Excerpt
Table of content
Abstract
Table of cases
Table of legislation
Bibliography
List of Abbreviations
Introduction
1) Background
2) Aim and objective
3) Rationale
4) Methodology
5) Assumption
6) Structure
Chapter 1: Basics on technical data and information
1) Nature of data and information
2) Personal data
3) Technical data and information
4) Know-how
Chapter 2: Legal protection of confidential information, analysis of cases
1) Information as non-tangible object
2) Legal protection of confidential information, breach of confidence
3) Confidential information as intangible property?
4) Intermediate conclusion:
5) Discussion
Chapter 3: Protection as patent and copyright
1) Patent
2) Copyright
3) Intermediate conclusions and discussion
Chapter 4: Rights in database
1) Copyright in database
2) Database Right
3) Conclusions and discussion
Chapter 5: Trade secret protection for technical data, information and know how
1) Legal definition of trade secret
2) Qualification of technical data as trade secret
3) Suitability of trade secret protection for technical data, information and know how
4) “Weakness” of trade secret protection
5) Trade secret as proprietary right?
Chapter 6: Conclusions
Abstract
Technical data, information and know-how are important in a data-driven, digital economy. Their adequate legal protection has been discussed for a long time. An additional debate on the legal characterization of data and the legal rules applicable to them has started in recent years and is still ongoing.
As a contribution to this debate, this study summarizes the current state of legal protection for the three subjects and evaluates the appropriate proprietary rights. The study involves a legal research on the relevant court cases, legislation and literature. The previous court rulings concerning the breach of confidence form the basis for the legal analysis. Then, the study examines the limits of the protection of patent, copyright and database right for data, information and know-how.
The newly introduced legal instrument of trade secret may provide a suitable legal protection for the three subjects and has the potential to clarify some discussed legal issues, particularly in respect of data as immaterial thing.
The study shows the constant challenge to properly capture the developments in the digital technology by the legal terms and instruments of intellectual property law.
Table of cases
Attorney-General v. Guardian Newspapers Ltd (No.2) 1990 1 A.C. 109
British Horseracing Board Ltd v William Hill Organization Ltd 2004 ECR I-10415
Broadman v Phipps 1967 AC 127
Campbell v Mirror Group Newspapers Ltd 2004 2 AC 457 (HL); 2004 UKHL 22
Cronleigh Precision Engineering Ltd v Bryant 1965 1 W.L.R.1293
Douglas v Hello! Ltd 2007 UKHL 21
Exxon v Exxon Insurance 1982 Ch 119
Fairstar Heavy Transport v Adkins 2013 EWAC Civ 886
Football Dataco v Stan James and others, Sportradar 2013 EWCA Civ 27
Football Dataco v Yahoo! UK Ltd (C-604/10) 2013 FSR 1 (CJEU 3rd Chamber)
Force India Formula One Team v. Malaysia Racing Team 2012 EWHC 616
Forensic Telecommunication Services Ltd (FTS) v The Chief Constable of West Yorkshire Police 2011 EWHC 2892 (Ch)
Infopaq International A/S v Danske Dagblades Forening (C-5/08) 2009 ECDR 16 (CJEU 4th Chamber)
Ladbroke (Football) Ltd v William Hill (Football) 1964 1 WLR 273
Linde Ltd v Kerr 1991 1 W.L.R. 251]
Murray v Yorkshire Fund Managers 1998 1 W.L.R.951
National Westminster Bank v Ainsworth 1965 AC 1175
Navitaire v Easyjet Airline 2005 E.C.C. 30
Oxford v Moss 1979 68 Cr.AppR. , 1979 CrimLR 119
Peter Pan Manufacturing Corp. v Corsets Silhouette Ltd 1964 1.W.L.R.96
Phillips v Mulcaire 2012 UKSC 28
SAS Institute Inc v World Programming Ltd 2013 EWHC 69 (Ch)
Saltman Engineering Co v Campbell Engineering Co 1948 1. WLUK 12; 1963 3 All ER 413
Seager v Copydex 1967 1 W.L.R. 923
Technomed v Bluecrest Health 2017 EWHC 2142 (Ch)
Veolia ES Nottinghamshire Ltd v Nottinghamshire County Council 2012 EWA Civ 1214
Vestergaard Frandsen v Bestnet Europe Ltd 2013 1 W.L.R. 1556
Your Response Ltd v Datateam Business Media Ltd 2014 EWCA Civ 281
Table of legislation
Table of Statutes
Copyright, Designs and Patents Act 1988 (CDPA)
Data Protection Act 2018
Patents Act 1977 (PA 77)
Table of Secondary Legislation
The Trade Secrets (Enforcement, etc.) Regulations 2018 No.597 of 9th June 2018 (Trade Secrets Regulations)
-EU Regulations and Directives:
Council Regulation 772/2004/EC of 24 April 2004 on the application of Art 81(3) of the Treaty of categories of technology transfer agreements (TTBR)
Council Regulation 679/2016 of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation/ GDPR)
Directive 96/9/EC of 11 March 1996 on the legal protection of databases (Database Directive)
Directive 2016/943/EU of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (Trade Secrets Directive)
International Treaties and Conventions
Agreement on Trade Related Aspects of intellectual Property Rights 1994 (TRIPS)
Berne Convention for the Protection of Literary and Artistic Works 1886, revised Paris 1971 (Berne Convention)
European Convention on Human Rights (ECHR)
European Patent Convention 1973 (EPC)
Note: Abbreviations in brackets are not shown in List of abbreviations, they are used in text and footnotes.
