Canadian Lawyer

November 2022

The most widely read magazine for Canadian lawyers

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30 www.canadianlawyermag.com TRADE SECRETS SPECIAL PROMOTIONAL FEATURE A Q&A with Anita Nador, partner at Gowling WLG (Canada) LLP As trade secrets become increasingly important, companies need to know how to navigate this essential aspect of IP and business plans What is a trade secret? It is a type of intellectual property, just like a patent, trademark, or copyright, with its own value and attributes. It can be bought, sold, or licensed. Any information (from any subject matter) could be a trade secret if it has economic value derived from it not being generally known and reasonable efforts have been used to maintain the secret. Trade secrets do not have territorial restrictions and are not subject to any registration or filing require- ments. The term for trade secret protection ends when the "secret" ends. As such, the main duty of a company is to adopt policies and procedures to ensure the secret is kept. What are the most significant drivers when it comes to their increasing importance? Technology: On the one hand, technology eases transmission and the ability to obtain/ hack trade secrets remotely; on the other, it also provides an ability to better monitor and track information flow. As soon as a trade secret is out in public, it is no longer a secret, and its value is lost. Companies must be much more diligent in setting up systems, policies, and best practices to identify, monitor, and track their confidential infor- mation to prevent – or at least minimize – the effect of any breaches. If the formula and process for making Coca-Cola ever got out, the value of the $200b+ company would be seriously compromised. Other IP enhances the company's value, but the "formula" and processes are its prized asset. Societal: Some of the societal drivers were made apparent during the pandemic where companies had to control information flow in an increasingly decentralized global work- force. We must also consider natural tenden- cies to "chat" and be on social media. For a company to maintain an edge on its compet- itors, adopting directed policies, procedures, and best practices and educating all staff on them is essential. Legal: There are two main legal drivers: 1 Many companies have realized that their developed IP that gives them that edge is either not protectable by patents or the incremental added value of patent protection – which is term limited and involves the invention being published – pales in comparison to the value of a trade secret, which extends to the terms of its secrecy and is of a nature that better lends itself to protection. For instance, processes that are not readily apparent from examining the end product are often easier to protect by a trade secret than other technologies. 2 Laws have changed. Many countries such as the US and Canada have adopted criminal provisions for trade secret misappropriation. Civil trade secret liti- gation awards, especially in the US, have increased and are often in the hundreds of millions of dollars. People are noticing the value of these assets. However, to enforce its rights and be successful in the courts, a

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