Recently, the protection of industrial secrets has taken on new momentum due to the frequent attacks of “cyber espionage” on companies around the world, of spies who use fake emails to enter corporate networks and search for valuable information.

It is also seeking to renew legislation on industrial secrets, to provide a framework that allows collaboration in innovation activities, often with participants located in different countries, both governments and industry are clearly interested in strengthening the protection through this legal concept.

Definition of industrial secret

Based on Article 82 of the Industrial Property Law, an industrial secret is considered to be any information of industrial or commercial application kept by a natural or legal person in a confidential manner, which means obtaining or maintaining a competitive or economic advantage over third parties in the realization of economic activities and for which has adopted sufficient means or systems to preserve their confidentiality and restricted access to it.

The information of an industrial secret must necessarily be related to the nature, characteristics or purposes of the products; to production methods or processes; or to the means or forms of distribution or commercialization of products or provision of services.

Any information that is public domain, that is obvious to a technician in the field, based on previously available information or that must be disclosed by legal provision or by court order will not be considered an industrial secret. Any information that is provided to any authority by a person who possesses it as an industrial secret, when it is provided for the purpose of obtaining licenses, permits, authorizations, registrations, or otherwise, is not considered to enter the public domain or that is disclosed by legal disposition. any other acts of authority.

The unauthorized use of such information by persons other than the owner is considered unfair practice and violation of industrial secrecy. Depending on the legal system, the protection of industrial secrets is part of the general concept of protection against unfair competition or is based on specific provisions or jurisprudence on the protection of confidential information.

The industrial secrets can be mainly of two types: on the one hand, industrial secrets may concern inventions or manufacturing processes that do not meet the criteria of patentability and, therefore, can only be protected as industrial secrets. On the other hand, industrial secrets may concern inventions that satisfy the criteria of patentability and, therefore, may be protected by patents. In this case, the owner must decide whether to patent the invention or consider it an industrial secret.

Measures to effectively protect industrial secrets

Companies must take all necessary measures to effectively protect their industrial secrets. These measures include:

1.- Determine if the secret is patentable and, if affirmative, determine if a patent protection would not be better.

2.- Make sure that only a limited number of people know the secret and that they are aware that it is confidential information.

3.- Include confidentiality agreements in contracts signed by employees. However, in accordance with the legislation of many countries, employees must respect the confidentiality due to their employer, even if no such agreements exist. The duty to respect confidentiality regarding employer secrets is generally extended, at least for a certain time, even after the employee has ceased employment.

4.- Sign confidentiality agreements with business partners whenever confidential information is disclosed.

Some advantages of industrial secrets

1.- The protection of industrial secrets has the advantage of not being subject to temporary limits (patents have a term that can reach up to 20 years). Accordingly, the protection of industrial secrets continues indefinitely as long as the secret is not revealed to the public.

2.- The industrial secrets do not involve registration costs (although they may involve costs destined to keep the information confidential).

3.- The industrial secrets have an immediate effect.

4.- The protection of industrial secrets does not require obeying requirements such as the disclosure of information to a government.

Some disadvantages of industrial secrets

1.- If the secret is embodied in an innovative product, it can be inspected, dissected and analyzed (what is called “reverse engineering”) by third parties who can discover the secret and, therefore, use it. In fact, protection by industrial secrecy of an invention does not confer the exclusive right to prevent third parties from using it commercially. However, if protection is granted as regards an illicit obtaining of the reserved information. Only patents and utility models provide this type of protection.

2.- Once the secret is disclosed, everyone can access it and use it as they please.

3.- An industrial secret is more difficult to enforce than a patent. The level of protection granted to industrial secrets varies significantly from country to country, but is generally considered low, especially when compared to the protection afforded by a patent.

4.- An industrial secret can be patented by any other person who has obtained the pertinent information by legitimate means.

When should industrial secrecy be used?

Although decisions must be taken on a case-by-case basis, it is advisable to resort to the protection of industrial secrecy in the following circumstances:

1.- When the secret is not patentable.

2.- When it is very likely that the information can be kept secret for a considerable period of time. If the secret information consists of a patentable invention, the protection of the industrial secret will be convenient only if the secret can be maintained for more than 20 years (period of protection of a patent) and if it does not seem likely that third parties can reach the same invention. legitimate way.