Bibliography
Aplin Tanya, Confidential Information as Property? King’s Law Journal, 2013, pp. 173-201 (Aplin )
AplinTanya, Reverse Engineering and Commercial Secrets, Current Legal Problems, Vol.66 (2013), pp.341-377 (Aplin, Reverse Engineering)
Aplin Tanya, Davis Jennifer, Intellectual Property Law, 3rd ed. 2017 (Aplin, Davis)
Arnold Richard, Circumstances importing an obligation of confidence, Law Quarterly Review, 2003, 119 (Apr), pp.193-199 (Arnold)
Ball Jane, The Boundaries of Property Rights in English Law, Electronic Journal of Comparative Law (Dec.2006).vol.10.3, https://www.ejcl.org/103 (Ball)
Clarke Alison, Kohler Paul, Property law: commentary and materials, 2005 (Clarke, Kohler)
Cornish W., Lewelly D., Aplin T., Intellectual Property, 8th ed.2013 (Cornish)
Cornthwaite Jonathan, The High Court Judgement in Technomed v Bluecrest, European Intellectual Property Review (EIPR) 2018, p.328 (Cornthwaite)
Harison Elad, Who owns enterprise information? Data ownership rights in Europe and the U.S., Information & Management 47 (2010), pp.102-108 (Harison)
Hoeren Thomas, Big data and the ownership in data: recent developments in Europe, EIPR, 2014, pp.751-764 (Hoeren)
Hull John, Stealing secrets: a review of the Law Commission’s consultation paper on the misuse of trade secrets, Criminal Law Review 1998, Apr, pp.246-259 (Hull)
Kemp Richard, Hinton Paul, Garland Paul, Legal rights in data, Computer Law & Security Review, vol.27, 2011, pp.139-151 (Kemp, Hinton, Garland)
Pooley James, Trade Secrets: The other IP right, June 2013, WIPO Magazine, pp.1-4 (Pooley)
Reichman Jerome H., How trade secrecy law generates a natural semicommons of innovative know-how, in: From The Law and Theory of Trade Secrecy, 2011, pp.185-200 (Reichman)
Sappa Cristiana, What does trade secrecy have to do with the interconnection-based paradigm of the internet of things? EIPR 2018, (40 (8), pp.518-523 (Cristiana Sappa)
Thomson Joanna, The Database Directive: a clean bill of health? EIPR 2019, 41(4), pp.228-231
Wiebe Andreas, Protection of industrial data- a new property right for the digital economy?, GRUR Int. 2016, pp.877-884 (Wiebe)
- EU Studies/Reports:
Study on emerging issues of data ownership, interoperability, (re-)usability and access to data, and liability, 2018 (EU Study)
Commission Staff Working Document on the free flow of data and emerging issues of the European data economy, {Com(2017)9 final}
Note: Names in brackets are used for this literature referenced or quoted in text.
List of Abbreviations
Abbildung in dieser Leseprobe nicht enthalten
*Not explained in text and tables
Abbildung in dieser Leseprobe nicht enthalten
“Ownership”, proprietary rights in technical data, information and know how
Introduction
1) Background
The catchy metaphor “Data is the new oil”1 highlights the importance of data for the digital economy. Although both can flow, they are of quite different nature. Oil as an organic substance exists in the real, physical world. Data originate from the intellect; they exist in human minds and describe facts for intelligent understanding. They are the basis for communication (human to human, human to machine, machine to machine) in the digitalised processes of the economy. Data have become tradable commodities, information goods, which can be monetised2. Technical data play a key role in the industrial supply chain, the development and manufacture of products and the performance of services; increasingly, they are exchanged in industrial data platforms among different companies3. An Example of exchange of sensor-generated data transmitted from an airplane to a platform operated by an aircraft manufacturer is illustrated in Attachment 1.
In connection with the evolution of a data-driven economy, a debate on the law regime applicable to data arose, including issues whether digital, non-personal data and information are sufficiently protected under the existing forms of IPRs and whether ownership in data, information exists under the current property concept4.
2) Aim and objective
The objective of this dissertation is to identify and analyse relevant property rights for technical data, information and know how. These subjects have been selected due to their common informative nature and their similar usage in the industrial field. The major research topic is to assess whether each of the three subjects meets the classification criteria for a certain proprietary right and enjoys the corresponding legal protection under common law, UK and EU legislation. The study is focused on the main research question: What are the legal characteristics classifying technical data, information and know how as proprietary rights, if any are applicable? Can they attract IP protection? In view of the increasing importance of data and the uncertainty about their legal characterisation, this assessment is a key objective.
