Sally Yoon is an IPilogue Writer, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law School.

, Xiaorong You, a former employee of the Coca-Cola Company and Eastman Chemical Company was sentenced to 14 years in prison and made to pay a $200,000 fine for a scheme to steal trade secrets, engaging in economic espionage and committing fraud. Matthew G. Olsen emphasized that the sentence not only reflects the gravity of the offence but also a“commitment to protect [the] nation’s security by investigating and prosecuting those who steal US companies’ intellectual property.”

Between 2012 to 2018, You worked as the Principal Engineer for Global Research at Coca-Cola in Atlanta and the packaging application development manager at Eastman Chemical Company in Kingsport, Tennessee, which granted her explicit access to valuable trade secrets related to the “formulations for bisphenol-A-free (BPA-free) coatings for the inside of beverage cans.” Several other chemical and coating companies also owned the trade secret and its development cost nearly $120 million.

You the trade secrets to set up a new BPA-free coating company in China with Weihai Jinhong Group, her Chinese corporate partner, where both parties received millions in grants from the Chinese government to support the new business. In addition to the grant money, You also received the “”, a Chinese government program aimed at attracting scientists and engineers abroad. At , You’s application for the program revealed her intentions to not only benefit her corporate partner, but also the governments of China.

, BPA is still used in the linings of the company’s beverage cans, as well as other packaging, to preserve the quality and taste of the drink. The company further maintains that for potential health risks resulting from BPA in the company’s products is based on “sound science” as there is a clear scientific consensus that the miniscule amounts of BPA in beverage cans poses no risk to the public. Nonetheless, the company has publicly stated that it is undergoing research for BPA-free alternatives in preparation to protect its consumers’ and .

Economic espionage has profoundly affected the US economy. In fact, the estimates that trade secret theft costs the US economy at least $180 billion annually. Despite Canada’s sizeable economic difference from the US, the maintains that its advanced and competitive economy and close economic partnership with the US makes Canada a continuing target of hostile foreign state activities. Moreover, according to the , CSIS observed an increase in the scale and scope of espionage and foreign interference threats. Often, such threats become exponentially more complex and pressing in light of , as it can be difficult to establish the nexus between an accused and a foreign government. In addition, foreign states can target members of vulnerable groups, posing a risk not only to the Canadian economy but also the overall safety of Canadians.

Both Canada and the US must continue to diligently investigate and identify the threats of espionage targeting innovation and intellectual property in its various sectors. Moreover, Canada should continue to work with and refer to its domestic and international partners to determine reasonable punishments for similar criminal acts threatening valuable IP in the country.

The post Former Cola-Cola Employee Sentenced to 14 Years in Prison for Trade Secret Theft appeared first on IPOsgoode.

Emily Chow is an��IPilogue��Writer and a 2L JD Candidate at Osgoode Hall Law School.��

To read part 1 of this article, click .

In September 2020, against former UBC employee and Open Education Librarian Ian Linkletter for tweeting�� links to Proctorio's Help Centre YouTube videos for instructors and taking a screenshot of the website. In its lawsuit, Proctorio sought a declaration that Linkletter infringed its copyright, circumvented technological protection measures, and breached confidence. The company was also granted an interim injunction preventing Linkletter from sharing further links and videos from their websites.

Linkletter defended his actions, admitting to the tweets but denied copyright infringement or breached confidence. In his defence, he also identified the Proctorio lawsuit as part of a growing trend of "SLAPP" litigation — Strategic Lawsuits against Public Participation — intended to deter and ultimately silence outspoken critics and inhibit participation in public affairs.

On March 11, 2022, the decision was released, written by Justice Milman of the BC Supreme Court. The issues at stake were whether the action should be dismissed under s. 4 of the BC and if the injunction should remain in its present form.

Breach of Confidence

Section 4 of the PPPA states that the applicant may apply for a dismissal order on the basis that the proceeding arises from an expression made by the applicant, and that the expression relates to a matter of public interest. The leading case for interpreting this section is , where the first branch of the test requires an applicant to demonstrate on a balance of probabilities that the action arises from one's expression that "relates to a matter of public interest" (Pointes at para 23). If successful, the action must be dismissed unless the other party can demonstrate that (1) there are grounds to believe that the action has substantial merit; (2) the applicant has no valid defence; and (3) the harm suffered as a result of the expression is serious enough to outweigh the public interest protecting the expression.

