It may not surprise the reader to learn that the World Intellectual Property Organization (WIPO) offers a major resource about trade secret law and management. But this new online “WIPO Guide to Trade Secrets and Innovation”—introduced this past summer—was a long time coming. In part this lag was due to the agency’s primary mission, which is to implement and manage international treaties affecting registered IP rights: patents, copyrights, trademarks and designs. In many corners of the IP community, trade secrets don’t even qualify as “intellectual property,” in spite of the TRIPS Agreement, which declares otherwise and requires all member states (through Article 39) to provide enforcement of rights in “undisclosed information.”
When I arrived at WIPO in late 2009, I learned more about why trade secrets had received so little attention relative to the rest of the IP landscape. Why didn’t we have robust programs dealing with this obviously important asset? In the first place, I was told, the diplomats in Geneva didn’t really understand what trade secrets were, but they presumed that secrecy must conflict with the notion of transparency in government, a principle which they all valued, at least in the abstract. Second, to the extent that anyone knew what trade secrets were, they thought immediately of Article 39(3) of TRIPS, which was designed to protect clinical data owned by drug companies, an industry that unfortunately many loved to hate.
I learned that this negative view was reinforced by another misunderstanding, that trade secrets encouraged and enabled hoarding of knowledge. That the opposite was true seemed confounding to many, until of course one considered how tech transfer works, and how sharing in an information-based economy is made safe only by the existence of legal frameworks to enforce expectations of confidentiality. In spite of the confusion and wrong assumptions, it seemed clear to anyone engaged in business that secrets were important. After all, the promised “knowledge transfer” to the developing world that had been promoted as the payoff for agreeing to TRIPS hadn’t materialized. Even though everyone could read published patents, without the relevant know-how it was often impossible to build the infrastructure to practice the patented inventions. So this was the conundrum: trade secrets seemed to be both essential and mysterious at the same time.
It wasn’t that the subject was entirely ignored. We had a division focused on helping small and medium enterprises (SMEs), universities and research institutions with practical application of IP, and trade secret education was a part of that effort. But it wasn’t in the spotlight. That started to change in 2016, following a wave of attention from the business community reflected in the near-simultaneous passage in the U.S. of the Defend Trade Secrets Act and the EU’s issuance of its Trade Secrets Directive. In 2019 WIPO sponsored a Symposium on Trade Secrets and Innovation, an event that was repeated in 2022. Along the way, it published articles promoting secrecy as an intellectual property right and explaining why trade secrets are the most popular form of IP protection for SMEs.
The symposia were designed and carried out under the leadership of Tomoko Miyamoto, Head of the Patent Law Section at WIPO, whose keen interest in trade secrets was the primary force behind those events. When the idea for publishing a comprehensive treatise emerged in 2022, she also led that project. It bears emphasis, however, that the finished work, like many WIPO publications, was authored by many individuals from all around the globe. This approach has the advantage of bringing multiple points of view and experience to a multinational resource; but it also creates a serious editorial burden, finding ways to harmonize forms of expression while retaining helpful comparisons among jurisdictional frameworks of individual countries. I had the privilege of working with Tomoko to bring the final version to print, and it was released in June 2024.
As the title suggests, this 145-page (plus appendices) volume is intended to “guide” the reader. A great deal of effort went in to making it accessible as well as comprehensive, to meet the needs of two major constituencies: (1) businesses, particularly SMEs, and (2) policymakers in a position to influence the development of legal frameworks, particularly in developing countries. Of course, WIPO also intends the Guide to be educational, providing the public with easy-to understand explanations and examples. It is practical, not academic, designed to meet the varied needs of the small shop owner, the fast-growing online business, as well as the established company seeking cross-border collaborations. Therefore, it can be a valuable resource for any organization anywhere in the world, providing insights and tips, presented in a global context not present in most other reference works.
The Guide is organized logically, beginning (after the introduction) with the strategic role of trade secrets in an information-based economy. Recognizing that the idea may seem counterintuitive, the Guide emphasizes that secrecy enables the sharing and dissemination of information, by providing enforceable guarantees of confidentiality and trust. And because certain types of innovations are not suitable for patent protection (for example, process technology deployed in private where infringement cannot be detected), the public interest in trade secret enforcement aligns with the patent system, as each encourages innovation in different ways. We can only hope that this sort of clarification will help to overcome the widespread suspicion of trade secret laws and lead to meaningful efforts to harmonize global frameworks.
The next section (Part III) provides a primer on trade secrets, including a basic definition “in 150 words,” a description of the kinds of information that can qualify for protection, and the common elements of most countries’ laws and procedures for enforcement. Similar to WIPO’s treatment of other forms of IP, the Guide includes a section on “exceptions and limitations” to the right (for example, whistleblowers). It also includes a discussion contrasting patents and secrets, while emphasizing that commercialization of innovation usually relies on both forms of protection pursued through a complementary strategy.
One of the most practical and useful sections (Part IV) addresses management of trade secret assets, directed at the twin goals of preventing loss and proving that the owner took “reasonable steps” (an element of the TRIPS formulation) to protect the integrity of its secrets. The Guide includes instructions on how to identify and assess secrets and related risks, as well as how to design and implement a trade secret protection program. It focuses not only on preservation of assets but also on how to deploy them in the business to increase enterprise value. Defensive strategies are also included, directed at avoiding contamination, for example in hiring high-level talent from competitors, or controlling exposure in the course of third-party relationships.
Part V deals with litigation, including investigations, offensive and defensive strategies, and finding ways to resolve disputes that are often driven by emotions. The Guide surveys various remedies (including extraterritorial reach), and deals with ways in which judges can maintain the secrecy of information that has to be submitted as part of court proceedings. Although not all jurisdictions allow criminal prosecution for trade secret theft, given the risks involved in cross-border transactions, the discussion of criminal exposure is clearly helpful.
As if to drive home the point that trade secret laws encourage knowledge-sharing in the pursuit of innovation, the Guide includes an extensive discussion of collaborations. The commercial aspects are described through the timeline of most relationships, beginning with establishing contracts and trust, through management of the development process, and eventually sorting out the resulting rights. A similar but distinctive treatment is given to academic collaborations.
Finally, the Guide takes a look at special issues involving the increasingly critical asset class represented by “digital data” in its various forms, including raw data, analytics and code. For many companies whose business model has been transformed by the value of data they collect in the ordinary course, this section (VII) will be illuminating and helpful.
It hasn’t been that long since trade secrets were barely whispered about at WIPO. With the WIPO Guide to Trade Secrets and Innovation, the organization has made a major contribution to completing the “IP stack” of modern business.