3) Rationale
Whilst the legal characteristics of property rights in relation to information and know how have been examined in court rules, their applicability to data is still to be analysed. The academic discussion on the statutory protection of data, information and know how under new EU Trade Secrets Directive has just started. The suitability of this EU wide harmonized legal construct, which is implemented in national legislations, is worthwhile being examined.
4) Methodology
This study will involve legal research in the form of review of court rulings, legislation and literature dealing with the legal classification of technical data, information and know how mainly under the aspects of property rights. Receiving confidential information establishes an obligation of confidence on the side of the confidant. However so far, a generally recognised specific property right to information or even data has not been identified. Thus, the study will examine the scope, the limits and deficits of the legal protection of the three subjects. The informative nature and the immaterial substance of the subjects may hinder to allocate them to proprietary rights.
This study is based on the current concept of property law with its following categories of property and characteristics of property rights:
The law of property encompasses as well “corporeal property” i.e. the rights of ownership in material things (‘ius in rem’) as well as “incorporeal property” i.e. the ownership over an immaterial thing (‘ius in re propria’)5 like knowledge. Ideas and information that are commercially valuable products of the human intellect are protected by intellectual property law6, which provides specific, codified categories of intellectual property rights like patents, copyrights and designs. The study will analyse by interpretation to which extent the three subjects meet or do not meet the substantial criteria of IPR.
A major element of the law of property lies in the enforceability of its protected interests7. Whereas contractual obligations under the law of obligations only confer enforceable rights on the parties to the contract, property rights can be enforced against everyone, the whole world. The general enforceability is seen as “a necessary condition for an interest to be a property right”.8 This effect against every third party has also been formulated in the definition of property rights in National Westminster Bank v Ainsworth9:”Before a right or interest can be admitted into the category of property, or of a right affecting property, it must be definable, identifiable by third parties, capable in its assumption by third parties and have some degree of permanence or stability”. Therefor in addition to its enforceability, a proprietary interest or right should be identifiable and be alienable i.e. the right or interest should be capable of being transferred from its holder to somebody else10.
Unlike in civil law systems, there is no limited list of property interests in common law11. The dynamic quality of property is recognised in English law, new proprietary rights in the area of intellectual property have been steadily created12. English Law is rather focused on remedies than on the nature of rights, “if a right is well protected by remedies and if it is freely transferable, it starts to assume a proprietary character”13. The study will discuss the proprietary features of recently enacted trade secret which may cover all three subjects by its definition.
5) Assumption
I assume that a specific property right in data covering and protecting any data-related activities will not be established-de lege ferenda. Presumably, it will not be consistent with the above legal principles of ownership in tangible things and the established types of intellectual property. The state of data being applied is permanently changing. Probably, the control and distribution of data form a flexible, objective connecting factor for any regulation.
6) Structure
In chapter 1, I define the key terms of technical data, information and know-how by referring to the technical terminology as well as to the legal terminology in order to work out the basic commonalities and differences of these three subjects. The protection of confidential information founded on the principle of equity and the legal considerations on some proprietary aspects of information will be discussed in chapter 2 by reviewing several court rulings. In chapter 3, I examine whether the three subjects fulfil the requirements of a patent or copyright. The database right, its difficult interpretation and its limited scope to protect data will be shown in chapter 4. Finally, in chapter 5, I analyse the recently introduced legal construct of trade secret, its legal potential for covering all three subjects and its proprietary right-like character.
Chapter 1: Basics on technical data and information
In order to appropriately reflect the technical background of the legal topic and to align the technical and legal terminology, the terms ‘technical data and information’ as well as other data-relevant terms are to be explained.
1) Nature of data and information
Often, the terms data and information are used interchangeably. Data originating from Latin “data” (singular “datum” which means something given) are simply facts or figures, they are bits of information.
In semiotics14, data are series of signs (alphabets, numbers, or pictorial signs/symbols) in a raw or unorganized form and are characterized as ‘syntactic dimension’. They become information by interpretation when these signs are used to refer to or to represent something in the understanding of a sender or recipient, - characterized as ‘semantic dimension’ (level of meaning). In context of computing/computer technology15, data are coded, machine readable information in binary digital format, which can be generated by machines or humans, and can be arranged relationally to draw conclusions and to be made useful. They can be collected by sensors (e.g. via an on-board diagnosis system), recorded (e.g. via an event data recorder), transmitted, processed, analysed and used (see Example).
Digitalization means the power to reduce information of all kinds into binary representations of 0s and 1s, it provides a medium of storing and transmitting a broad range of data. Software is a set of data, information designed to instruct/direct or administer processes, systems or machines through algorithms which are mathematical formulas or statistical processes; they can perform certain analyses on input data. A database is an organized collection of data stored via a certain technique. It may include charts, diagrams, schemes, or tables, and may be integrated in a data management system, a software that allows data to be explored and analysed.
2) Personal data
Personal data are not subject of this dissertation. They are covered by the UK Data Protection Act 2018 and the EU General Data Protection Regulation with the focus on protecting users’, consumers’ rights to privacy. In sec.3(2) UK Data Protection Act, personal data are defined as “any information relating to an identified or identifiable living individual”. Technical data deal with non-personal, objective information.
