic example of a trade secret is the Coca-Cola recipe, kept secret for generations of CEOs, and is apparently often changed, as the rumours whisper. This example shows the importance of trade secrets and the investments that companies make in order to protect such valuable information.  Continue reading “Can Blockchain be a ‘reasonable step’ to keep trade secrets safe?”

Report from the 37th ATRIP Annual Conference in Helsinki – “Fairness, Morality and Ordre Public in Intellectual Property”

Setting the Stage

The general objective of the ATRIP organization is to contribute to the advancement of teaching and research in the field of the law of intellectual property (“IP”). The previous annual conference was organized in New Zealand. This year it was time to head north when the conference was organized in Helsinki and the topic was “Fairness, Morality and Ordre Public in Intellectual Property”. As a Finn, it was of course a particular pleasure to see around 160 IP scholars from all over the world in one’s hometown.

On the Stage

The first morning session on Monday kicked off with the overarching topic of “Measuring and Defining Fairness, Morality and Ordre Public in IP Law”. This session was chaired by Graeme Dinwoodie (Chicago-Kent College of Law, USA). Questions discussed were inter alia fairness in international IP instruments as well as public order. The second session, “Fairness, Morality and Ordre Public: What Does it Mean for Authors?” was chaired by Sam Ricketson (University of Melbourne, Australia). In this session, the balance of rights bwetween right holders and the authors were discussed as well as “fair” remuneration for authors. There was also a quite interesting presentation of copyright in street art by Pascale Chapdelaine (University of Windsor, Canada). One of the afternoon sessions had the topic “Fairness, Morality and Ordre Public: What Does it Mean for Groundbreaking Technologies?” and was chaired by Jens Schovsbo, (University of Copenhagen, Denmark). Here the presentations inter alia dealt with AI, blockchain and 3D printing.

Continue reading “Report from the 37th ATRIP Annual Conference in Helsinki – “Fairness, Morality and Ordre Public in Intellectual Property””

Decompiling the rules on trade secrets, software and reverse engineering – the sequel

In my previous post from January last year I discussed reverse engineering in light of the Trade Secrets Directive (“TSD”) as well as the Software Directive (“SD”). I strongly recommend you to review my previous post (here) before reading this piece, since said post lays the foundations for the arguments and considerations discussed below.

The focus of this article will lie on implementation of the provision on reverse engineering in Finnish legislation. A very interesting aspect here is the relationship between trade secrets and copyright, which is why I have chosen to discuss in particular in this post.

Background

As a consequence of the adoption of the TSD, the Finnish Ministry of Economic Affairs and Employment (“MEAE”) assigned a working group to prepare the national implementation of the TSD in Finland. On 18 October 2017, the working group published its recommendation (“Finnish Proposal”) in which it proposes reform and consolidation of the Finnish legislation concerning the protection and civil enforcement of trade secrets. The aim is to enhance the protection of trade secrets by providing effective legal remedies against trade secret misappropriation. In the Finnish Proposal, it is suggested that the TSD would be mainly implemented by a wholly new Trade Secrets Act.

Continue reading “Decompiling the rules on trade secrets, software and reverse engineering – the sequel”

Fresh EUIPO Report on trade secrets and patents – Finnish companies top the list in use of trade secrets

Last month, the EUIPO published an interesting report titled “Protecting innovation thru trade secrets and patents: determinants for European Union firms” (“the Report”). Seven findings have been included in Executive Summary, and in this post I will dig into the three findings I find most interesting (No. 2, 4 and 5 in the Report).

“The use of trade secrets for protecting innovations is higher than the use of patents by most types of companies, in most economic sectors and in all Member States”

Upon first reading, I didn’t find this very surprising. Namely, virtually all companies have some kind of trade secrets like e.g., sales or related data, but only some companies are innovative enough to be granted patents even if they would apply. But what surprised me somewhat was that Finland (where I reside and practice law) was the country where trade secrets would be used the most compared to all other countries in Europe (page 28 of the Report). I found this surprising, since while every serious IP lawyer must know trade secret law, the topic is not widely debated in Finland. In Finland, as in many other countries in the world, trade secrets law is still the “Cinderella” of IP.

Based on the Report, large companies typically utilize both trade secrets and patents on a larger scale compared to SMEs. Nevertheless, Finnish SMEs are the heaviest users of trade secret protection in Europe, based on the report (page 30 of the Report). Namely, a staggering 76,8 % of Finnish SMEs use trade secrets to protect trade innovations according to the Report. Innovative SMEs in Finland use trade secrets 2,5 more than patents. This may of course be rooted in several different factual and legal aspects. By way of example, patents are of course more expensive and the threshold may not always be met (e.g., novelty and inventive step). Also, patents have a fixed term (20 years), while trade secrets do not. Continue reading “Fresh EUIPO Report on trade secrets and patents – Finnish companies top the list in use of trade secrets”

Reverse burden of proof and trade secrets in patent litigation – Part two

 

In my previous post (here), I discussed the reverse burden of proof on an international level and the potential tension which could emerge between the patent and trade secrets regimes in this context. In this post, I will turn the focus to Europe and discuss the regional provisions as well as the relevant provisions of the UPC Agreement.

