Trade secrets and other IP protection
When it comes to protecting intellectual property (IP), familiar rights come to mind: patents, copyright, trade marks and designs.
While these are certainly important, it's important to know that you can protect your IP in a number of other ways. These include trade secrets, confidentiality agreements, company names, and various specialised rights such as a database right, a publication right and Plant Breeders' Rights.
This guide will examine the different approaches to IP protection. It will highlight some of their advantages and disadvantages and suggested uses. Finally, it will point out measures that can help you protect your business' original products, services and ideas.
Trade secrets constitute valuable business assets. Businesses can use them alongside other intellectual property rights - including patents, designs, trade marks and copyright - or as an alternative to them, to provide a competitive advantage in the marketplace.
As long as you don't disclose them, trade secrets have an infinite lifetime.
Definition of a trade secret
A trade secret is information that:
- is not be generally known or readily accessible
- has value because it is secret
- is subject of 'reasonable steps' to keep it secret
The European Union (EU) Trade Secrets Directive established a common definition for trade secrets across the EU.
Different types of trade secrets
Trade secrets come in various forms and consist of a wide range of confidential information, such :
- commercial data
- technological information
- product information
They can exist in many different types of business activities, including:
- sales and distribution
- understanding of customers and their needs
- marketing or advertising
- working with suppliers and clients
- manufacturing processes
Examples of trade secrets include the Coca-Cola recipe, search engine algorithms, customer lists or sales methods.
Using trade secrets
You may use trade secrets to protect an invention that does not meet the patentability criteria, or to protect the information you don't want to disclose. For example, the ingredients and/or formulation for a foodstuff, pharmaceutical product or perfume, which would be difficult for someone else to find out simply from examining the product itself. In these cases, a trade secret might provide the right kind of protection.
However, bear in mind that trade secrets do not guarantee exclusivity or prevent someone else from inventing the same (or similar) product or process, independently of you.
Trade secrets infringement
The best way to protect an idea may be to keep it secret. However, you may find it difficult to keep a trade secret confidential within your business. If it is necessary to disclose information (or parts of it) to partners or other people in your business, make sure that everyone involved signs a non-disclosure agreement (NDA).
If, after signing the NDA, they share the information with other people, you can sue them for breach of confidence.
To establish that a breach of confidence has taken place, the following all have to be present:
- the information must have a quality of confidence to it
- there must have been an obligation of confidence, whether express or implied
- there must have been an unauthorised use of the information
Other unfair practices in respect of trade secrets include industrial or commercial espionage and breach of contract.
Protecting trade secrets
Measures and remedies to protect trade secrets vary across the world. In the UK, trade secrets are protected by contract and/or the common law of confidence.
In 2018, the Trade Secrets (Enforcement, etc.) Regulations were introduced in the UK. The regulations implement the provisions of the EU's Trade Secrets Directive (2016/943), which requires member states to introduce laws and administrative provisions to:
- establish a minimum level of protection of trade secrets
- introduce the remedies available to trade secrets holders in cases where their rights were infringed
- ensure court procedures protect secrecy while remedy is sought
International standards for protecting trade secrets exist as part of the World Trade Organisation's Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
If you invent something that you plan to patent, you should not disclose your invention to the public before filing a patent application.
Any disclosures that you make - no matter how small - become part of the 'prior art' and could invalidate your application.
Disclosing confidential information
You can freely discuss your invention with your qualified lawyer, solicitor and patent agent. This is because what you say to them is legally privileged and in confidence. They are professionally obliged not to tell anyone else, so the information will not become public knowledge.
However, if you need to discuss your invention with other people before you apply for the patent (eg potential manufacturers), a confidentiality agreement or a non-disclosure agreement (NDA) may be helpful.
An NDA is a legal contract between two parties not to disclose information that you have shared for a specific purpose.
NDAs will not suit every situation, and you should think carefully about what is included. Ideally, consult a qualified lawyer or patent agent for advice if you are thinking about talking to anyone else about your invention.
Read more on non-disclosure agreements.
Company name as intellectual property
Companies House is responsible for the registration of companies and company names in the UK. The rules for registering company names and trade marks are different - you have to register your company name, but this does not necessarily mean you can use it as a trade mark.
IP in trade marks
A trade mark must be distinctive, and unique to your business in the sector in which you operate. It must not mislead people about your products or services, but neither can it be a generic term which is used widely in your sector. For more information, see trade marks.
IP in company names
A company name must be unique to your business and, as with trade marks, there are rules about what you can and cannot use. Specifically, your company name must reflect your business and not mislead as to its size and status. There are also a number of sensitive words which you cannot use. For more information, see how to choose the right name for your business.
Once you register your company name, it becomes your property and no one else can use it. In addition, no one can register a company name which is sufficiently similar to be confusing to other businesses or individuals. This prevents opportunistic registrations, which is where someone registers a name simply in order to get you to buy it. The Company Names Tribunal deals with complaints about opportunistic registrations.
Protecting your company name
There is a strong interaction between trade marks, company name registrations and domain names. When you decide on your company name which will represent your business to the public, make sure that you protect this name with any means possible. See more on domain name and trade mark conflicts.