3) Technical data and information
Technical data are recorded information of technical nature, they present information on technical parameters and features of a product or item. For instance, they give information about the structure, composition, functional status, operation, and performance of a machine and its components, e.g. they record its measured weight, speed, pressure, and temperature for a certain time or period. A technical documentation or specification describes in detail the handling, functionality and architecture of a technical product, it may include the specification of the item or components, a data sheet, test methods and manufacturing standards, user guides and manuals16.
However, the terms “technical data and information” are rarely defined in legal statutes. Only in specific technology-related regulations, these terms are explicitly described. For example, point 6 of UK Regulatory Article (RA) 114017: air system technical data exploitation, defines: “The term ‘Technical Data’ encompasses engineering data during design, Certification and Release to Service of an Air System”. A precise definition contains the UK Export Control Order 2008 No.3231 in its Interpretation Part18: “’technology’ means information (including but not limited to information comprised in software and documents such as blueprints, manuals, diagrams and designs) that is capable of use in connection with the development, production or use of any goods or items”.
Accordingly, technical data and information are any information relating to technology along the complete industrial process from the design to the sale of a product and the performance of a service. They may be kept secret to safeguard technological advances and novelty of products or they are in the public domain like industrial standards, which specify the quality, safety and efficiency of products and services for specific industries and are generally available19.
4) Know-how
Know-how20 is legally defined as “package of practical information resulting from experience and testing” which is “secret and useful for product”. Accordingly, it is practical knowledge of a subject, the skilful understanding of specific information or facts acquired through experience, it enables to accomplish something. Beyond information it carries practical expertise. According to the Basic Principles of Art.7 TRIPS, “technological knowledge” shall be transferred and disseminated “to the mutual advantage of producers and users”. This is often done by granting a license to use industrial know-how being held in the form of formulae, designs, procedures and methods on products and services or experiences known by licensor. This practice plays a key role in product innovation and R&D-intensive manufacturing.
The documented or undocumented know-how can represent a significant economic value for an enterprise. It can be materialised as self-created, intangible asset without physical substance in the balance sheet of a company if it is controlled by the entity and future economic benefits are expected21.
Chapter 2: Legal protection of confidential information, analysis of cases
Many court rulings deal with the legal protection of confidential information, some discuss the legal nature of confidential information, whether it is property or a form of IP. Considering the two legal objects of property, material and immaterial things, cases focussing on the legal protection of information as „immaterial thing “will be analysed following. The cases discussed below focus on English law, but it is worth noting that the law in relation to protecting confidential information has not yet been harmonized at international level like patents and copyright. Thus, the question whether confidential information can amount to property may be answered differently in other jurisdictions.
1) Information as non-tangible object
In Oxford v Moss22, a student dishonestly obtained an examination paper, read its content and returned it to the university. The court23 held that “the defendant at no time…intended to steal any tangible element of the said proof examination paper…, the paper itself “. Whilst acknowledging, that the physical medium on which the information is recorded, is capable of being an object of theft, the court24 denied the criminal protection of the information itself: „the confidential information so obtained by him did not fall within the definition of ‚intangible property ‘in section 4(1) of the Theft Act 1968“. In view of the consequences of this ruling, that the unauthorised use of a secret information, the taking of the information does not constitute an offence under UK law, legislative actions were considered, but criminal law has not been reformed yet25.
In Your Response v Datateam Business26, a publisher distributed magazines to subscribers, recorded and stored their information in an electronic database, which was updated by an external data-manager. After the termination of the service contract, the data-manager refused to release the database to the publisher and to access the data until outstanding service fees were paid. In the following proceedings, a main question was whether the data-manager was entitled to exercise a lien over the database. According to the judgement27, a common law possessory lien is a remedy in rem which requires „actual possession of the goods subject to the lien “. Information and databases, which are intangible in nature, do not represent tangible property, since „possession is concerned with the physical control of tangible objects “28. Such physical control could not be exercised by the data-manager over the information itself. The physical medium, on which the information is recorded, is capable of possession and tangible property, but the information itself is not property, „it may only give rise to intellectual property rights “as intangible property29. Thus, the court denied a common law lien to electronic data.
Intangible objects like information cannot be touched, physically be seen, or be held in hand. Therefore, any legal remedies requiring physical control of the object do not apply to information as such.
2) Legal protection of confidential information, breach of confidence
According to many rulings, technical information is protected under English common law as confidential information which can either be based on a contractual clause or the free-standing equitable action for breach of confidence.
Often, these rulings were based on cases of breach of confidence in contractual relationships. In Saltman Engineering Co v Campbell Engineering Co30,Peter Pan Manufacturing Corp. v Corsets Silhouette Ltd31, Cronleigh Precision Engineering Ltd v Bryant32, technical information was confidentially supplied to defendants by plaintiffs in the frame of a contract, the defendants misused this confidential information. The requirement for confidential information was set in Saltman v Campell33:”The information, to be confidential, must apart from contract, have the necessary quality of confidence about it, namely, it must not be something which is public property and public knowledge.” In Seager v. Copydex34, the Court of Appeal awarded damages for breach of confidence, even so the information was obtained outside of a contract, „on the broad principle of equity that he who has received information in confidence shall not take unfair advantage of it “35.
