UCLA Pacific Basin Law Journal

The first target of today’s global commercial and military espionage, trade secrets, are the only form of intellectual property protection to be based on the necessity of nondisclosure and secrecy rather than on the paradigm of publicity and exploitability, with the obvious consequence that where confidentiality ends, no trade secret factually exists anymore.  As such, current judicial remedies to trade secret thefts simply miss the point, treating trade secrets as rights which can be restored, rather than as assets that once stolen, are lost forever.  Moreover, trade secrets often represent the “backbone” of a country’s development: an invaluable strategic advantage for entire industrial systems, innovation environments, and national economies.  Whereas a trade secret theft occurring within domestic borders transfers exploitability rather than causing damage to the economic ecosystem of the country concerned, international trade secret thefts may jeopardize states’ economy and public security alike.  For these reasons, the only way to protect trade secrets by law is through ensuring that their secrecy is reasonably safe by means of compulsory cybersecurity and cyber-hygiene standards to be complied with by their owners.  When it comes to this specific form of IP, the only protection is afforded with prevention: injunctions and compensations can work as remedies for other IP rights’ misappropriations and misexploitations, but do nothing to restore the peculiarity of a trade secret which is, indeed, its secrecy.  Not only should companies be compelled to adopt and implement reasonable sector-specific IT security measures and procedures, but licensing agreements including know-how should feature a specific cybersecurity clause to be carefully negotiated.  The new cybersecurity regimes of world powers like China seem to capture this problem, and to (involuntarily?) provide useful tools for addressing it beyond the schemes of intellectual property or tort (confidentiality) laws.  Regrettably, other countries in the Pacific region appear to keep the belief that trade secret thefts are a private affair of the breached companies, which should seek redress via traditional judicial channels.  This is to be deemed an outdated, misleading, shortsighted and ineffective approach.