Databases in the UK are protected under European law. This law protects databases in two ways:
- by copyright - if they are original in the selection or arrangement of the materials
- by 'sui generis' right - if they are not original in the sense of an author's own intellectual creation but they involved a substantial investment in their making
The two rights can run in parallel and apply to both paper and digital databases.
To qualify for protection, the collection of data must meet the relevant EU definition of a database, which is 'a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means'.
Important: The UK has left the EU on 31 January 2020 and has entered a transition period until the end of 2020. Protection in the EU for databases produced in the UK will change after the end of the transition period. Find information on sui generis database rights from 1 January 2021.
Database protection through copyright
Copyright can protect your database if it is an original intellectual creation. This guarantees you exclusive rights to reproduce, adapt, distribute the database or any variation of it.
With copyright, you protect the structure of your database (ie the originality and creativity of expression of the arrangement) but not its content.
Content, depending on its nature, may be subject to individual copyright protection (eg an article) or may not even constitute intellectual property (eg raw data or values). If you are creating or using a database that includes individual copyrighted material, you may need to seek permission of the copyright owners to use their work. See copyright for your business.
Sui generis protection
The sui generis right can protect the content of the database if its creator can prove that they have made a substantial investment of time, effort and/or money in obtaining, verifying or presenting the content.
In business, this can apply to:
- customer lists
- sales records
- business contacts
- extracts from research reports, etc
When you arrange these in a systematic or methodical way with access to each individual item within the database, you can generally protect it under the database right.
How long does sui generis database right last?
Like copyright, database right is automatic. Protection begins when the material exists in recorded form. It lasts for 15 years from the date that the database was made. You can extend it by adding a substantial amount of new information at any point during this time.
When does database right apply?
For the sui generis right to apply, the maker or the right-holder of the database must be:
- a resident or a national of a European Economic Area (EEA) member state
- a company formed and registered in a member state
This right is unique to the EEA and does not arise in relation to databases created or owned by non-EEA citizens, residents, or businesses.
Publication right is a type of copyright that automatically applies when someone publishes for the first time a literary, dramatic, musical or artistic work (including films) on which the original copyright has expired. For example, a newly discovered manuscript of a 19th-century author.
Publication for this purpose means:
- issuing copies of a work to the public
- making the work available by means of an electronic retrieval systems
- renting or lending of copies of the work to the public
- performing, exhibiting or showing the work in public
- communicating the work to the public
A work qualifies for publication right protection only if:
- the first publication is in the European Economic Area (EEA)
- the publisher of the work is at the time of first publication a national of an EEA state
Publication right term of protection
Publication right lasts for 25 years. It arises automatically and there is no requirement for registration. The person who first publishes the material will own the publication right - this will not necessarily be the original copyright owner.
Publication right is different from the copyright in a published edition, which covers the original layout and typographical design, but doesn't cover copies of the previously published editions.
This expires 25 years from the end of the year in which the edition was first published.
Plant Breeders' Rights
Plant Breeders' Rights (PBR) are a form of intellectual property (IP) designed specifically to protect new varieties of plants. The PBR holder can prevent anyone else from producing, selling, importing and exporting plants and seeds of the protected variety.
To get these rights, your plant variety must be:
- distinct - have different characteristics to other plants of the same species
- uniform - all plants in the variety must share the same characteristics
- stable - it remains unchanged after 'repeated propagation', eg reproduction from seeds, cuttings, bulbs or other plant parts
A breeder who develops a new plant or seed variety must apply for National Listing, which gives protection in the UK, to the Plant Variety Rights Office.
For new plant varieties after 1 January 2021, you must apply separately in the UK and the EU. See Brexit: Plant variety rights and marketing plant reproductive material from 1 January 2021.
Who can apply for PBR?
You can only apply for PBR if you've bred, discovered or developed a plant variety, or if you've been chosen by the breeder as their successor.
Your rights mean that nobody can use your plant species, without your permission, for:
- production or reproduction
- selling or offering for sale
- altering so it can be propagated
- exporting or importing
- keep stock of your plant species for any reason
Your rights last for 25 years (30 years for trees, vines or potato varieties).
In addition to PBR, the name of a new variety of plant or seed can be registered as a trade mark. See more on trade marks.
Conditional access technology
If you are a broadcaster, you can use conditional access technology to protect your intellectual property (IP). This is where you encrypt the transmissions so that only users who pay can access them.
Conditional access technology includes smart cards and other decoders. You sell or rent these machines to the viewers which enables them to view or listen to encrypted programmes.
It is illegal to make unauthorised copies of smart cards or other decoding equipment, as this deprives the broadcaster of revenue from people who pay for legitimate decoders.
If someone sells or uses an illegal decoder, they may be committing a criminal offence.
Copy protection devices
Copy protection devices come in several forms. They are usually digital codes embedded in electronic products and which prevent, or frustrate, unauthorised copying.
Some copy protection systems require an access code before you can copy the product. Others cause unauthorised copies to be unreadable.
If you sell your digital products with copy protection and similar technical measures, you have the right to take action against anyone who makes or sells systems to get round the protection.
These rights are similar to those preventing copyright infringement. If someone deals in ways of overcoming copy protection, they may also be committing a criminal offence.
Other forms of copy protection can include holograms, brand marks and other unique elements on packaging, which identify original products and help to differentiate them from counterfeits. See more on copy protection devices for digital content.