A breach of confidence in equity was also the legal basis for a claim of profits in Broadman v Phipps36, where trustees attended an annual general meeting of a company on behalf of the trust holding substantial shares in the company and made use of information for a takeover bid personally, which they received at this meeting. According to the court, they acquired the information by virtue of a fiduciary relationship; „…equity will restrain transmission to another if it in breach of some confidential relationship “37.
Whereas in aforementioned cases, the defendants were the direct recipients of the confidential information, the defendant in Douglas v Hello38 received it via a third-party breaching confidentiality. The plaintiff, a magazine was contracted to exclusively publish photos of a celebrity wedding. A rival magazine published photos of this wedding, which were taken by an unauthorized photographer. The House of Lords39 acknowledged the plaintiff ‘s claim to protect the photos of the wedding as confidential information, since an obligation of confidentiality was imposed on every attendee of the wedding not to make photos. This obligation of confidence was also binding upon the defendant rival magazine, which knew about the confidentiality and did not act in good faith by using the unauthorized photos.
The common law claim of breach of confidence founded on the equitable duty of confidence has been referred to in further rulings like Campbell v MGN/Mirror Group, Vestergaard v Bestnet, Force India v Malaysia Racing Team40. Whereby, the duty of confidence arises when a person directly receives the information as confidential or receives it from a person who is under a duty of confidence, regardless whether he (as indirect recipient) has actual knowledge that the information is confidential or has constructive knowledge “that he is in the position of a reasonable man who would appreciate that the information was confidential”41. Thus, the equitable jurisdiction has been extended to non-contractual relationships.
3) Confidential information as intangible property?
Whereas in Broadman v Phipps42, the court could rule based on an equitable right of good faith, and mention by the way: „In general, information is not property at all….it is not property in any normal sense “, the issue of ’property’ was profoundly discussed in other cases.
In Phillips v Mulcaire43,the claimant Ms. Phillips commenced proceedings against a news group in connection with hacking her mobile phone, which recorded private and commercial information. Mr. Mulcaire should serve a witness statement but resisted on the ground of his privilege against self-incrimination. Ms Phillips referred to s.72(2)(a) of the Senior Courts Act (1981) (“the 1981 Act “) excluding the privilege in proceedings for infringement of rights pertaining to any intellectual property.
As s.72 (5) of the 1981 Act clearly defines “intellectual property“ as “any patent, trade mark, copyright, technical and commercial information“, the Supreme Court44 characterized the information in question and concluded45 that “many of the voicemails on Ms Phillip’s mobile phone were both confidential and of a commercial nature“, and accordingly her proceedings were “proceedings for…rights pertaining to…intellectual property“ within the meaning of s.72 of the 1981 Act.
The statutory categorization of information under public law was subject matter in further rulings. In Veolia ES Nottinghamshire Ltd. v Nottinghamshire County Council46, where a waste management company appealed against a decision that documents relating to the local authority accounts were to be made available for inspection by the first interested party according to s.15(1) Audit Commission Act (“ACA”). The company asserted that this statutory provision did not permit the disclosure of confidential information like its pricing information contained in the document requested for inspection and invoked ECHR and Art.6 EU Directive 2004/18. The court of appeal47 interpreted s.15(1) ACA „to exclude confidential information protected under ECHR “and allowed the appeal. Beyond that the judgment48 stated: “However, confidential information is a well-recognised species of property, protected by common law, and recognised in other relevant statutes such as FIA 2000, as well as EU law such as in the 2004 Directive. Commercial confidential information may well constitute the life blood of an enterprise. “
In Fairstar Heavy Transport v Adkins49, the defendant Mr Adkins was CEO of Fairstar. He stored electronic business correspondence incl. e-mails on his personal computer. After termination of his appointment, Fairstar wanted access to the e-mails and asserted a claim to property in content. The court left it explicitly open whether „information in the content of the e-mails is property owned by Fairstar“ and stated „Some kinds of information, such as non-patentable know-how are more akin to property in their specificity and exclusivity than, say, personal information about private life “50. Instead of further discussing a proprietary right in an intangible information, the court51 referred to the principal’s right to an inspection and treated the e-mails as an (electronic) document according to Civil Procedures Rules 31.4.
Although the High Court in Force India Formula One Team v Malaysia Racing Team52 discussed intellectual property claims relating to confidential information, it denied that confidential information is property. However, the High Court mentioned that information will be „protected if it can be classed as trade secret… “53, which requires a confidential information in an industrial or trade setting. The High Court quoted Vestergaard v Bestnet54:„It is accepted that a claim for misuse of technical trade secrets such as the present is a claim to enforce an intellectual property right“ and noticed a close analogy between confidential information and intellectual property, which suggests applying the principles of intellectual property law to breach of confidence55. Such analogy and the application of rules of intellectual property law to confidential information formed the legal basis for the ruling in Murray v Yorkshire Fund Managers56.In this case, six team members jointly worked out a highly confidential business plan for an investment project. One member, the plaintiff, left the team and was compensated for his work. The team assigned the plan to a third party, which utilized it without the consent of the plaintiff, who brought an action for breach of confidence. The Court of Appeal held57, that „the six members of the team were entitled to equal rights in the confidential information, in other words, they were co-owners of it “. The court explicitly applied the principles of co-ownership of intellectual property rights and quoted previous decisions on co-owned patents, inventions, copyrights. Accordingly, each co-owner is entitled to use the protected information for his own benefit58.