The Enforcement Directive and the Trade Secrets Directive

There are a few provisions in the Enforcement Directive on confidentiality in court proceedings. The need to preserve confidentiality in intellectual property litigation is recognized in the recital of the directive (Recital 20). In addition, a few provisions (Arts. 6 (2), 7 (1) and 8 (2) (e)) of the directive deal with the protection of confidential information in IP litigation.

The drafters of the directive have recognized the need to protect the confidential information of the adverse party. But what is to be noted is that the Enforcement Directive does not contain any provision on the reverse burden of proof in patent litigation, or the protection of trade secrets in these situations.

The Trade Secrets Directive includes a specific provision (Art. 9) on the protection of trade secrets in litigation concerning the unlawful use or disclosure of a secret (See my post on trade secret litigation here). Ergo, said provision is not applicable in patent litigation. However, Art. 9 of the Trade Secrets Directive could provide for certain general examples of how trade secrets could be protected in patent litigation. These include restricting access to documents, restricting access to hearings, and providing non-confidential versions of judgments. There should for example be no immediate obstacle for a national legislator to include similar provisions in national laws.

Continue reading “Reverse burden of proof and trade secrets in patent litigation – Part two”

Reverse burden of proof and trade secrets in patent litigation – Part one

litigation and family attorneys

Background – lack of protection

For a long time in many European countries, pharmaceutical compounds were not eligible for patent protection. Prior to the adoption of TRIPS, there were actually 22 countries in which the protection of pharmaceutical compounds was unavailable. Innovative pharmaceutical developers were only able to indirectly try to protect their pharmaceutical product by protecting the process for manufacturing the product. At the time, some states made efforts to compensate for the lack of product protection in different ways. In Finland, you could apply for a so called “analogous process patent”, by which you were able to get a patent for if you had developed a new product, but the scope of protection was, odd as it may seem, nevertheless restricted to the manufacturing process.

Continue reading “Reverse burden of proof and trade secrets in patent litigation – Part one”

Decompiling the rules on trade secrets, software and reverse engineering

civil_engineering_homework_help

My last post concerned trade secret litigation (read it here), and since I am (at least momentarily) quite fascinated by the subject of trade secrets, I decided to do a follow-up post on another topical issue in this field. In trade secret law, two types of behavior are generally considered to be allowed: i. independent discovery and ii. reverse engineering. Especially the latter sparked discussion in the EU with the arrival of the new Trade Secrets Directive (2016/943) (“TSD”). Reverse engineering is allowed based on Art. 3 (1) (b) and recital 16 of the TSD. Recital 16 of the TSD stipulates that

“[…] Reverse engineering of a lawfully acquired product should be considered as a lawful means of acquiring information, except when otherwise contractually agreed. The freedom to enter into such contractual arrangements can, however, be limited by law.”

Let’s pause here for a moment and decompile this provision:

  • Main rule: If you lawfully acquire a product, you may reverse engineer it.
    • Exception: Reverse engineering is not allowed if it has been contractually agreed that such behavior is not permitted.
      • Exception to exception: However, the freedom to enter into such an agreement restricting the permissibility of reverse engineering may be restricted by law. This, in a sense, takes you back to the main rule in the first bullet point.

Continue reading “Decompiling the rules on trade secrets, software and reverse engineering”

Shhh….Keeping the Secret Secret and Trade Secret Litigation

top-secret-1076813_960_720

“Whatever you do, don’t tell anyone”

(Queens of the Stone Age – The Lost Art of Keeping a Secret)

I doubt Josh Homme was thinking about trade secrets when he wrote the above lyrics, but there’s some valuable “legal advice” hidden in those lines. Namely, as often pointed out, once a trade secret is out, it may be lost forever.

Indeed, the secret maybe lost but not necessarily given away for free. Trade secret legislation is designed particularly for these unfortunate situations. Once the secret is out, you may not be able to get it back in the bottle again. But you may be able to stop further spreading of the secret and at least get some damages from the perpetrator. This will usually mean you will have to go to court for enforcement. And this is where it may get a bit tricky: Alas, in order for the enforcement to be successful you will probably have to disclose your secret. That doesn’t sound very tempting if your trade secret is valuable, does it? Continue reading “Shhh….Keeping the Secret Secret and Trade Secret Litigation”