Prof. Reichman
Trade Secret law is less understood/most fundamental and oldest yet most people do not understand
it.T.S law protects the investment directly while other intellectual property rights law protect the
investments indirectly.
The reason to give the International IPR law is that the creator can recoup his investment in R and
D and turn profits .IPR intangible .For Economists :-Intangible creations are non rival:-i.e. available
to all.
We would like that the IPR should be a public good but this type of public good cannot be
provided by the sate as we don’t trust and we need some kind of private sector to provide this type of
public good. Than the problem of misappropriation comes (Free rider).IPR tried to solve this
problem and enabled the PVT Sector to be able to provide the public good.
Trade Secrets:
Protects KNOW How (Information) but know-how may or may not be TS.Most of the
KH is in public domain.
 To get TS protection we need to keep the KH secret legally.
 Classical TS Law does not give U any specific property rights but gives u legal
entitlement.
 Entitlement:-It is an ex anti right to something .u have a right but not the exclusive rt.
 Exclusive property right:-u have the right to control absolutely who uses your
property
 Compensatory Liability Regime: Take and pay rule. If i have exclusive property right
than u must take my permission but in Compensatory Liability Regime u use my
property and pay me reasonably as agreed in advance.(Green Tulip Case).In this rule
what you need to know is that there is an ex anti entitlement and there is an obligation
to pay a reasonable royalty (depends on the use of your product).you get more money
in this rule.
 Compensatory Liability Regime do the followings:Solve the problem of small scale innovation without secrecy
It helps when the patents regime and pure competition does not work
Preserver the artificial lead time
Preserve incentive to create
Do not create the barrier to entry for any one.
Does not block follow-up invention
Through the collection societies we have low cost
Better:-Lower cost.
It does better than utility model for small scale innovation.
Good for developing countries as they are free from the governance of paris conv
and trips except national and MFN RULE)
Please note that this rule is not new rule. In patent we have compulsory licensing for dependent
patents (CROSS LICENCING) (art 31 (L) of trips ) and developing countries should enact CL
In TS,you invest money on reverse eng by honest means but if by dishonest means that TS law gives
remedy of Injunction but for a reasonable time (3/6months etc).The duration of Injunction depends
upon the product. If the product is cannot be easily reversed than the duration of injunction will be
long (e.g. coco cola) but if the product can be easily reversed eng than the injunction will be short
( e.g. :-7 UP drink).
PS:-Compulsory licensing is ex post.
TS LAW IS AN EXANTI ENTITLEMENT but not exclusive property right. It gives natural lead
time.
It is a disappearing right:-once u have reversed eng of my product. TS is over. So we put TS IN semi
commons and not in commons as it is open only to the routine engineer who take the trouble to learn
and invest the money to be able to reverse eng the product.
TS law is very good for developing countries. (ART 39 trips).no innovation without TS law. It is
natural open source technology pools.
In patents:-there is disclosure but has exclusive property right and u get the longer lead time (say 20
years.)
Problems of TS: Self revealing knowhow:-does not get the lead time(zero lead time)as it can be
reversed eng immediately.eg innovation bearing KH on its face.
 Small scale innovations.
 TS is very pro competitive:-any body can do it by reverse eng but patent is anti
competitive (protection for long)
Failure of TS: More and more valuable innovation bears no secrecy
 Zero lead time for Self revealing knowhow.
 Exposed to instant appropriation
 Solution is to give artificial lead time to replace Zero lead time.
In Raw state of affairs there is no competition and there is no lead time.
TRADITIONAL KNOWLEDGE:Tension between western and southern side.
 Western side:-if we call TK as KH than west says it is public domain and any body can use
it.
 Southern side: Our exclusive property rights like u have patents in your system.
 Pay us if you use it.
 If u take KH without our knowledge and patent it:-bio piracy
PUBLIC DOMAIN:-PD is a social contract. so countries create PD and it is not the act of GOD.
Traditional KH: If tribe wants to keep it secret. No problem but need to keep it secret really.
 If somebody takes it without the knowledge:-misappropriation under conv on Bio Diversity
(US has not signed it)
 .If tribe is willing to participate the govt effort in promotion:Need to give prior informed consent
Govt can keep the collection of KH (e.g. china)
To protect traditional KH: Historically we don’t use ipr for KH but TS Law.