Proctorio did not dispute the fact that the ongoing debate of the impact of its software was of public interest; rather, it focused on Linkletter's supposed malicious intent and sharing of confidential links. Milman J. was not persuaded on this point, stating that "[Linkletter] was using the content of the videos in an effort to illustrate his point about the harm that Proctorio's software was capable of causing to some students" (para 50).

Milman J. then proceeded to discuss the merits of Proctorio's case against Linkletter, assessing whether the tweets constituted a breach of confidence. On the one hand, he found that Proctorio's choice to host the help videos on a website such as YouTube over other secured options weakened the case that the information Linkletter tweeted out was confidential. However, he also considered that the unlisted videos were accessed through Proctorio's Help Centre, which Linkletter entered through the instructor sign-in portal and was thus subject to Proctorio's Terms of Service that restricts sharing. Milman J. found that Proctorio met its burden under s. 4(2)(a) of the PPPA to show there were grounds to believe that its claim for breach of confidence has substantial merit and that there are no valid defences to it (para 83).

Copyright Infringement and Fair Dealing

Proctorio, as a copyright owner under , argued that hyperlinking to the unlisted videos constituted an infringement of their copyright. Milman J. agreed, noting that the links were only accessible via the Help Centre for users logged in as accredited instructors or administrators. With regards to the tweeted screenshot, Linkletter successfully argued that the image was not "a substantial part" of the copyrighted work in which the Copyright Act's s. 3 protects.

Lastly, Milman J. discussed Linkletter's defence on the basis of fair dealing (s. 29 of the Copyright Act) and non-commercial user generated content (s. 29.21). Whether or not a dealing is "fair" depends on the purpose, character, and amount of the dealing, as well as possible alternatives, the nature of the work, and the effect of the dealing.

Milman J. accepted that Linkletter's real purpose in copying the links to his Twitter feed was to demonstrate his point about the harm he believed Proctorio's software was causing students, arising out of a genuine sense of public duty rather than malice (para 107). However, he was unable to conclude that it was necessary for Linkletter to share all the videos he did in order to make his point. He also found that Proctorio had a legitimate interest in keeping the instructional materials private only to instructors and administrators. In sharing the links, Milman J. found that Linkletter created a risk that Proctorio's product would be rendered less effective for its intended purpose (because students would be able to anticipate how instructors configured Proctorio's invigilation settings) and that its proprietary information would be made more readily available to competitors (para 112). These risks were found to be unlikely to materialize and mainly speculative.

The Status of the Injunction

Milman J. found that the injunction granted to Proctorio was granted in overly broad terms, and the injunction ought to have been framed more narrowly so that it prohibited "no more than the conduct [Milman J.] found to be properly actionable, namely, Mr. Linkletter's public sharing of materials posted on the Help Centre and Academy webpages, and encouraging others to do so" (para 145).

Conclusion

In summary, success for each party was divided. As of April 13, 2022, Although the resolution is still unclear, it is certain that this case — — has about the ethics of AI-powered invigilation methods worldwide.

Further Reading

Linkletter's defence and GoFundMe (donations closed):

The New 91��ɫer's deep-dive on online test-monitoring:

The Coronavirus pandemic and surge in demand for exam proctoring:

The post Proctorio v Linkletter - Part 2 appeared first on IPOsgoode.

Meena Alnajar is an IPilogue Senior Editor, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law School.

It may be no secret that trade secrets contribute to a business’ economic value and confer a ‘competitive edge.’ However, when that secret is lost by insiders who had a duty of confidence, how can the law step in to help? On , biomedical company �ʰ��dz�é��é Biomedical LLC (“�ʰ��dz�é��é”) received no recourse or remedy for a revealed trade secret. �ʰ��dz�é��é failed to persuade the US Court of Appeals for the Eighth Circuit to revive a trade secrets against the consultant it had hired to find a buyer.