3 .- When the industrial secret is not considered valuable enough to be the subject of a patent or utility model (in countries where there is protection by utility model).

4.- When the secret refers to a manufacturing process instead of a product, since the products are more subject to reverse engineering.

5.- When you have already applied for a patent and are waiting for it to be granted.

However, it should be remembered that the protection of industrial secrecy is, in general, limited in most countries, since the conditions and scope of protection may vary significantly from country to country depending on the statutory mechanisms and the law. existing jurisprudence, and that courts may require considerable and onerous efforts to preserve secrecy. Whenever possible, protection by patent or utility model will provide much greater protection.

International framework of industrial secrets

The regulation of industrial secrets, like that of other forms of intellectual property, is governed by national legal systems. However, in 1995, international standards for the protection of secrets (“undisclosed information”) were created under the TRIPS Agreement. Article 39 of the agreement states that Member States will protect “undisclosed information” against unauthorized use “in a manner contrary to honest commercial practices” (this includes breach of contract, breach of trust and unfair competition). The information must not be generally known or easily accessible, must have a value because it is secret, and must be subject to “reasonable measures” to keep it secret. This general formula of the laws on industrial secrets has been adopted by more than 100 of the 159 members of the World Trade Organization.

Articles 42 to 49 of the TRIPS Agreement deal with enforcement, and include judicial procedures for the enforcement of all intellectual property rights, as well as the protection of “confidential information” from disclosure. However, because national judicial systems, and especially the methods of granting access to evidence, are very different from one another, it is generally considered that the enforcement of industrial secret rights also varies widely from one to the other. one case to another.

New boom in industrial secrets

Industrial secrets have jumped to the headlines, with stories of “cyber-espionage” attacks on companies around the world, of spies who use fake emails to enter corporate networks and search for valuable information.

Paradoxically, the great explosion of innovations that has brought so many benefits to the world has also made it easier for thieves to steal valuable business information. For example, through a procedure known as “spear-phishing”, commercial spies send an email message with personal information obtained from Facebook or other social networks, so that the recipient does not realize that the message is a deception Once the recipient clicks the link in the message, an evil program of the thief, known as “malware”, invades the receiver’s computer and through it the company’s network. Betting on the computer system for months or even years, this silent invader searches for important confidential files and passwords and sends it to the pirates, who use or sell the information.

Locating the source of cyberespionage is very difficult, given the ubiquity and anonymity of the Internet. Estimating the damages that it produces to the companies is equally difficult, in part because many companies do not know that their systems have been compromised, and also because those who estimate them are often reluctant to report it. However, studies show that the problem is increasing, and governments around the world are looking for ways to solve it.

For businesses, the problem is not only to protect their own valuable information, but to avoid being infected by secrets that belong to others. In a global market that is characterized by the ease of movement of employees and complex networks of connections between suppliers and customers of companies, special vigilance is needed to avoid contamination by unwanted information. Increased competition also means that companies have to continually work to find ways to exploit their secrets, whether through direct marketing, collaborations or licensing. Meanwhile, the simple volume of potentially valuable data creates its own inventory and valuation problems.

Industrial secret or patent?

For companies that use patent protection, secrecy is a decisive part of the innovation process. Since most national patent laws require “absolute novelty”, that means that until the patent application is filed the invention must be completely protected against any public disclosure. When technology requires refinement through experimentation outside the laboratory, this can be extremely difficult. This is why discussions on the international harmonization of patent law usually include the idea of ​​a “grace period” of up to one year prior to submission, during which the fact that an inventor discloses information does not disqualify the subsequent patent application.

Considerations for preparing a protection plan

The eight categories of a comprehensive protection plan include:

1.- Create agreements, policies, procedures and records to establish and document protection;

2.- Adopt physical and electronic measures to safeguard security and confidentiality;

3.- Evaluate the risks to later define and prioritize the vulnerabilities of the industrial secrets;

4.- Establish due diligence procedures and constant management of external actors;

5.- Constitute a team to protect the information;

6.- Form and strengthen the capacities of employees and external actors;

7.- Supervise and measure the efforts of the company;

8.- Adopt corrective measures and continually improve policies and procedures.