Transcript Trade Secrets

International
Intellectual Property
Profs. Atik and Manheim
Fall, 2006
Trade Secrets
Unfair Competition
 Paris Art. 10bis
(1) The countries of the Union are bound to
assure to nationals of such countries effective
protection against unfair competition
(2) Any act of competition contrary to honest
practices in industrial or commercial matters
constitutes an act of unfair competition
 Paris Art. 10ter
(1) National treatment
(2) Right to sue
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Unfair Competition
TRIPs Art. 39 (protection of undisclosed information)
1. In the course of ensuring effective protection against
unfair competition as provided in [Paris] Article 10bis,
Members shall protect undisclosed information.
2. Private right of action to prevent “information lawfully
within their control from being disclosed to, acquired
by, or used by others without their consent in a manner
contrary to honest commercial practices”
(a) is secret, [not] generally known among or readily
accessible to persons within the circles that normally
deal with the kind of information in question;
(b) has commercial value because it is secret; and
(c) has been subject to reasonable steps to keep it secret
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Trade Secrets
Uniform Trade Secrets Act
"Trade secret" means information, including a formula, pattern,
compilation, program, device, method, technique, or process, that:
(i) derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable
by proper means by, other persons who can obtain economic value
from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
"Misappropriation" means:
(i) acquisition of a trade secret of another by a person who knows
or has reason to know that the trade secret was acquired by
improper means; or
(ii) disclosure or use of a trade secret of another without express
or implied consent
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Trade Secrets
 Restatement Of The Law 3d--Unfair
Competition
 Lanham Act, §44 (15 USC §1126)
(h) Protection of foreign nationals against unfair comp’n
Any person [designated in this section] shall be entitled
to effective protection against unfair competition, and
the remedies provided herein for infringement of marks
shall be available so far as they may be appropriate in
repressing acts of unfair competition
Does this satisfy TRIPs 39?
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Trade Secrets
 Economic Espionage
Crim Code Ch 90—Protection Of Trade Secrets
18 USC §1831 (on behalf of foreign agents)
18 USC §1832 (theft of trade secrets)
18 USC §1836 (civil proceedings brought by US AG)
18 USC §1837 (conduct outside the United States)
(1) If defendant is resident of, or incorporated in, US
(2) an act in furtherance of the offense was committed in
US
Does this satisfy TRIPs 39?
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Pharmaceutical Development
 Typical steps in drug development
Design and Discovery
Theory and Experiment design
Selection/refinement of compounds & targets
High Throughput Screening (compound library)
Preclinical - in vitro
Laboratory testing (cell culture, etc)
Preclinical - in vivo
Animal testing (small animals, primates)
 Using Good Laboratory Practices (GLP)
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Pharmaceutical Development
 Typical steps in drug development
Clinical
Phase I - close monitoring of healthy subjects
 Toxicology (side effects), pharmacokinetics (course
through body), and pharmacodynamics (effect on body)
Phase II - testing for clinical efficacy ( subjects)
 IIA - dosing requirements
 IIB - efficacy
Phase III - random control trials ( subjects)
 IIIB - expansion testing (additional drug uses)
Phase IV - post-approval surveillance (if required)
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Non-Disclosure
 Trade Secret
Proprietary interest in generated data
Ruckelshaus v. Monsanto, 467 U.S. 986 (1984)
Trade secrets may constitute 5th Amd property
under state law
Disclosure by EPA may constitute a “taking”
If data submitted and disclosed as a clearly-stated
condition for regulatory approval, then no taking
 “Unconstitutional conditions” doctrine
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Exclusivity
 IP protection for test data?
Functional facts ineligible for ©, patent, TM
Database contents, not design elements
 Arguments for sui generis protection
Familiar incentive theory (high development cost)
Natural rights and fairness (avoid free-riders)
 Counter-arguments
First mover advantage is incentive enough
High pharma returns; exclusivity unnecessary
Economic inefficiency (externalities)
Duplicative testing is unethical
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Exclusivity
 US
5-year exclusivity for new drug registrations
Public Law 98-417 (“Hatch-Waxman” Act, 1984)
 Also extends patent term for time of regulatory approval
 Abbreviated New Drug Applications (ANDAs) (generics)
Data can’t be used for generics (by agency/competitor)
 Applies also to the drugs themselves, irrespective of data
 Even if drugs non-patentable (biologics, funding terms)
 NAFTA Similar to US - 5-yr minimum term
 EU
Council Directive 65/65 & 87/21 6-10 yr term
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TRIPs Art. 39(3)
 Undisclosed test data
Where origination involves considerable effort
 Submitted for regulatory approval
Pharmaceuticals, Agricultural Products
 Shall be safeguarded against
Unfair commercial use
Disclosure
Except where necessary to protect the public
Unless protected against unfair commercial use
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Public Health & Fairness
 Does non-disclosure endanger public
health
Suppression of contra-indicators by applicants
E.g., Vioxx
Non-disclosure facilitates substandard drugs
Impedes patient profiling
 Doha Declaration
Circumvention of patent rights to protect PH
Compulsory licenses (incl. importation)
Exhaustion determined by each country
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BP v. Formosa Chemical (2003)
 Facts
Plant and equipment design of BP predecessor
misappropriated by Chinese licensee CPDC
Design used by FCFC in its bids to fabricate
equipment for plant construction in Taiwan
All bid packages delivered & meetings in Taiwan
FCFC has other (unrelated) contacts/sales with US
 Personal Jurisdiction
Fails Burger King
Tortious conduct - Taiwan
test for minimum
Injury (& residency) - Britain contacts - No PJ
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BP v. Formosa Chemical (2003)
 No PJ problem with BP v. JOC (PPB in NJ)
Apply “long arm” statute of forum state (NJ)
 Standard for Preliminary Injunction
Irreparable injury
sliding
scale
Likelihood of success on the merits
 Claims
Lanham Act § 44
Implementing Paris
State-based trade secrets law
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BP v. Formosa Chemical (2003)
 NJ Law on Trade Secrets
Commercially valuable proprietary information
Pl undertook reasonable security measures to
protect its secrecy
Def tortiously acquired the information
E.g., disclosure by one w. fiduciary responsibility to
maintain confidentiality + knowing use by Def
 Taiwan Law on Trade Secrets
No general employee nondisclosure obligations
Must be specific Non-Disclosure Agreement (NDA)
Single unauthorized disclosure terminates TS
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BP v. Formosa Chemical (2003)
 Choice of Law Issues
Which law applies - NJ or TW?
 Conflicts of law - Restatement factors:
Where injury occurs
Where tortious conduct occurred
Especially important in unfair competition cases
Less important in misappropriation of trade value
Domicile, nationality, PPB of the parties
Situs of parties’ relationship, if any
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BP v. Formosa Chemical (2003)
 “Whole Law” of the forum
NJ looks to which state has a more “substantial [governmental] interest” in the litigation
If TW, NJ courts will apply TW “internal law”
NJ interest is minimal since no connection to case
except residence of one party (JOC)
 Conclusion on PI
Since factual dispute remains on TW law, error
for DC to issue PI
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