4) Intermediate conclusion:
Confidential information is protected based on the English law principles of breach of confidence but has not been definitively categorized as ‘property’ in the examined rulings. A few recent rulings considered confidential (technical or commercial) information as ‘trade secrets’ and tended to recognize some characteristics of property. Effectively, in practice it has been treated like property in terms of remedy. Confidential information has been classified as property rights in specific public law statutes, but not in criminal law yet.
5) Discussion
The notion of property in above cases was criticised by some commentators59. Aplin60 thoroughly analysed whether confidential information or a commercial secret falls under Art.1 ECHR and is a property right as assumed in Veolia ES Nottinghamshire v Nottinghamshire CC61. Referring to decisions of ECtHR applying ECHR to intellectual property rights, she took the view62, that such protection requires the recognition of confidential information under domestic law. However, the authorities quoted in above rulings are against a proprietary right in confidential information under UK law, and finally applied the principles of breach of confidence in contract or equity. In contrast to US law, “trade secret is not a stable term in English law”63.
Conceptually, she64 measured confidential information against three criteria characterising ownership, i.e. “permanence and stability, excludability, and exchange and alienation”, which confidential information fail to meet. In respect of permanence and stability, confidential information is endangered to easily become public domain due to its accessibility and (digital) circulation, and consequently loses its legal protection in comparison to intellectual property rights, that are only limited in time by law65. Further on, it is very difficult to physically exclude third parties from accessing information despite available encryption techniques. In contrast to legally defined intellectual property rights like patents, design rights, copyrights, which confer exclusivity in relation to any third parties, the action for breach of confidence under UK law is only relative towards persons under confidentiality obligation via contract or circumstances66.In addition, there is no protection, if the information is independently generated by a third party or a reverse engineering takes place. The exchange and transfer of information can only be arranged by contract; title to the information cannot be given in contrast to core intellectual property rights67.
Indeed, the constraints of controlling the dissemination of information, the lack of transfer of (title) rights conferring a monopoly, the possibility of reverse engineering and of independent development are inherent deficiencies of information in contrast to intellectual property rights defined by law. On the other side, it is common and usual practice to effectively grant (exclusive) rights to use technical information and know how. In patent and know how license contracts, the core subject is often licensing the know-how, licensing patents is add-on68. The user rights on technical information supplied under the contract are defined in line with the terms of patents, they follow the patent use-style. Industrial know-how is considered as a component of the licensed technology coexisting with IP rights69. This IPR-like treatment of technical information in contracts has been recognised in some rulings as shown under 3). Finally, it is rooted in the secret content of the information at stake and its economic and transactional value.
This is also the reason why commercially sensitive information enjoys protection under public law. Besides the mentioned ACA, Ss.41,43,44 Freedom of Information Act (“FOIA”) and reg.12 (5) (e), (f) Environmental Information Regulations (“EIRs”) explicitly exempt confidential commercial information from disclosure by the public authority to everybody who otherwise has a right to obtain information under FOIA or EIRs. S. 43 FOIA exempts “a trade secret”, reg.12(5)(e) EIRs provides an exception where “disclosure would adversely affect: the confidentiality of commercial or industrial information where such confidentiality is provided by law to protect a legitimate economic interest.” These exemptions fulfil the commitment under Art.39 TRIPS70 requiring members (i) to protect undisclosed information which (a) is secret, (b) has commercial value, (c) has been subject to reasonable steps for protection by the secret holder, and (ii) not to disclose such information by public authorities.
Chapter 3: Protection as patent and copyright
In this chapter, it will be examined whether technical data, information and know how can enjoy the protection as patent or copyright, which are powerful intellectual property rights enabling their holder to exercise a monopoly or quasi monopoly right against everyone and providing several effective remedies against infringements.
1) Patent
Patent protection requires the fulfilment of strong criteria. According to s.1(1) PA 77/art.52(1) EPC, a patent can be granted for an invention which is new, involves inventive steps, and is capable of industrial application. The term “invention” has not been legally defined; S. 1(2) PA 77 negatively defines invention and excludes under (b) “a literary…or artistic work”, and under (d) “the presentation of information”. The major criterion to examine the patentability of technical data, information and know how is to assess, whether they contain an invention, which sets out a technical problem to be solved by it, what is the essence of an invention. EPO71 has adopted such a ‘problem and solution ‘approach in order to sort out an invention. The UK approach of identifying an “inventive concept” (s.14(6) PA 77) is the same in terms of defining the inventiveness of a subject-matter72.