Trade secrets, unlike other intellectual property rights, are not registered nor publicly disclosed. Trade secrets require such as: value (economic/industrial), that it is kept secret, and that there are reasonable measures in place to keep it confidential. Once disclosed, the trade secret loses its necessary quality of confidence that makes it confidential and valuable to a business. Therefore, the most important element of a trade secret is that it is kept secret.

A of US trade secret litigation demonstrated that, in satisfying the court that ‘reasonable measures’ were taken, confidentiality agreements like non-disclosure agreements (“NDAs”) are most often a determining factor. NDAs are particularly useful where a company must disclose its trade secrets to fellow employees, which was the case for �ʰ��dz�é��é.

In 2017, �ʰ��dz�é��é, a biomedical company focused on blood-clotting products, entered into an agreement with the consulting firm to find a buyer. Duff & Phelps then contacted , a Managing Director at a private equity firm and a board member at Z-Medica, another medical company in the blood-clotting products space. Both Schillinger and Duff & Phelps (on behalf of �ʰ��dz�é��é) entered into an NDA. During a for the potential deal between Z-Medica and �ʰ��dz�é��é, �ʰ��dz�é��é some confidential information regarding its products to Schillinger, who then revealed the information to Z-Medica. Z-Medica then applied for a continuation of a that allegedly contained �ʰ��dz�é��é’s confidential information and pulled out of a potential deal.

�ʰ��dz�é��é sued Z-Medica, alleging that it stole trade secrets and violated NDAs. The parties there settled, but �ʰ��dz�é��é subsequently sued their consulting firm, Duff & Phelps, for breaching their contract in failing to prevent �ʰ��dz�é��é from disclosing its trade secrets. This suit was first dismissed by a court. On appeal, the Court held that their contract only required Duff & Phelps to be responsible for its . , on behalf of his private equity firm, signed the NDA, making him not liable for Z-Medica’s conduct and use of the trade secret. The Court found that disclosed its own secrets to Schillinger, so �ʰ��dz�é��é is responsible for revealing its own secrets. It is a classic case of claim construction and ambiguity in contractual agreements. This case serves as a reminder that when you ask someone to keep a secret, be very specific about whom you are asking, what the secrets are, and from whom they should be kept.��

While trade secrets are valuable and protected by law, if the company itself is disclosing that information and is not careful to track who is not obligated to keep it a secret, then the company has not taken reasonable measures to keep it confidential. If a business does not act to protect trade secrets, courts may not help either.

The post The Secret’s Out: US Court dismisses �ʰ��dz�é��é Biomedical’s Trade Secret Lawsuit Again appeared first on IPOsgoode.

Photo by Kaitlyn Baker ()

Emily Chow is an��IPilogue��Writer and a 1L JD Candidate at Osgoode Hall Law School.��

With the emergence of the pandemic, schools across the globe had to rapidly shift to new testing mechanisms in line with stay-at-home lockdown orders. Remote invigilation and AI software seemed like the tools to support instructors and prevent cheating on exams that were suddenly shifted online. However, the rise of companies like were coupled with criticisms of fully-AI invigilation systems: and , , and and algorithms quickly came to the forefront. Various penned open letters and petitions hoping to curtail the use of invasive remote proctoring software that tracks eye movements, facial expressions, spatial information, and more. Part 1 of this article series will discuss the background information pertaining to , including how the lawsuit began.

On June 25, 2020 on the University of British Columbia (“UBC”) reddit forum, instead spiraled into a confrontation with the CEO of Proctorio, Mike Olsen. Under the username artfulhacker, Olsen responded to the criticisms of Proctorio by While the responses to Olsen are intact, Olsen’s reddit account has since been deleted, along with all his inflammatory comments.

. At the time, he was employed by UBC as a Learning Technology Specialist and Open Education Librarian. He had already been looking into Proctorio’s services when the incident occurred. He called Olsen out on Twitter and Reddit, . These were taken from Proctorio’s help website for instructors.

In September 2020, Proctorio for eight tweets of links to the unlisted videos and for posting a screenshot of the help website. Aligned with Linkletter’s belief in free speech and privacy concerns in the public interest, his entire defence can be found here.

Part 2 will look at the actual decision by Milman J. from March 25, 2022 and examine the comments on free speech and fair dealing for the purpose of criticism.

The post Proctorio v Linkletter: Exam Invigilation or Invasive Surveillance? - Part 1 appeared first on IPOsgoode.

