Use of blockchain in protecting and enforcing trade secrets

Originally published at www.bernstein.io.

The rising importance of trade secrets

As opposed to most other intellectual property types, trades secrets are loosely described as any kind of confidential business information and therefore come into an extensive variety of forms.

Trade secrets recognized by courts include source code, methods, prototypes, pre-release pricing, financials, budgets, contract terms, business plans, market insights, employee salaries, supplier and customer lists, chemical formulas, experiments, positive and negative experimental results, engineering specifications, laboratory notebooks, and recipes.

While trade secrets can be found in virtually every company, they have long been overlooked in the IP strategy of corporations and SMEs alike, largely due to their intangible and ubiquitous aspect and their ambiguous legal enforceability.

Trade secrets and blockchain

Blockchains, and particularly public blockchains, are immutable global registries and, as such, innovators can leverage them to prove the existence and ownership of a trade secret at a certain time.

Confidentiality is not compromised: when registering information on a blockchain, the only piece of information publicly available are the hash and the timestamp indicating when the blockchain transaction occurred.

Blockchains can potentially assist at various stages of the life cycle of a trade secret, notably when it comes to the “reasonable measure of protection” and enforcement of a trade secret, ie, being able to prove that the information has been kept secret in the event of a misappropriation. Blockchains may also be used when it comes to securely sharing information with third parties by the use of confidentiality and non-disclosure agreements and evidencing their transfer.

— “How blockchain can protect trade secrets” by Birgit Clark and Sylvia Polydor, Intellectual Property Magazine, May 2018

Keep reading on www.bernstein.io!
Additional insights and resources to better understand how the blockchain will help you to secure and manage trade secrets.