a) Technical data describe and represent bare facts or figures. Although they describe technical features, they as such do not contain an invention, a new idea or thought to solve a problem or to achieve technical effects. They convey information per se, but they do not transport a ‘teaching’ message with a technological advance. In addition, an invention shall be disclosed “in a manner which is clear enough and complete enough to be performed by a person skilled in the art” (s.14(3) PA 1977). Data are not in a state to be performed, they have a purely informative and descriptive character.
b) Technical information may include more substance in terms of quantity and quality. Considering the definition under chapter1. 3), technical information covers a broad range of any kind of technology-related information. For instance, a patent specification73 which contains the abstract of the invention (consisting of a description setting out the technical problem being solved by the invention, and of drawings) includes a lot of technical information. However, this form of technical information precisely to obtain a patent is very specific and rare. By far, the most forms of technical information are not designed and directed to file for an application of a patent. Technical information used in practice shall inform manufacturers and users about the technical features of existing technologies, products or processes irrespective whether the underlying subject-matter is protected by a patent or not. Usually, this technical information is made accessible to the public without a prior patent or patent application, and therefore lacks novelty74. If technical information is kept secret, relates to research and development work and includes innovative elements, it may embody an invention. Depending on the level and quality of its content, it can be applied for the grant of a patent to secure its priority. In contrast to technical data, a non-patentable subject-matter cannot be supposed in general.
c) Know how, which contains practical knowledge (see chapter 1.4), is close to a patent. However, its holder has decided not to apply for a patent - due to its non-patentability or for other reasons. Often, know how provides additional, useful information about the design, manufacture and use of a patented product75, but itself does not meet the requirements of a patent. Patent licenses are often combined with know how licenses (see chapter 2,5).
2) Copyright
Acc.to s.1(1) CDPA eight types of works are copyrightable. In respect of technical data, information and know how, ‘original literary…or artistic works’ are relevant.
a) S.3 CDPA defines ‘literary work’ as any written work including a table or compilation other than a database, a computer program and its preparatory design material, and a database. According to s.3(2) CDPA a literary work is not protected ‘unless and until it is recorded in writing or otherwise’. Therefore, it must be fixed. Acc.to s.178 CDPA, ‘writing’ means ‘any form of notation or code, … and regardless by which, or medium in or which, it is recorded’. This wide definition covers work in digital or electronic form, the medium for data (see chapt.1,1).
Even short forms of text like meaningful, conclusive names or titles can be considered as literary work, if it is intended to convey information and instruction76. In Exxon v Exxon Insurance77 this was not given for the corporate name “Exxon”, because this single word has no further substance or meaning. In Navitaire v Easyjet78,an individual command name of a web interface, a code for an airline booking system, was not qualified as literary work, as it was a single word in isolation. These cases show the difficulty to treat a single purely technical data as literary work. A different view may be taken at multiple or a mixture of different data (figures, symbols and words), because they may provide a lot of meaningful information, and may form a ’table’ or a ‘compilation’ of data in the sense of s.3 CDPA (see below c), bb).
b) The second relevant type ‘artistic work’ is defined in s.4 (1) CDPA and includes ‘a graphic work…irrespective of artistic quality’; acc.to. s.4(2) CDPA ‘graphic work includes (a) any…diagram…’. These definitions cover works of “a more functional or industrial nature”79. Diagrams are often used to fix and present technical data and information.
c) A literary or artistic work can only subsist a copyright, if it is ‘original’ (s.1(1) a CDPA). For the literary work ‘database’, s.3 A CDPA defines ‘originality’ as the ‘authors’ own intellectual creation’. For other literary works the requirement of ‘originality’ was subject of many court rulings and is given if “considerable skill, judgement and labour has been directed to produce” the work80. The same standard is applied to artistic works. Accordingly, technical data and information can be protected if intellectual effort has been involved in their creation.
aa) Technical information like specifications, drawings, blueprints or explanatory text fixed in a tangible medium (paper or digital medium) as technical documentation (see chap.1,3) often contain creative elements. The complex technical matters to be dealt with or the addressees of the information require “creativity” of the author(s) to draw up an understandable item.
Major aspects of intellectual creativity involved in producing, processing and presenting digital data and information have been shown in Technomed Ltd. v Bluecrest Health Screening Ltd.81.
Technomed, a supplier of medical equipment, systems and services, developed an internet-based electrocardiogram (“ECG”) analysis and reporting system known as ECG Cloud, which is capable of tracing and reading the movements of electricity through a patient’s heart’s electrical system. A qualified cardiac physiologist can remotely analyse the ECG readings and classify the patient data based on physical characteristics like heart rates and risk factors set out in a database (“Patient’s Definitions”). The ECG Cloud outputs an extensible mark-up XML language file with a standardised format (“the XML Format”), which can be used to insert data into a template and to produce a patient-individual report. The template contains general explanatory text about ECG screening (“the Explanatory Materials”) and two diagrams: The Two Hearts Diagram showing on the flow of blood and electricity through the heart and an ECG Wave Diagram with some explanatory text.