Photo by minxlj ()

Jasmine Yu is an IPilogue Writer and a 1L JD Candidate at the University of Toronto Faculty of Law.

All that glitters is not gold, but trade secrets in the sparkling world of luxury jewellery might just be worth the gold and diamonds they sell. On February 28, French luxury jeweller Cartier its competitor, Tiffany & Co. (“Tiffany”), for stealing trade secrets related to its from a former Cartier employee, Megan Marino.

Cartier’s Claims

Tiffany’s high jewelry unit was in the midst of a restructuring following several resignations. Cartier claims that their competitor’s management used “quick money and title advancement” to lure Marino away in December 2021. Further, Cartier also asserts that immediately upon hiring her, Tiffany’s President for the Americas met with Marino for the express purpose of obtaining information about Cartier. This act disregarded Marino’s confidentiality and non-solicitation contractual obligations to Cartier.

Marino, ��a named co-defendant, started working at Cartier in August 2013, and most recently served as Assistant Manager for Merchandising, Jewelry. Cartier claims that upon her hiring at Tiffany in December 2021, Marino forwarded files containing “sensitive and valuable information” related to Cartier’s high jewelry business to her personal email. These files could purportedly “allow a sophisticated competitor to replicate key strategies” and to “reverse engineer how Cartier allocates, merchandises, and prices its High Jewelry stock.” Cartier claims that this was a breach of her employment agreement, as she was to return “any and all documents” containing “Confidential Information and Trade Secrets” that she obtained in connection with her employment.

The Lawsuit

In the wake of Cartier’s repeated written notices, Tiffany fired Marino for “failing to disclose her misconduct” in February 2022. The corporation did not take any action against upper-level management, who, according to Cartier, “repeatedly and knowingly solicited and received trade secrets” from Marino and tacitly approved of Marino’s breaches of her legal obligations to Cartier.

As Tiffany continues its use of Cartier’s confidential information, such as through using such information in its internal business presentations, Cartier brings this suit. Cartier is seeking injunctive relief and damages for Tiffany’s “deliberate scheming to misappropriate and convert Cartier’s highly confidential business information to unfairly compete with Cartier.”

The Trade Secret Claim

To succeed in its trade secret claim, Cartier will need to :

• The information is in fact, secret — that it is not generally known or readily ascertainable to competitors, and confers to Cartier a competitive advantage,
• Cartier has undertaken reasonable efforts to maintain its secrecy, and
• Tiffany & Co “misappropriated” the information

Cartier gains a strong position in this case from the evidence of emails and text messages between Tiffany’s management and Marino, as well as their outreach to current Cartier employees for information. Nevertheless, Tiffany may have some strong arguments as well. For instance, to the third requirement, Tiffany may argue that Cartier did not make reasonable efforts to maintain its secrecy. What is “reasonable” is typically a cost-benefit analysis. Marino, a lower-level employee who was not directly involved in Cartier High Jewelry, could access allegedly valuable, sensitive, and restricted information.

If they acquired the trade secret by improper means or a breach of confidence, Tiffany can be considered to have committed “misappropriation”. Tiffany may be in an even stronger position if they can establish that they somehow obtained the trade secrets lawfully — through means such as independent discovery or reverse engineering.

We should look forward to seeing the Court’s take on what constitutes “reasonable efforts” to maintain the secrecy of electronic documents in the age of Zoom.

The post Shhh… Tiffany knows your (trade) secrets! appeared first on IPOsgoode.

Tiffany Wang is an IPilogue Writer, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law School.

��

In 2008, three former Motorola Solutions employees, Communications Corporation Limited (“Hytera Corp.”). The three engineers, upon leaving Motorola Solutions, shared digital mobile radio .

In February 2020, a jury in the demanded that Hytera Corp. pay more than . The Chicago federal jury’s includes $345.8 million in compensatory damages and $418.8 million in punitive damages.

The case started on its exposed trade secrets in creating Hytera’s DMR products. Hytera Corp. assembled a .

Not only did Motorola Solutions allege that Hytera violated U.S. copyright laws by copying their source code, it also complained that Hytera . Hytera .

Motorola Solutions chairman and CEO Greg Brown expressed that Hytera .

