Traditional knowledge as a trade secret

03 Apr 2017

In June 2016, The Protection of Traditional Knowledge, Genetic Resources and Expressions of Folklore Act, 2016[1] (“the Act”) came into force in Zambia. The Act’s preamble indicates that the aim is to:

• provide for a transparent legal framework for the protection of, access to, and use of traditional knowledge, genetic resources and expressions of folklore which also guarantees equitable sharing of benefits and defective participation of holders;
• recognise the spiritual, cultural, social, political and economic value of traditional knowledge, genetic resources and expressions of folklore;
• promote the preservation, wider application and development of traditional knowledge, genetic resources and expressions of folklore;
• recognise, protect and support the alienable rights of traditional communities, individuals and groups over their traditional knowledge, genetic resources and expressions of folklore;
• confer rights on traditional communities, individuals and groups;
• promote the conservation and sustainable utilisation of the country’s biodiversity resources;
• promote fair and equitable distribution of the benefits derived from the exploitation of traditional knowledge, genetic resources and expressions of folklore;
• promote use of the traditional knowledge, genetic resources and expressions of folklore; and
• to prevent the granting of patents based on traditional knowledge, genetic resources and expressions of folklore without the consent of a traditional community, individual or group.

The Act has incorporated a new system into the law such as to register traditional knowledge. The registration does not require that the traditional knowledge be disclosed to the public[2] and furthermore, much like with trade marks, the Registrar will issue an Intellectual Property Journal on protected traditional knowledge as well as include any licenses or contracts related to the traditional knowledge[3]. The Act has been well received in Zambia as it creates economic development in the country and will encourage international investors to invest in the community as well as to register their own traditional knowledge. Furthermore, the local people will have comfort knowing that their traditional knowledge is protected as well as knowing that there are mechanisms in place if there is misuse of their traditional knowledge.

What exactly is traditional knowledge?

Traditional Knowledge (TK) is knowledge, know-how, skills and practices that are developed, sustained and passed on from generation to generation within a community, often forming part of its culture or spiritual identity[4]. TK can be found in a wide variety of contexts including: agriculture, scientific, technical, ecological and medicinal knowledge as well as biodiversity-related knowledge[5].

For example:

The Ila people, also called Baila, Sukulumbe or Shukulumba are Bantu speaking located in the area west of Lusaka being the capital of the Republic of Zambia. Most of the Ila grow food to feed their families and to cover physical and educational needs[6]. The Ila make use of natural plants and trees to make medicines such as the Acacia nigrescens tree (mukundu), the bark of which is decocted and the lotion used for sore gums[7] and the Julbernardia panuculata (mutondo)

of which the leaves can be boiled and the steam inhaled to relieve colds.

TK can be afforded two types of protection namely:

1. Defensive protection- which aims to stop people who are not a part of the community from acquiring the intellectual property rights over the TK; and
2. Positive protection- which grants rights that empower communities to use and benefit from the traditional knowledge[8].

These skills and innovations of indigenous and local communities do not form a separate category of intellectual property law and as such, have to be protected by other means of intellectual property rights. Trade secret is one of the forms of intellectual property that can be used to protect TK.

What are trade secrets?

A Trade secret is information that is useful in the industry and that is kept confidential. It is information that imparts value to its holder and one that provides a competitive edge over its competitors. Should information that constitutes as a trade secret be leaked, it could have a major negative effect on any business. Information such as customer lists, information received by an employee regarding business opportunities valuable to an employer and information provided to an employee in confidence in the course and scope of his employment could be identified as confidential[9]. Even negative information such as failed remedies or manufacture of products and failed research could be protected as a trade secret as it could save a competing business high costs if they have a what not to do guide.

Article 39 of the TRIPS Agreement[10], provides that member states shall protect “undisclosed information” against the unauthorised use “in a manner contrary to honest commercial practices” as long as the information is:

1. a secret in a sense that it is not generally known among or readily accessible to persons that generally deal with the type of information;
2. has commercial value because it is secret; and
3. has been subject to reasonable steps by the person in control of the information to keep it a secret.

This is the general guideline in determining whether information is a secret and if it can be protected as a ‘trade secret’. Member countries may have identified more criteria but Article 39[11] serves as a basis for the member states of the TRIPS Agreement[12]

The advantages of trade secrets are that trade secrets do not have to be registered and have no limited protection frame, there are no registration costs and there are no formal compliance requirements that have to be met. However, the disadvantages are that trade secrets can be reverse-engineered once the secret is made public and then anyone is at liberty to use the information. The enforceability of the trade secrets is generally not easy furthermore, it may prove to be costly.

Traditional knowledge as trade secret

In conjunction with the requirements set out by Article 39, traditional knowledge can be protected as a trade secret if:

1. The information is a secret
Customary laws of communities often require that certain knowledge should be disclosed to certain recipients. For example: A group of North American indigenous communities, the Tulalip Tribe, have an application under the Patent Cooperation Treaty (PCT) on the use of traditional Chinese medicine to reduce the level of fat in the blood which is a collection of their traditional knowledge. A part of the traditional knowledge has been exposed for the patent review and the rest has been kept a secret[13].

2. Reasonable steps have been taken to protect it
The information must be reasonably protected. Even if the whole community knows about it, it does not lose its secrecy provided that the rest of the outside people do not have much knowledge about it such as in the example of the Tulalip Tribe.

3. The information has economic value
Traditional Knowledge is seen as an asset as it could be used to develop products which would be profitable. It therefore has great economical value.

If the above requirements have been met, then traditional knowledge can be protected as a trade secret and any misappropriation of the information can allow the owner of the information to seek relief through various means such as obtaining an interdict to prohibit further misappropriation of the information.

Conclusion

Trade secrets are an important form of intellectual property and can be the better form of protection not only for TK but also any confidential information within a business. It is imperative that initial steps be taken in identifying the trade secrets of the business and thereafter, incorporate protection mechanisms within the business such as;

1. making trade secret protection a priority;
2. ensuring that documents are stored securely and in places where there is limited access;
3. ensuring that there are non-disclosure and confidentiality agreements in place to protect the confidential information;
4. educating third parties and employees about what constitutes confidential information as well as the consequences of revealing the confidential information;
5. marking documents that they constitute confidential information; and
6. restricting access to confidential information physically and electronically only to those individuals that need to know the information.

For information about the Protection, Promotion, Development and Management of the Indigenous Knowledge Systems Bill, click here.

[1] Act No. 16 of 2016

[2] Section 15 of Act No. 16 of 2016

[3] Section 11 of Act No. 16 of 2016

[4] WIPO Traditional Knowledge http://www.wipo.int/tk/en/tk/

[5] Idem

[6] Ila in Zambia https://joshuaproject.net/people_groups/12208/ZA

[7] Fowler D.G (2002) Traditional Ila Plant Remedies from Zambia 35-48

[8] Pandey V Protection of Traditional Knowledge as Trade Secrets (2013) http://www.mondaq.com/india/x/279342/Patent/Protection+Of+Traditional+Knowledge+As+Trade+Secrets

[9] Meter Systems Holdings Limited v Venter and Another 1993 (1) SA 409

[10] Agreement on Trade-Related Aspects of Intellectual Property Rights

[11] Idem

[12] Idem

[13] Pandey V Protection of Traditional Knowledge as Trade Secrets (2013) http://www.mondaq.com/india/x/279342/Patent/Protection+Of+Traditional+Knowledge+As+Trade+Secrets

 

(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)