1. Intellectual Property Four (6) Types Trade Secrets GI Trademarks Copyrights Industrial design Patents

2. Trade Secrets Definition Information that is sufficiently secret toderive economic value from not beinggenerally known and is the subject ofreasonable efforts to maintain its secrecy. A trade secret can be any information thatderives independent economic value from notbeing generally knownorreadilyascertainable. 3. What are TS? Among the things that can be trade secrets are aformula, pattern, compilation, program, device,manuals, method, technique, or process. Businesses to consider whether its techniques, manuals, recipes, prospect list, pricing can be protected as trade secrets 4. What are TS? Among things courts have found to be "tradesecrets" are machining processes, blueprints, stock-picking formulae, customer lists, pricing information, and non-public financial data.On the other hand, information such as overhead ratesand profit margins that help define a price may befound to be a trade secret even if the price itself isknown. 5. Trade SecretsFactors to determine if information amounts to a TS: Is it known outside the company Have measures been taken to guard itssecrecy How much money was spent developing it What is the value of the information for yourcompany and to your competitor 6. Trade Secrets Trade Secret Audit to establish a trade secret protectionand compliance programme Consider appointing a Trade Secret Compliance Officer Advantages of a written policy includes: Clarity (how to identify and protect) & Demonstrates commitment to protection Educate and train staff in need to protect Trade Secrets Make it known that disclosure of a TS may result intermination and/or legal action. Monitor compliance 7. Trade Secrets (contd) Protection Available Trade Secrets are protected by common law, state statutes and contract law in the U.S. and in most other countries. No registration is available. Term of Protection Trade secrets are protectable as long as secrecy is maintained (perpetual) 8. Trade Secrets (contd) Notice and Marking Documents and visually perceptiblecopies of trade secret information shouldbe clearly marked as confidential,proprietary, secret or restricted. 9. Trade Secrets (contd) Infringement The unauthorized disclosure or use oftrade secrets constitutes misappropriationand is actionable under state laws. Criminal penalties may apply. 10. TRADE SECRETS: BACKGROUND Genesis in state common law, unlike other IP Grounded in policy of business ethics Rights can be perpetual, but are nonexclusive All patents begin life as trade secrets 11. Background Trade secret protection stems from thecommon law and dates back to the 1800s.Today, every state recognizes some form oftrade secret protection. Most states havelegislation that specifically recognizes tradesecrets, though some still rely solely oncommon law principles. 12. Background Most of the states that have trade secret laws usethe Uniform Trade Secrets Act, which has helpedcreate a more uniform body of law from state tostate than if each state had its own unique law. Insharp contrast to patents, copyrights andtrademarks, which are all Federal-based forms ofintellectual property, trade secret protectionoriginates and is primarily maintained throughstate law. 13. USE OF TRADE SECRET PROTECTION Advantage: long life, no disclosure Disadvantage: no exclusivity Increasingly chosen over patent Cheap self-help vs. expensive registration Short lifespan of innovation Patent infringement difficult to police 14. THREE TYPES OF AGREEMENTS NDA: reinforces obligation to respectconfidence Assignment: transfers rights to invention Non-compete: temporarily prohibits post-employment competition 15. NDA => EFFECT ONBEHAVIOR USUALLY LOW Provides notice & proves reasonable efforts Standard NDA not controversial Prohibiting reverse engineering? 16. EMPLOYEE ASSIGNMENT =>SOME EFFECT Rationale: what the company pays for Problem of post-employment restriction 17. NONCOMPETES => SUBSTANTIAL EFFECT Justification: avoid trade secret battle Vague standards (e.g., reasonable time andscope) 18. CRIMINAL Criminalization relatively recent State laws Economic Espionage Act Problems of criminalization Overreaction of the uninformed prosecutor Standards vary (e.g., technical vs. business info) 19. CONCLUSION Need clearer standards, more uniform Criminalization should be watched &studied carefully Need recognition of value of imperfectprotection Some loss inevitable Value of mobility: the leaky bucket 20. Trade SecretsPatents no registration costsfeesbut: costs to keep secretregistration + maintenancecan last longerlimited in time- but: limited to economic life - generally: max 20y- uncertain lifespan: leak out is irremediable - but: can be invalided no disclosuredisclosure- but: practical need to disclose- publication 18m after filing - if leak out: TS lost- if P not allowed: no TS 21. Trade SecretsPatents Large subject matter Subject matter limited:Protection of virtually anything- Requirements: new, non obvious, usefulmaintained in secret by a business - Scope: patent claimthat gives competitive advantageOnly protection againstRight to exclude improper acquirement/use monopoly to prevent others from exploiting the invention More difficult to enforce "Power tool" - some countries: no laws- ability to safeguard TS during litigation 22. Business and Marketplace Considerations 23. 1. Market life of the subject matterSome products have commercial life of only a fewmonthsPatent typically takes 25 months to be issued Patent protection may not exist until after market life ofthe product has expired TS allows immediate commercial use 24. 2. Difficulty of maintaining thesubject matter secret Time, willingness and funds to: Develop internal policies Implement protection program Initiate immediate legal action to protect trade secretsfrom disclosure (preliminary injunction) Risk of disclosure number of persons needingaccess to the TS Employees Need for investors External contractors 25. 3. Likelihood of subject matter beingreverse engineered Easy to control RE? Products widely sold to consumers difficult to prevent RE P Products sold to limited number of persons control, e.g. licenseagreement which forbids RE and requires licensee to maintain thetechnology secret TS Difficult/expensive to do RE? Secret manufacturing method or formula difficult TS Secret embodied in product easy (e.g. raw material) P 26. Example no. 1 Decades ago, Coca-Cola decided to keep its soft drinkformula a secret The formula is only known to a few people within thecompany Kept in the vault of a bank in Atlanta Those who know the secret formula have signed non-disclosure agreements It is rumored that they are not allowed to traveltogether If it had patented its formula, the whole world wouldbe making Coca-Cola 27. In the past, you could not buy Coca-Colain India, because Indian law required thattrade secret information be disclosed In 1991, India changed its laws, and Coca-Cola can now be sold in the country 28. Examples no. 2 Secret technique forjeans washing Secret textileweaving techniquesfor saris Content of dyemixtures 29. Example no. 3 Glamourmom applied for patent forbreastfeeding bra Allows mothers to discretely andconfidently breastfeed Built-in soft cup frame and elastic shelfprovides full nursing bra support. But unlike any other nursing bra on themarket, it covers the tummy. Looks likea regular top. 30. 4. Likelihood of subject matter being independently developed Complexity of invention Number of competitors working in the field Potential payoff for achieving market success e.g. drug that cures cancer Alternative option: defensive publication 31. 5. Type of subject matter New basic technology pioneer patent many licensees: allows to set low licensing fees competitors have no incentive to risk patent litigation Minor improvement in well-developed field P will be narrowly construed easy to invent around or: competitors likely to use preexisting technology Protectable in all countries? in some countries not patentable? too costly to protect in all countries? 32. Example - Invention for putting a permanentimage on a piece of apparel Cond System Inc. produces The fabric remains soft and DyeTrans Wearables byabsorbent with less pile than using a patented process to cotton or cotton blends and treat fabric so it captures resists wrinkling and photographic-quality artworkshrinkage. and text in the fabric rather than on the surface of the fabric.Source: http://www.corporatelogo.com/articles/031feat3.html 33. Potential long market life Potential many licensees Would be difficult to keep secret many licensees risk for reverse engineering Patent: only 20y, but exclusive rights