Discovery from a prior court filing revealed similarities between Motorola Solutions’ and Hytera’s products. Hytera’s source code “”. The source codes were similar to the extent that identical appeared in both.

This case represents a significant infringement of innovation and technology. Profiting from a ��market competitor’s innovations via trade secrets and source code theft misappropriates the intellectual creation and property of other firms’ investments. The significant cost awards signal the courts’ commitment to protecting the value of intellectual property and ensuring that does not lessen the integrity of intellectual creation.

The post Den of Thieves appeared first on IPOsgoode.

At the Supreme Court of Canada, Google Inc. will be searching for a more favourable ruling than it got at the Court of Appeal for British Columbia in The appeal stems from the BC Supreme Court’s granting of an requiring Google to de-index certain websites from its search results. Google applied for to the Supreme Court on September 10, 2015 after the BC court dismissed Google’s appeal in June.

The BC Decisions

BC Supreme Court Justice Lauri Ann Fenlon sided with Equustek Solutions Inc. in the original 2014 decision in , issuing an injunction requiring Google to de-index Morgan Jack’s Datalink Technologies Gateways Inc. and Datalink Technologies Gateways LLC websites. Datalink had formerly been a distributor of Equustek’s industrial network hardware, but had relabelled Equustek’s products to sell as its own and had built and marketed online a competing product using illegally-obtained Equustek designs.

Google was not a party to the original action, and complied with the plaintiff’s request to voluntarily de-index 345 URLs associated with Jack’s now-virtual company (only on google.ca). However, Google did refuse to de-index the so-called “mother sites” or entire categories of URLs associated with the company. The plaintiffs that this was insufficient and that it led to an unsuccessful game of “whack-a-mole” wherein the defendants listed their product at new URLs faster than Google could de-index them. As a result, Equustek applied for and was granted the injunction requiring much more extensive de-indexing

(Google) Mapping Jurisdiction

While Google was not a party to the initial litigation, it launched the appeal to the Court of Appeal to contend that the extraterritorial interlocutory injunction granted by the lower court over-extended the court’s jurisdiction. Indeed, the issue of territorial competence was central to the appeal (which also included concerns of comity and freedom of expression). The parties agreed that the jurisdiction of the BC Supreme Court lay in s.3(e) of the which requires a real and substantial connection between British Columbia and the facts of the case.

Finding for the respondents, Justice Groberman stated (at paragraph 41), “The most important facts on which the injunction application is based–facts concerning the violation of trade secrets and of intellectual property rights–have a strong connection to the Province.”

Justice Groberman went on to hold that the Supreme Court Justice was correct in finding in personam jurisdiction over Google based on Google’s “doing business” in BC. The judge found Google’s active search function, advertising, and data collection (“Googlebot”) sufficient. By finding territorial competence over Google, the court is effectively allowing for more expansive powers to be exercised extraterritorially over Google.

Censorship or Justice?

Google unsurprisingly raises concerns at the breadth and implications of the BC courts’ findings of jurisdiction, but Justice Groberman is manifestly unsympathetic. According to the court, Google’s fears of being open to restrictive orders from other states’ courts (friendly or otherwise) derive from “the world-wide nature of Google’s business and not any defect in the law.”

It is probably true that de-indexing on the scale of “mother sites”, rather than mere URLs, is more effective as a remedy than playing “whack-a-mole” to fend off a virtual company’s infringement of (your) products. Nevertheless, it is hard to imagine that if the Supreme Court of Canada upholds the BC courts’ jurisdiction over an enormous global search engine – with a desktop search engine market share of nearly – it will not cause the floodgates to open for (at least attempts at) extraterritorial motions to be brought against Google and other similar companies. The question is, can motions such as this be limited in scope to dealing with internet links to companies that break the law, or will the decision be a precedent for more aggressive restrictions in other jurisdictions? Clearly appropriation of trade secrets is a crime, but in many places, so are much less clear-cut issues.

Google is by no means the only company with paid local advertising, active search functions, or data collection abilities. Nor is it the only site capable of listing links to potentially illegal activities. An action like this one is not limited to Google, and it is not limited to being issued by Canadian courts. As such, the decision raises fears in some corners that a door has been opened for courts to regulate speech outside their jurisdiction. As the (EFF) submitted in their , the injunction would likely infringe on the American constitutional right to free speech (which includes internet search results).

