Fordham Focus 7: Trade secrets

Daan Erikson (Fordham Senior Research and Conference Fellow) moderated the first day's final session, which addressed various aspects of trade secrets. Standing in for Jim Pooley, Matt Rainey gave a WIPO-based account of the value of trade secrets protection as an alternative or adjunct to patents. Matt mentioned cyber-espionage, protective measures against secrets theft, commercialisation of secrets, licensing and valuation -- all things that look as though they should be outside WIPO's remit since the organisation has no trade secrets treaties or registration system to administer.

Matt mentioned the importance of secrets as part of a business model, citing the experience of Procter & Gamble which maintains that more than 50% of the value of its business is derived from trade secrets. Despite their importance, though, there is massive national variance in terms of their legal status and the way they're protected.

Next up was GE's IP litigation head Richard Rainey, who emphasised the importance of trade secrets where the protection offered through the patent system was far too slow -- for example in sectors where the product path from development to launch is just four months.  GE does a lot of infrastructure-related business in developing countries, where patent protection may be difficult to obtain so trade secrets are important.

Good spies are trained
from an early age ...

Dealing with cyber-threats is an important part of GE's IP strategy. Robust civil and criminal protection against these threats, which are increasing, is imperative. Also, trade secrets literally walk out of the door with ex-employees and others, who may simply put them on to a flash drive. Accordingly, all downloads from GE are monitored. On the international scene, much needs to be done if confidence in investment is to be restored, Richard concluded.

Stanford McCoy, speaking for the third time today, explained the official US position on theft of trade secrets by foreign enterprises and powers.  All the agencies of the US government are now focused on a trade secrets mitigation strategy that was rolled out earlier this year.  The US government is also prepared to encourage private sector initiatives to counter the threats, which are taken very seriously: these include the development of best practices.  In terms of current law, use of Special 301 provisions as a means of bringing pressure on foreign governments is an available option.

At this point, this Kat had to leave the session ... but he'll be back tomorrow.