TRADE SECRETS – BALANCING PROTECTION AND  DISCLOSURE

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Published On: 5th May, 2024

Authored By: Vanya Garima Kachhap
Faculty of Law, University of Delhi

As is well known, the protecting of trade secrets is a fundamental deep to fostering growth, innovation, and maintenance of competition in the world of business. That being said, this protection needs to be in balance with the need to disclose in certain situations, be it for legal compliance, the safety of the public or any other reason. Through the years, variations of cases have come into being, highlighting the delicacy of the equilibrium amid safeguarding the trade secrets and the need or necessity to disclose information. By going through these cases we hold to gain insightful information into the guiding principles of the crossing paths of trade secrets protection and the requirement of disclosure in the field of intellectual property law.

There are a few cases that illustrate the importance of the balance that protection of trade secrets gives out with the disclosure of necessary information for the sake of safety reasons, legal reasons, or public interest reasons. Discussion ahead in the immediately subsequent paragraphs would be of the same discourse. Here are a few of legal cases to understand the blend of protection and disclosure, highlighting this balance between the two.

Starting this discussion off with the case of :

  1. Coca-Cola Co. v. Koke Co. of America (1916) – This case is about Coca-Cola suing Koke Co. of America for infringement upon its closely guarded trade secret formula . The Coca-Cola company kicked off a legal action suit against Koke Co. of America, for allegedly infringing on its secret sauce of the trade. Coca-Cola Cola which was and is known around the world for its iconic drink, asserted the fact that its formula was comprised of a valuable trade secret that was closely guarded to keep up and maintain its edge on the competition of the market place of the beverages. The case ran around in proving if there was an unlawful acquisition and utilization of the Coca Cola company’s proprietary information which would have the company’s intellectual property rights in violation.

The court’s proceedings were seen circling on the definition of and the protection of the secrets of the trade which lay within the frame of intellectual property law. Coca Cola argued to safeguard its formula as it was highly essential to the operations of their business. Whereas on the other hand, Koke Co. of America presented counter arguments stating that the formula was not sufficiently protected as a trade secret of that sort should have been and therefore considered a fair game to be used in the products of their own.

During the course of the entire proceedings, the evidence that was presented by both parties was examined by the court very thoroughly which weighed the significance of trade secret protection against the principle of fair competition. It was ultimately seen that the court had rendered a decision that underscored the importance of safeguarding the trade secrets as elements of intellectual property that are indispensable in its bearing.

 The court ruled in favour of Coca-Cola, which affirmed the company had the rights to protection of its confidential information from the use of unauthorised disclosure, emphasising on the importance of protecting trade secrets as they are valuable intellectual properties. The court’s decision underscored the importance of the same, which is the importance of protecting trade secrets as a valuable intellectual property. Setting precedents for future cases that involve misappropriation of proprietary information.

ANALYSIS :

The judgement given in this case of Coca Cola Co. v. Koke Co. of America, exemplifies the nuanced approach that the courts must take while they are addressing to the balance amidst the disclosure and protection of the trade secrets while also acknowledging the need for fair competition. Court sought to prioritise the preservation of the Coca Cola Co.’s proprietary information while also considering the importance of it as a very valued asset. The case sought to underscore the spread of the legal principles that govern the intellectual property law while pointing the importance of striking a delicate equilibrium between protecting of trade secrets and working on necessary disclosures for the legality, safety or interest of public reasonings.

  1. E.I. DuPont de Nemours Powder Co. v. Masland (1917) – This case deals in DuPont suing Masland regarding misappropriation of its trade secrets relating to the production of smokeless gunpowder. The court’s ruling was in favour of DuPont, it affirmed the company’s rights of protection of its confidential informations moreover also granting an injunction with the purpose to further prevent disclosing or using of it by Masland. The court held against Masland for unlawfully acquiring DuPont’s Tradesecrets. The case revolved around DuPont’s efforts of protecting all its confidential bits of information from coming out from unauthorised usage. Court ruled in favour of DuPont , this decision also underscored the importance of protecting of trade secrets and also fostering innovation while also maintaining competitiveness in the business scene.

The case raised significant and critical questions regarding the delicate balancing of protecting trade secrets and the need to be disclosing in certain situations.DuPont argued for the preservation of the confidential intel, asserting that the unauthorised usage of the trade secret by Masland threatens its competitive position while undermining its efforts in innovating and researching.

Court after thorough examination affirmed on the company’s rights to safeguard its trade secrets from the unauthorised usage and disclosure of the same. The judgment seeks to emphasise the importance of protection in such cases as it helps in fostering innovation and maintains competition too, in the market. While upholding intellectual property rights of Dupont , the court also reinforced all of the legal protection and recognition that was awarded to trade secrets that in turn set the precedent for the cases in the coming future which would be inclusive of the proprietary information’s misappropriation.