According to the EFF, the ruling “ The BC courts were not unaware of the issue, but relied on the limited temporal nature and ability to vary interlocutory orders as a safeguard to free speech. It will be up to the Supreme Court, if it chooses to back the lower courts, to emphasize the scope and limitations of such orders, especially when they concern extraterritorial requirements. It remains to be seen, then, if fighting counterfeit GW1000 networking devices opens the door to greater judicial control over the internet.

Sebastian Beck-Watt is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School

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In the case, Mrs. Trine Sig ceased her employment as a sales and marketing assistant at Verstergaard. Along with two other former employees of the company, she formed companies to manufacture and commercialize insecticidal bednets (a product made by her former employer). Within the suit filed by Verstergaard for misuse of trade secrets, the evidence demonstrated that Mrs. Sig, while contractually obligated to maintain the confidentiality of the information and knowledge acquired while working for the company, (i)��did not have any access to technical information related to the production process of Verstergaard´s insecticidal bednets during her period of employment, and (ii) did not appreciate that the new companies misused Verstergaard´s trade secrets when developing their own products.

Given these facts, the first-instance judge .�� The judge reasoned that “a person can be liable... even if he is not conscious of the fact that what he is doing amounts to misuse of confidential information”. From this judgment, the subjective mind of the offender (actual knowledge of the trade secret and awareness of the infraction) plays little, if any, role in determining personal liability. Instead, objective knowledge of the infraction (the possibility of having access to the trade secret) in conjunction with strict liability terms implied in the contract were enough to find Mrs. Sig liable.

This decision was , which did not recognize an implied term imposing strict liability and held that there was “no business reason to imply a term of that harsh extent”. This appeal decision was upheld by the UKSC, which stressed the relevance of the previous knowledge of the trade secret by the offender and of his consciousness in the misuse of the trade secret:

“Given that she did not learn of any relevant trade secrets owned by Vestergaard when she was employed by them, and did not appreciate that any such secrets were being used by an employee of the company of which she was a founder and director, it would be oppressive to hold Mrs Sig (as opposed to the employee or the company) liable to Vestergaard for breach of confidential information, whether or not she had previously worked for Vestergaard pursuant to a contract containing a standard sort of provision aimed at protecting Vestergaard's trade secrets”.

This decision by the UKSC raises questions about objective and subjective knowledge in cases of liability for misuse of trade secrets -��the answers to which do��not enjoy sufficient legal certainty in several countries. In fact, the regulations on trade secrets at the international level do not specifically cover the extent to which parties should know of a misuse. Article 39.2 , for example, in which the protection of trade secrets is codified, does not provide details on the level of duty of care the offender would owe to escape liability. At the national level, the in the USA and Canada does not specifically rule which are the cases where a person "has reason to know" that a trade secret has been misused. In view of this uncertainty, the legislature and the adjudicators are charged to form plausible solutions from general principles of justice, which may lead to discrepancies from the applicable provisions.

In my opinion, the decision of the UKSC is equitable and appropriate.

From a legal perspective, the decision does not allow the involuntary extension of objective knowledge of breach of contract to situations in which the potential offender did not have access to confidential information and is completely unaware of trade secrets being misused. If a party does not have any knowledge of the trade secret and of their misuse, then there is no duty of care with respect to confidentiality and, therefore, that party cannot be held liable. In this case, the implicit and explicit obligations under the contract are recognizable by all parties, fully observing basic contractual principles.

At an economic level, the different interests involved in the protection of trade secrets have to be balanced in order to achieve a fair solution. On the one hand, we can not ignore the importance of the protection of trade secrets for the purpose of encouraging innovation and maintaining competitiveness in small and mid-sized companies in the market, for which intellectual property rights (like a patent) might be too costly to manage. In this sense, the European Commission stressed in its that “the protection of confidential business information as a trade secret is, for many businesses, often the only or the most effective way to protect their intellectual property” (see also ). Appropriate legal protection of trade secrets is therefore economically efficient and desirable.

