How to Protect your Trade Secrets
With the evolution of technology, businesses are developing innovative and strategic methods and processes for running their businesses in 0rder to have a competitive advantage over its creditors. These formulas, practices, designs, instruments, patterns, or compilations of information, business models, methods or processes that are not known outside the company may be trade secrets and can be protected. Trade secrets are intellectual property (IP) rights on confidential information which may be sold or licensed.
1. What are trade secrets?
With the evolution of technology, businesses are developing innovative and strategic methods and processes for running their businesses in 0rder to have a competitive advantage over its creditors.
These formulas, practices, designs, instruments, patterns, or compilations of information, business models, methods or processes that are not known outside the company may be trade secrets and can be protected.
Trade secrets are intellectual property (IP) rights on confidential information which may be sold or licensed.
Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) provides that members shall protect undisclosed information against unfair competition provided that such information meets the following requirements:
a) be commercially valuable because it is secret;
b) be known only to a limited group of persons; and
c) be subject to reasonable steps taken by the rightful holder of the information to keep it secret, including the use of confidentiality agreements for business partners and employees.
Kenya is a signatory to the TRIPS Agreement. The above requirements under TRIPS Agreements set out the test used to determine whether the information is a secret and can be protected under trade secrets.
The unauthorized acquisition, use or disclosure of such secret information in a manner contrary to honest commercial practices by others is regarded as an unfair practice and a violation of the trade secret protection.
2. What are the benefits of Trade Secrets Protection?
Below are the benefits for protecting trade secrets:
a) Protection against unfair competition – protecting your trade secrets helps you to protect your business from counterfeiters and from unfair competition whereby your competitors copy your business ideas to their advantage.
b) Validity Period- unlike other intellectual property rights, trade secrets can be protected for an indefinite period of time. For example, Coca Cola has protected the secret formula for making Coca-Cola as a trade secret for more than 130 years.
c) Timely and cost effective – there are no registration requirements for trade secrets. For this reason, there are no registration costs incurred and the timelines for protecting the trade secrets are within the control of the company.
3. How to protect your trade secrets?
Trade secrets can be protected through various measures as set below:
a) Physical and electronic measures: the company can control who is able to access the premises through such things as key cards or such other measures. The company can also put in place CCTV surveillance and such other electronic security measures. The company can also protect its information through technology measures to protect its information from cyber-attacks.
b) Policies and Procedures: the company can put in place such policies as data privacy and protection, use of confidential information, procedures on access and use of company property including information and the measures to ensure that such policies are complied with.
c) Employment contracts and Human Resource Manuals – the company can through the employment contracts and the human resource manuals bind the employees from disclosing confidential information and requiring them to comply with all the company policies and data handling procedures. The company can also provide in the Human Resource Manual the disciplinary procedures to be taken where there is breach.
d) Commercial agreements: the company can protect confidential information through commercial agreements such as non-circumvention and confidentiality agreements between the company/owner with its employees and contractors or including a provision for confidentiality and non-circumvention in any commercial agreements entered into between the company/owner with any business partners or third parties.
e) E-mail disclaimers- can be used to protect the confidential nature of any information disseminated through the e-mails. Companies should therefore ensure that they have e-mail disclaimers in the form of confidential disclaimers.
f) Terms and conditions – the terms and conditions contained in company websites can include a confidentiality clause.
How we can help?
We are seasoned professionals well known for client centric and high quality legal services in the Intellectual Property and Technology Sector. We will be glad to walk with you towards the journey to protecting your trade secret as we are aware of the critical role it plays in the success of a business. We provide specialized legal advice on how to explore the measures set out above to protect your trade secrets, draft commercial agreements for protection of your trade secrets or conducting an audit of your existing agreements to ensure that your trade secrets are protected at cost friendly rates. Contact us at cmsmeclub@cmadvocates.com
Published on Aug. 22, 2024, 1:10 p.m.