ANALYSIS

The court’s judgement in this particular case undertones the importance of getting to balance out the delicate in between of the safeguarding of the trade secrets and facilitating of the needed disclosure for the many reasons that include also, public interest, legality and safety. While it also highlights the broader legalities that rule over the intellectual property law, it also insists the importance of protecting the business confidentialities because they’re the vital assets which are important for the fostering of innovation.

  1. Kewanee Oil Co. v. Bicron Corp.(1974) – The case is known for addressing the delicate balance between trade secret’s protection and safety concerns of the general public . Bicron Corp. was seeking after for the prevention of the disclosure on its trade secrecy, however court ruled that information as such could easily be revealed if need be for the sake of prevention of a clear and current danger to life or wellness, that’s also emphasising the utmost importance of the welfare of public over the area of trade protection in certain circumstances.

Here we see the dispute that circles around the delicate balance of protecting the trade secrets and also the need for the disclosure . The case sought to raise critical significant questions in regards to the extent of which the secrets of the trade could have disclosures in order to evade dangers to life . Bicron Corp. wanted to prevent the disclosure to which it argued that the information constituted of valuable intellectual property that deserved protection. However the Kewanee Co. asserted on that the disclosure of certain secrets was indeed a necessity to be stressing on the potential safety concerns that were related to the use of its products in surveying of the well operations.

ANALYSIS

Arguments brought forth by both the parties were carefully considered and after the consideration of which the court ruled the decision in favour of the Kewanee oil Co. The decision of the court holds utmost importance as of public welfare over trade secret protection in certain circumstances. The court ruled that trade secrets could possibly be disclosed if the need be in order to evade clear or present dangers to health or life, thereby holding firmly the delicacy of the balance between protecting secret information and advocating for necessary disclosures keeping public safety at the top.

The decision taken here in this case shows up the nuanced take that the courts must take while addressing the closing over of trade secrets protection and safety concerns of the public.

  1. Ruckelshaus v. Monsanto Co. (1984) – This was a notable case regarding the Environmental Protection Agency (EPA) that invoked the authority under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) in order to compel Monsanto Co. for the disclosure of trade secrets which were in relation to pesticide formulations. What court upheld were the actions of EPA’s which emphasised the need of balance in trade secrets protection that came with the interest of public in ensuring the efficacy and safe regulation of products.

ANALYSIS

The case put forth complex questions regarding the balance between protecting of the secrets of the trade and the interest of the public while also making sure of the regulation of the products. Monsanto argued that the disclosing of its trade secrets would most definitively put under the radar its competing advantage and rights. Regardless EPA asserted that such disclosure was needed for it to understand and evaluate the safety concerns and impact that Monsanto’s pesticides would cause to the nature .

After a thorough consideration of the arguments that were given by both the parties , there court ruled and upheld that the EPA had authority to be compelling Monsanto to disclose the trade secrets that came under FIFRA. The judgment showed importance to the public health and safety more than  the trade secret protection.

CONCLUSION

In conclusion, the cases that we’ve discussed above viz. Coca Cola Co. v. Koke Co. of America (1916) DuPont de Nemours Powder Co. v.  Masland (1917) , Kewanee oil Co. v. Bicron Corp. 1974 and Ruckelshaus v. Monsanto Co. (1984) all of these cases combined , illustrate the balance that we have been talking about repeatedly through the course of this article.

These cases have an undertone of what one may understand as a collective reaching towards understanding the brilliance that the equilibrium of the two sides have. Which is, discourses of information and protecting of the trade secrets as rights of the holder. One one hand where some of the cases highlight the importance of protecting of trade secrets as an important step to facilitate the creativity in the market and also to maintain the competition in the market similarly on the other hand it also puts the trade secret protection rights on the backseat to prioritise public health and safety. The intersection of these two kinds of variations of serving people is why the balance between the two infatuates one.

The immediately preceding discussion of the leading cases give a run through and illustrate the complexities that arise amidst the interplay of the respected horizons while safeguarding trade secrets , involving the necessity of disclosure in all of the legalities, safety in addition to the contexts of public interest. These cases provide intrinsic insights into the ever evolvements of principles that govern the protection and disclosure that cover confidential business information that come in the ambit of the framework of intellectual property law.

CITATIONS

  1. Coca-Cola Co. v. Koke Co. of America (1916):
  • Citation: Coca-Cola Co. v. Koke Co. of America, 254 U.S. 143 (1916).
  • Available at: Coca-Cola Co. v. Koke Co. of America – Legal Information Institute.
  1. E.I. DuPont de Nemours Powder Co. v. Masland (1917):
  • Citation: E.I. DuPont de Nemours Powder Co. v. Masland, 244 U.S. 100 (1917).
  • Available at: E.I. DuPont de Nemours Powder Co. v. Masland – Legal Information            Institute.
  1. Kewanee Oil Co. v. Bicron Corp. (1974):
  • Citation: Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974).
  • Available at: Kewanee Oil Co. v. Bicron Corp. – Legal Information Institute.
  1. Ruckelshaus v. Monsanto Co. (1984):
  • Citation: Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984).
  • Available at Ruckelshaus v. Monsanto Co. – Legal Information Institute.

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