On the other hand, the protection of trade secrets naturally restricts horizontal competition, since competitors may not use trade secrets obtained improperly to develop competing products and projects. An excessive protection of trade secrets��may stifle competition unreasonably, which is contrary to the purposes of competition law, and induces economic inefficiency. This, in addition to imposing strict liability for misuse of trade secrets may have negative impacts on the economy. In view of this, the UKSC held in this decision��that “the law should not discourage former employees from benefiting society and advancing themselves by imposing unfair potential difficulties on their honest attempts to compete with their former employers”.

Therefore, the subjective knowledge of the potential offender have to be considered, in order to observe the contractual principles of law and to achieve an fair economic balance of different interests when dealing with the protection of trade secrets.

Pedro Henrique Dias Batista is an IPilogue Editor and a PhD student at Ludwig Maximilian University of Munich.

The post Beyond Knowledge and Consciousness – The Development of Liability for Misuse of Trade Secrets in the UK appeared first on IPOsgoode.

It����that Myriad has been retaining clinical data concerning BRCA1/2 mutations as trade secrets, stemming from their control over BRCA1/2 research. By claiming mutation information from clinical trials as proprietary, Myriad is failing to disclose valuable information that is secondary to their patent of the initial genes, and potentially impeding research on the genes that could result in life-saving developments. This brings concerns around the circumvention of the parameters and breadth of their initial patent, as well as the convolution of the patent as a means of shrouding their company data in trade secrecy.

Typically,��; in exchange for disclosure of the information surrounding the invention (which is in the interest of furthering innovation), patent holders are granted legal protection from others using their patented invention. Trade secrets do not afford legal protection, and anyone obtaining the secrets (typically excluding those under contract) may use them freely. Of the greatest concern is that even if the BRCA1/2 patents are invalidated in court in the Spring, Myriad will still be privy to the clinical data collected under the invalid patent. Such unconscionable use of the patent system directly violates the����on which the system was built.

The primary public health consideration in Myriad’s decision to retain clinical data as trade secrets is the����that has resulted from their retention of mutation information. This is a particularly great concern, as Myriad����with BRACAnalysis. By retaining clinical BRCA gene mutation information in America, but not releasing it publicly, Myriad has ensured that consumers utilizing their test will receive more reliable results. At present, it has been reported that as a result of the vast mutation data and algorithms that Myriad has collected since releasing the BRACAnalysis test, only 3% of mutations will be of unknown significance. This contrasts unknown variant rates of 20% using other tests, including those presently in use in Europe. This means that Americans utilizing Myriad tests have a significantly greater chance of having their genetic variants identified, which is essential to therapeutic counseling. Further, as a result of this trade secret ‘loophole’ in the American patent system, which mirrors our own in Canada, Myriad will possess an inherent competitive commercial advantage over European BRCA tests despite not holding a BRCA patent in Europe. By allowing this type of action, a dangerous precedent is set in the field of biotechnological research, where research facilities may use patents as swords in order to protect vast trade secrets and monopolize a market, contrary to the public interest.

Beyond commercial interests, the primary function of scientific research in society is to serve the public good. This is particularly true in the case of medical research, as the ultimate goal is to benefit patients and improve diagnostics, treatment, and preventative medicine. Patents have become��, in order to encourage innovation and provide commercial protection and incentive for researchers who make significant breakthroughs. However, in the United States, it has been shown that����as of 2005, with most “inventors” overstating their discoveries surrounding the code, while others were granted protection for genes that had not been “discovered” yet (e.g., mutated or isoforms, with no description of the genes).

In my opinion, Myriad Genetics is a company benefitting from relatively lackadaisical biotechnology patenting standards. In addition to holding a (thus far) valid patent on the two primary diagnostic genes for breast and ovarian cancer,����through��, which has been described as the most efficient breast cancer test commercially available. Holding the American patents for the BRCA genes has ensured that Myriad has been able to turn a profit after pouring millions of dollars into research and development, and has in turn improved the diagnostic potential of medical practitioners. However, with this advancement in medicine has come at great cost to the public. By creating geographical inequalities (resulting from the limited scope of Myriad’s services), Myriad is effectively compromising the therapeutic services provided to women worldwide, solely to advance their economic interests. Thus, despite creating an incredibly useful database of mutation information and algorithms, Myriad has effectively created a monopoly, and, in my view, has violated the promotion of innovation and discovery that the patent system is designed to serve.

