3.2 Secrets and disclosures
All, except sometimes that protected by , is initially a secret known only to the creator and any associates. A trade secret is IP that is kept secret from the public long-term, as a deliberate protection mechanism. A trade secret cannot co-exist with granted legal protection for the same IP, because that IP is placed in the public domain during the grant process.
Examples of famous trade secrets are the recipes or formulae for Kentucky Fried Chicken, Coca Cola, Listerine, and WD-40.
IP is ‘disclosed’ when it is disseminated publicly in anyway, anywhere, by anybody, at any time. Disclosures may include:
- a verbal discussion, including presentations on the university campus
- conference presentations or posters
- journal, magazine, newspaper, or noticeboard articles
- posts on the internet, social media or the university Intranet
- any commercial sale of a product or service based on the IP
- draft papers or abstracts submitted to journals or conference organisers, and
- descriptions included in funding applications
A ‘prior disclosure’ occurs when the disclosure pre-dates either an application for legally registered IP protection, or the documentation of IP for automatic legal protection. When this happens, the application or the documentation lacks novelty, so the subject is not IP and protection of any type is ruled out.
Prior disclosures are highly unfavourable to, who lose the competitive advantages of IP protection that make successful IP more likely. Researchers and students should seek the advice of the university’s technology transfer office (TTO) as soon as they believe they have developed any potential IP.
If done properly, the IP protection process does not stifle the academic process by preventing dissemination of research results. It just requires that any application for legally registered IP protection precedes any disclosure through academic publication or networking.
Non-Disclosure Agreements (NDAs)
Dissemination of IP under a Confidentiality Agreement or Non-Disclosure Agreement (NDA) is not a disclosure because it’s not public. Under common law, an NDA helps to maintain an IP’s secrecy, which is essential to keep other IP protection options open. NDAs facilitate discussions between creators and potential external collaborators or funders who need to know the details of the IP.
Most university employment contracts effectively include NDAs as confidentiality clauses, restricting researchers and other employees from disclosing their IP without the permission of, for example, their Head of School or the university TTO.
When is a trade secret a good protection option?
Advantages of a trade secret over alternative protection options:
- relatively inexpensive, particularly compared with patenting
- unlimited term, in principle
- no jurisdictional limits, in principle, and
- flexible – IP content is not set (unlike patents in particular).
- relies on NDAs and similar agreements for legal rights, which can be difficult to enforce
- competitors may deduce the IP by reverse-engineering a product based on it
- secrecy is rarely assured which may discourage external investors, and
- if the commercialisation falters, delaying IP disclosure, society may not benefit from the IP.
Consequently, trade secrets work best for:
- commercialisation conducted in-house by the same organisation that developed the IP
- IP with small or indeterminate value that does not justify the cost of legal IP protection, e.g. mobile phone apps and other software algorithms, often developed by undergraduate students, and
- IP with a short useful lifetime because its field of use is evolving rapidly.