 But when the trade secret breakdowns it has ceased to be a secret than can create
com.liability regime. That will do the same thing which we the TSL will do
without the requirement of secrecy.
 Under this regime:-KH is put to use-invention made-product goes to the marketpublic good done-get reasonable royalty-so no blockage of entry-any one can
enter in it and process of invention/follow on inventions are not blocked.
Whether Comp Liability regime is blocking patent? No except one when you do the wholesale
copy of the knowledge without permission.
The regime of protection of TK in public domain:-state has the total power within total boundaries to adopt whatever regime it should follow
as long as it does not violate TRIPS.(CONVENTION ON BIODIVERSITY (1992 also give
to the state the sovereignty over all genetic resources on their territory.
2-state should manage its own recourses.
3 but the problem is of developing countries as they are blocking access to these
resouses.Though this will stop bio piracy but it will also stop innovation(India and brazil are
the examples).
In case of bio piracy:-those countries (like usa) which have not signed the CBD and takes the
recourses of another countries without their permission will be liable under the customary norm of
Public international law.
ACCESS AND BENIFITSHARING PROVISION OF CBD:ISSUE:-Due to fear of commercialisation and bio piracy developing countries are blocking
research and access:-the end result will be bad.
The importance of microbiological commons in 21 century: 1-there are public depositories of microbes all over the world (like CGIR) that has been
collected from centuries and are used for research/food production/yeast etc.
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2-Now CLR is promoting the exchange of Microberial for research and benefit sharing
3society knows only 1%of the world microberial resources.
4:-good number of Mic is held in the culture collection in all over the world.
5:-this has accumulated over centuries.
6:-original principle:-it was opened to all mankind (public domain) but in the end of 20th cen
there started tug of war
 7 the cultural collections are worried about the commercial and strategic value of these. so
they developed material transfer agreement(MTS):Very restricted access even for research activities
 No redistribution without permission
 Limitation on the making of derivatives.
 Use it only in the labs.
 Need to take permission for each and every transaction.
 8:-60 cultural collections in Europe have entered the group called ECO and they are resisting
these trends. Developed its own MTA which is research friendly.
 9:-CBD (1992):-Says:-“generic recourses found in any country are subject to the sovereign
rights of that sovereign state” .
 Further the access must be on the mutually agreed term (art 15):-prior consent and obliging
benefit sharing and transfer of tec.
 CBD is further specification of 1967 declaration:-all countries signed this though they may
not have signed CBD LIKE usa.
 10:-problem and the consequences of war:-all our food recourses are dependent upon free
availability of the microberial recourses.
 Defeating research initiatives and not further study
 No free access
 Very narrow access to basic specific resources
 We all will become poor due to this.
 It is need to understand that these resources have no value except value for researches.
 11:-Due to this problem the informal sector of microbial exchange ignore this rule. They are
doing the followings: Deal “let me use ur microbes and i will let you use mine one”
 Exchange on the basis of mutual trust
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No formal agreement.
60%of material exchange is done it this formal way, behind the veil.
No MATS:-Standard norms.
Usually verbal agreement
Confidiciality:-don’t tell this to anybody.
The informal sector convert the resources into a club group and the access is allowed to
members only and not to all (Semi commons)
Problem of this system: Shrinking more with the fear of losing their potential commercial gain.
 Very fragile.
 Informal exchange id only 60%.
Result: High transaction cost.
 MTA will take more time to conclude(2 years or more)
 Enormous restriction on the freedom of research.
 Slow research very slow.
SOLUION:-FORMALISE THE INFORMAL SECTOR I A BETTER WAY: There should be standardised material agreement which should be so good that all the
research communities would have agreed to use this.
 For Enforcement:-there need to have governing body and international agreement to kick off
the pressure of CBD AND TRIPS.
 SO we are contractual construction research commons (eg creative commons licensing:-there
are 40 millions of creative commons licenses
 This is not new but it was already there in the international treaties of plants generic
recourses:- the characteristics: Participants should normally contributing materials having no known/likely high pay off
commercial value at the time of deposit.
 Criteria of high standard quality
 No restriction on research whatsoever.
 All usages must be tracked.
 Attribution and reputation of benefits must be preserved.
 Bio safety and security must be observed fully.