Their��, combined with what is regarded as an unreasonably high cost for the BRCA testing has led to allegations that Myriad is engaging in����by compromising the interests of public health in order to turn a profit. In my opinion, while the patent system certainly serves as a means of providing financial restitution to researchers and facilities that take financial risks in the interests of innovation, there comes a point when the public interest is being jeopardized out of greed. Such compromise of the public interest, especially in a medical research context, is contrary to the spirit of the patent system, which is to provide information to the public to improve transparency in innovation.

With the completion of the��, the United Nations identified the risk of abuse of advancing biotechnology, and the����took effect. Of particular importance is Article 12, which indirectly relates to gene patenting and freedom of research. It takes specific note of the unique nature of the genome, which is within all humans, and declares that the genome should be free to research in the interest of advancing bioscience and medicine. Additionally, and in my view damning to Myriad’s trade secrets and imposed geographical inequality, it declares that the benefits of advances in genetics and medical science be made available to all. Although this is not a binding legal document, it was carefully considered, is highly persuasive, and contemplates essential concepts in bioethics which may factor into the Supreme Court’s 2013 ruling.

Ryan Heighton is a JD candidate at Osgoode Hall Law School.

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The authors point out that in the age where cyber threats are growing in number and sophistication, corporations are often the victims of cyber crimes. This situation, the authors contend, presents corporations with a difficult dilemma. On the one hand, they are encouraged to cooperate with law enforcement authorities, where premature disclosure may compromise investigatory efforts. On the other hand, corporations have a duty to inform investors about significant business risks. The risks are especially prominent where a company has significant intellectual property assets. In those cases a cyber attack may be fatal to the business, which militates in favour of prompt disclosure.

For these reasons, the authors contend, there is a need for clear disclosure rules with respect to cyber crime. Unfortunately, the US Securities and Exchange Commission (SEC) has done relatively little in that respect. Authors point out that the SEC has issued����for disclosure, but failed to provide clear and binding rules. Notably, the SEC����the guidelines.

The authors briefly discuss one possible and undoubtedly only partial solution, which is to allow����The article points out that there is a strong potential for abuse if the rule were implemented. Corporate citizens are likely to rely on the rule to simply stave off disclosure for as long as possible because of its negative effect on consumer and investor confidence.

Concerns about potential abuse of the proposed solution underscore the important role fulfilled by the government in combating cyber crime. Foregoing disclosure can only be justified if it is assumed that the relevant law enforcement agencies can effectively address the issue. Investors and corporate leaders need to be assured that withholding information regarding material risks is justifiable in practice. Thus, if law enforcement is ill-equipped to deal with cyber crime, then delaying disclosure to facilitate an investigation starts to look less reasonable from an investor's point of view.

In addition, rules regarding disclosure obligations have to take into account that corporate entities often operate in multiple jurisdictions. For instance, a cyber attack that takes place in Ontario may nonetheless affect investors in another province or even abroad. A particularly problematic scenario arises where one jurisdiction may demand that a company withhold information regarding an attack while another jurisdiction demands prompt disclosure. Therefore, a coordinated and uniform approach to disclosure rules and cyber security in general should be a priority.

A brief look at����is reassuring as it reflects the foregoing concerns. Indeed, the Government explicitly recognizes intellectual property as an especially attractive target for criminals and provides��. Canada’s strategy also places heavy emphasis on cooperation among local, provincial and international partnerships in improving online security. When it comes to effective law enforcement, the Government has established the����to assist non-government systems with security issues and committed��

The problems surrounding cyber attack disclosure rules for publicly traded companies have not been widely discussed or debated domestically. Perhaps Canada is waiting for the US to take the lead on the issue in order to implement a coordinated approach; or perhaps the current state of cyber security in Canada is still in its infancy, making the debate premature. Whatever the reason, the general strategy adopted by the Government is promising to the extent that it demonstrates awareness of the issues that will inevitably affect the shape of disclosure rules whenever the time is right to have that discussion.

Anatoly Zhitnik is a JD Candidate at Osgoode Hall Law School.

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