Protection of Trade Secrets

Posted on May 30, 2018 in Intellectual Property (Tags: Trade Secrets, Intellectual Property, Trademarks, Patents) Intellectual Property.jpg

Protection of trade secrets in the modern era is as indispensable to business as coal is to Newcastle.  Many businesses have valuable IP which may not be protected by one of the forms of registered IP protection, but which is still fundamental to the business’ value.

In New Zealand, the Intellectual Property Office (IPONZ) grants and registers intellectual property rights including: trademarks, patents, designs, plant variety rights, and geographical indications.


While as things stand, New Zealand’s protection of trade secrets is not enshrined in statute, there is case law which is concerned with the breach of commercial confidences.


Having a trade secret protection strategy - apart from being sound commercial practice - guards against the possible misappropriation of that precious invention or business practice you've spent countless time and money developing.


There is an internationally significant development in the protection of trade secrets which may ultimately impact on New Zealand businesses.


From June 9, an EU Trade Secrets Directive will apply, a landmark step in creating a single market in the union.  EU member states and companies trading within them must take far-reaching steps to keep sensitive information secret, including potentially having to demonstrate that they have done so in court.


One significant component of the directive for businesses is that company employees will have the ability to bring any knowledge and experience gained during their tenure with a company to their next employer.  This is very favourable to employees and could potentially destroy a business’ competitive advantage.


This should encourage companies not in the habit of requiring their employees and contractors to sign non-disclosure agreements to ensure they are pro-active in doing so.

These confidentiality agreements should cast a broad net to include all collaborators involved in the development of IP, whether they are employees, independent contractors, or just mates.


They should be developed from the outset of any collaboration and contain clear contractual guidelines.


This is important in assuring potential investors in the commercialisation of the idea that ownership of the IP is clearly established and unambiguous.


The welcome news last week that New Zealand and the EU are to develop a free trade agreement, means that local companies and institutions have even more incentive, in a post-Brexit area, to be thinking more strategically about trade secret protection.

This is because intellectual property protection is often a key component of bilateral trade deals, and is likely to feature in any NZ-EU deal, especially with the directive due to come into force soon.




Sally Peart