 Logic of the commons:-more reciprocal benefits.
 This liability rule breakdown club economic barrier.
 Though the recourses may not have the commercial value but ,ay later on turn into a
commercial value :-so need to encourage the research in the following way: Please take my Microbes-do the research-when u get patent on the end result-pay me
reasonable royalty from your gross salary.
i:-The Idea:-to build the cultural commons i the developing countries due to: To meet the international standards.
 The resources are deteritating i these countries.
 Cultural commons in OECD and Developing countries are badly kept up.
 People are new to this field. so do not know that how to keep collections.
 Japan has made bilateral agreements with Thailand and other Asian countries due to
the importance of this system.
 So we are building the liability regime over the misappropriation regime.
Why misappropriation is weak?
 If I take the resources from OECD country and patent it in my country straightway:misappropriation
 But if I after taking it-study-synthesis it-add on it------no free riding at all.
So the basis of IPR is the unfair competition.
Pharmaceuticals: Novelty: A new activity. Novelty is absolute in IP.
Art.54 (4) allows us to claim the compound claim, but limited to the claim.
Object Claims and Novelty :Compound claim is an “object claim”, protected independently of its use. Composition claims
contain at least 2 components. Object as such can be protected only once
Use claims and Novelty
Use of” claims are methods of claims, broader than object claims.
Many uses of a given object can be patented as they are found
But every use must be based on a new technical effect to be Patent.
Compound, first and second medical use claims:
Exception of pharmacy: Art. 54(4) excludes Art.53(c)
If a new use of a known compound is discovered, and that new use is based on a new technical effect,
Art.4 (4) of novelty doesn’t exclude Patentability in Pharmacy.
Patentability of any substance or composition in the state of art shall not be excluded, for use in case
of first medical use, provided that its use for any such method is not comprised in the state of art.
- A Correct first medical use claim is a compound composition claim. It is purpose-limited and m
ust specify the medical/diagnostic/surgical use.
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Second Medical use:-One can direct a Patent on the further medical use of a first medical claim use.
Art.54(5)
Patentability of any substance or composition in the state of art shall not be excluded, for use in case
of first medical use, provided that such use for any such method is not comprised in the state of art.
Disclosure
Art. 83 EPC: The application must disclose the suitability of the product to be manufactured for the
claimed therapeutic.
Lack of disclosure results in lack of inventiveness
The new therapeutic application is the essential technical feature of a “2 nd medical use” claim. This
technical feature must be: disclosed, new, inventive.
Requirement:Proof that compounds act on a biological mechanism
Connection between mechanisms and disease.
-Not Required:
Result of clinical trials
Results on animal models
Medical use claim:-Therapy:Therapeutic used in the sense of Art.52(4) must be considered in the light of decision of EBA G05/83
- Include recognition of: illness to be treated, patient to be treated, not of therapy compound used.
- Prophylactic and curative treatments are within d meaning of “therapy” Art.52(4) EPC.
- Use of known compound for treatment of a disease, if fact already known, treatment can’t be
performed.
Diagnostic Methods
Art.52(4): Methods for treatment of the human or animal body by surgery or therapy and diagnostic
methods practiced on d human or animal body, shall not be regarded.
- The claim must include all:
→examination phase
→comparison
→finding of any significant deviation
→attribution of the deviation
- Then determine:
→Which steps have technical character
→Perform each of the technical steps on human body
Surgical Methods
- Surgery refers to nature of treatment, rather than purpose
- It is not limited to therapeutic purposes.
- Art. 53(c) EPC: Exclusion of patentability of surgical treatments.
→This should be assessed case by case.
2nd medical indications in EU since 2008 are claimed on the form of treatment of the disease.
Provisions EPC do not allow you to claim 2nd medical indication as a product. It has to be new, and has
to be invented.
The use of substance for manufacture for treatment of the disease:
Art. 54.4 EPC 1973
In 1st medical claim, no claim of the disease. Will not have something in your Patent application about
the disease. claim has a medical application.
EU Commission in a 384 pages analysis, explains pharma strategy to make new indications all the time
to keep medication patentable.
Art.54.4 EPC 2000
Purpose bound product claim.
It’s about 2nd medical and 3rd: Individual. Format of a claim. The 1st medication is for the product of
the treatment, the others are dependent on it.