Innovation costs time and money. Falling and getting up again means you must keep reinvesting. Especially if the market potential or the chance of imitation is high, and you want to ensure your invention is properly protected. You can achieve that through a patent but also with a non-disclosure or a combination of both. Because you also want to prevent information from being disclosed even before your patent application has been filed.
Our experts can advise you on making the right choice. And they would be happy to help with patenting, protecting know-how or establishing agreements in a non-disclosure agreement (NDA) or cooperation agreement.
In a cooperation agreement (R&D agreement) it is a good idea to record who contributes what knowledge, what it may be used for, and how any jointly developed knowledge is handled. You may also want to include agreements on possible patent applications, the name or names under which the invention will be registered, the cost sharing of the patent application, portfolio management, possible licensing, enforcement, and transfer.
If you don't have an agreement in case of a joint innovation, the Dutch Patents Act determines that the cooperating parties are jointly entitled to a patent (50/50). In addition, joint owners are not allowed to independently grant licenses to other parties. You may, however, transfer your own share in the patent without permission. Other than that, not much is regulated by law and that can cause difficult situations. For example, both owners will have to agree on every decision during and after the creation of the patent. Consider, for example, the choice of country or the interests in patent infringement. Make sure to take a good look at the various interests in advance to determine an appropriate agreement.
Protection of know-how
Confidentiality is often applied to information of a technical nature. But other types of information referred to as ‘know-how’ are also covered by trade secrets. Think for example of administrative or commercial information. This can be extremely broad; from recipes to building plans, and from supplier lists to business strategies.
Trade Secrets Protection Act
In Europe, trade secrets are protected by the EU directive that is elaborated in the Netherlands in the Trade Secrets Protection Act. Similar laws and regulations exist in other parts of the world. The EU directive lists three requirements for information to be considered a trade secret:
- The information is ‘secret’, which means that it is not publicly known and only easily accessible to people in relevant circles (for example, engineers in the case of technical information, salespeople in the case of customer data, etc.).
- The information has commercial value because it is secret (that is, the information would lose its value if it were no longer secret).
- ‘Reasonable steps’ have been taken to keep the information confidential.
In the event of a dispute, these criteria are checked to determine whether the information was indeed a trade secret and therefore merits legal protection. Should it become clear later that the trade secret has been unlawfully obtained, used, or published, the law provides for financial compensation and other measures.
What the ‘reasonable measures’ in point 3 of the EU directive are depends strongly on the specific situation. The risks associated with the loss of confidentiality are also taken into account. Contractual provisions such as NDAs and provisions in the employment contract often form the basis. Another measure is to physically and/or electronically restrict and control access to the information. But secrets are not always revealed on purpose. That is why the most important measure is internal awareness. Make sure people know what sensitive information is; a simple stamp with the word Confidential on a document already helps. But also think of organizing staff training on how to deal with confidential information.
Get started with a checklist
The Trade Secrets Checklist gives you insight into the 10 most important focus areas to adequately protect your trade secrets. Our experts will be happy to advise you on the measures required to protect your trade secrets. To ensure these measures follow the developments of your company, it is advisable to regularly review and update them.