WHAT ARE THE STEPS TO PROTECT TRADE SECRET UNDER THE NIGERIAN LAW
Trade Secret is an aspect of intellectual property that seeks to protect the know-how of a particular trade towards enhancing such trade and commerce.
WHAT ARE THE STEPS TO PROTECT TRADE SECRET UNDER THE NIGERIAN LAW
Trade Secret is an aspect of intellectual property that seeks to protect the know-how of a particular trade towards enhancing such trade and commerce. In simple terms, a trade secret is any information that allows you to make money because it is not generally known.
The United States of America’s Uniform Trade Secrets Act defines a trade secret as any information, including a formula, pattern, compilation, program, device, method, technique or process, that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means, other persons who can obtain economic value from its disclosure or use. Simply, a trade secret is valuable because it is kept secret.
In Nigeria like some other Common Law countries, trade secrets are recognized and used but there is no legislation regulating them. In other jurisdictions there are specific legislations such as the Uganda Trade Secret Protection Act 2009, the United States of America’s Uniform Trade Secrets Protection Act 1985, the Defend Trade Secrets Act 2016 and Article 39 of TRIPS. The implication of the lack of legislation on trade secrets in Nigeria is the absence of any delineated contour on what can be classified as trade secret and the absence of any official retaliation for trade secrets theft or breaches.
According to the World Intellectual Property Organisation (WIPO), protecting Trade secret will help to: ·
Maintain and promote standards of commercial ethics and fair dealing;
Provide an incentive for businesses to innovate by safeguarding the substantial time and capital invested to develop competitively advantageous innovations, both technical and commercial, and especially those that are not patentable or do not merit the cost of patenting; and
Prevent competitors from using these innovations without having to shoulder the burden of costs or risks faced in developing the innovations.
The legal issues resulting from trade secrets are multidimensional. These issues include; breach of consumers right, corporate espionage, trade secrets theft and criminal concealment, among others.
STEPS TO PROTECT TRADE SECRET
Trade secrets, which is another name for sensitive information in some jurisdictions, are lost once the secret becomes public knowledge. Once lost, the protection is gone forever. The law relating to trade secrets is scrappy in nature in Nigeria. Despite the increase in the number of technology-driven start-ups in Nigeria, the regulation of Intellectual property is still limited to Patents, Designs, Copyright and Trademark.
In Nigeria there is no definite legislation protecting or regulating trade secrets in Nigeria,
EXTRA EFFECT TO PROTECT SUCH TRADE SECRET
It is advisable that the originator of such trade secrets has to put in extra effort to protect such from being disclosed to a third party or the entire world.
CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT
Another step to protect Trade secrets is through confidentiality/non-disclosure and non-compete agreements. The employer/licensor of the trade secret executes a Confidentiality/Non-disclosure Agreement (CNDA) with every employee and contractor of the business, most especially those exposed to or who come in contact with and may have knowledge of such trade secret. Alternately, a properly worded non-compete clause could be included in the employment, service or other contracts (as the case may be), to protect the interest of the originator of the trade secret, in the event of disengagement by resignation or dismissal from service.
This was the case in Andreas Koumolis v Levantis Motors Limited, where the Supreme Court held that it could reasonably be inferred from the surrounding circumstances, that the appellant (a former employee of the respondent) had utilized the trade secrets of his ex- employer upon his assuming duties with a competitor company, located in the proximity of the respondent's address. The apex Court further held that the restrictive clause which read that the former employee will not for “a period of one year undertake to carry on either alone or in partnership nor be employed or interested directly or indirectly in any capacity whatever in the business of Merchants Engineers or any other business carried on by the Company within a radius of fifty miles from any Trading Station in West Africa” was reasonably necessary for the protection of the business interest of the respondents (former employer) and therefore valid and enforceable in law.
STRONG PASSWORD AND ENCRYPTION MANAGEMENT: Ensuring all computer works are secured with passwords to restrict indiscriminate electronic access. Also, make sure you practice s strong encryption management.
NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com
WRITTEN BY CHAMAN LAW FIRM TEAM
EMAIL: chamanlawfirm@gmail.com
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