Trade secrets are important assets for a business and derive their value due to their secrecy. Trade secrets constitute confidential business information that give a competitive edge to their owner. They include industrial, manufacturing, or commercial secrets. Any unauthorized usage of a trade secret is a violation. With secrecy, a business can develop an advantage over its competition. By placing the value in its secrecy, the information is subject to outside forces attempting to steal the valuable information. By placing the information on a network server accessible through the Internet, a business organization’s vulnerability increases. Rather than simply risking disclosure by a disgruntled employee or being a victim of corporate espionage, businesses can now find themselves at risk of unauthorized access, i.e., hacking. The Internet allows information to be quickly and easily disseminated all around the world. Information can be accessed by anyone who has access to a computer and the Internet. With the borderless nature of the web, it would be difficult to subject users to the laws and regulations protecting trade secrets. As a result, the United Nations created the World Intellectual Property Organization (“WIPO”) in order to address issues regarding intellectual property, which includes, but is not limited to, trade secrets.
The purpose of WIPO is to create a worldwide intellectual property system that fosters creativity and innovation. Currently, there are 188 members, including, the United States and United Kingdom. WIPO’s services include dispute resolution to intellectual property-related cases such as arbitration and mediation. It provides an annual forum for governments, intergovernmental organizations, and industry groups to meet and discuss issues.
International standards for trade secret protection are similar to the formula adopted by over 100 members of the World Trade Organization. The standard is published as a part of the TRIPS Agreement. For example, Article 39 states that members must protect undisclosed information (e.g., trade secrets) from unauthorized use that is contrary to honest commercial practices. Also, the information must be secret in nature and there must be reasonable steps to protect the secrecy. Also, Articles 42-49 call for civil proceedings to enforce the standards.
As stated earlier, with the advent of the Internet, it is easier to obtain confidential information. A common situation of cyber espionage is spear phishing. Spear phishing is when a hacker sends an email with information taken from social media to trick the recipient into believing the message is authentic. Once the link is clicked, the malware enters the recipient’s computer and goes through the network to gain access to confidential information. Once the hackers obtain the information, it is then sold to other entities on the black market. However, it is difficult to trace these incidents. It is difficult to trace them due to the anonymous nature of the Internet. It is also difficult to trace them because companies will not find out their systems have been compromised until it is too late. By keeping these problems in mind, governments should continue to modify, update, and enforce the applicable regulations.
At our law firm, we assist clients with legal issues related to business, trade secret protection, and intellectual property issues. You may contact us to set up an initial consultation.