Besides the database right (see below chapt.4), the Court examined whether copyright subsists in (i) the XLM Format, (ii) the Explanatory Materials, (iii) The Patient’s Definitions, (iv) the Two Hearts Diagram and the Wave Diagram82. In respect of the XLM Format, the Court concluded that XML is a “standard computer language for representing structured data”, which is not protected as software per se83, but the XML Format contains specific text and data formats developed by Technomed like the Patient’s Definitions, which were encoded in XML. Due to its specific characteristics like data structures, the layout and the terminology, the XML Format is to be considered as an intellectual creation, which enjoys copyright protection in the form of a literary work84. According to the Court’s findings, the Explanatory Materials produced new patient friendly text to “explain the ECG screening results in lay person’s terms”85.” The words used are a product of the author’s intellectual effort”86. That was enough for a copyright in the Explanatory Materials. Applying the same standard of “non-negligible intellectual effort”, the Court acknowledged a copyright in each Patient Definition, as they were written in a patient-specific language87. The Court categorized the Two Hearts and the Wave Diagrams as artistic works within the meaning of s.4 CDPA due to their original, particular representation88.
Briefly analysing this ruling, it is to be noted, that the Court saw the intellectual effort in the specifically designed textual explanations and the graphic/pictorial presentations of the data.
bb) Generating or collecting technical data as series of signs (see chapt.1,1) not being presented in an original text or diagram may lack the required creativity. This was explicit subject in Forensic Telecommunications Services Ltd. (FTS) v The Chief Constable of West Yorkshire Police89. This case concerned the physical extraction of user data from mobile phones, which were stored as permanent memory absolute (“PM Abs”) addresses in the memory part of the phones and consisted of two hexadecimal numbers representing the start and end address. FTS compiled lists of these addresses (“PM Abs Lists”). The High Court ruled that copyright does not subsist in the PM Abs Lists, which may be a table or compilation90. However, “ascertaining the addresses…was not the right kind of skill, judgement and labour to attract copyright protection: it was not skill, judgement and labour in devising the form of expression of the addresses” and the individual addresses did not constitute FTS’ “own intellectual creations. To the extent that they are intellectual creations at all, in substance they are Nokia’s intellectual creations”91. The collection, selection and arrangement of numerical data is not an own intellectual creation, as no literary judgement is exercised92. The court referenced to its ruling SAS Institute Inc v World Programming Ltd93 by quoting “Skill, judgement and labour in devising ideas, procedures, methods of operation and mathematical concepts is not protected by the copyright in a literary work. What is protected…is the skill, judgement and labour in devising the form of expression of the literary work.” Such intellectual creation saw CJEU94 in the user manual of the computer program in which the author expressed “his creativity in an original manner through the choice, sequence and combination of words, figures or mathematical concepts”. These creative elements were established by CJEU in Infopaq International A/S v Danske Dagblades Forening95 in relation to newspaper articles; CJEU clarified that “words as such do not constitute elements covered by protection”.
cc) The same requirements are applicable to technical know-how which can be fixed in the same forms as technical information. In terms of copyright know-how is not an own category. Know how itself, the underlying idea, thought or rule is not protected by copyright, only the form of expression of it can be protected as literary or artistic work. The legal context is very clear: “Copyright protection extends to expressions and not ideas, procedures, methods of operation or mathematical concepts as such” (Art 2 WIPO Copyright Treaty)96.
3) Intermediate conclusions and discussion
Due to missing inventiveness technical data have no patentable subject-matter. In respect of technical information, it depends on the quality of its content.
Technical data and information are protected by copyright, if the forms of their expressions are enriched or enlarged by sufficiently creative elements. The above court rulings have thoroughly analysed the state of processing, compiling and presenting data, but not the state of generating them, -except mentioning the mobile phone manufacturer Nokia as creator of the PM Abs addresses, the user data in Forensic Telecommunications v The Chief Constable97.
A few academics98 have raised the issue of copyright in data as such but have denied creativity. Indeed, raw data (encoded in physical, chemical, mathematical symbols) are not being generated in creative forms as literary work in contrast to processed data, which can be creatively represented. The results of designing and integrating data may be protected “given to the intellectual effort made”99. It must of course be remembered that if someone independently arrives at same data compilation etc., they will not be in breach of original copyright as they have not copied it.
Chapter 4: Rights in database
Whereas chapter 3 examined the copyright in the content of technical data and information, this chapter will analyse the copyright in a database storing the content, and the database right, irrespectively whether the material on the database is copyrightable itself.
As stated in chapter 3, 2a), a ‘literary work…includes –(a) a table or compilation other than a database, …, (d) a database’ (s.3(1) CDPA). Since technical data are represented in numbers, engineering terms or units of measurement, it is very likely that any table or compilation in which they are recorded -often in real time- forms a database. Only a table in an abstract format which does not record actually generated technical data may not be a database. This chapter deals with technical data being continuously generated and evolved.
1) Copyright in database
‘A database’ is defined in s.3A CDPA100 as ‘a collection of independent works, data or other materials which-
(a) are arranged in a systematic or methodical way, and
(b) are individually accessible by electronic or other means.’
Undoubtedly, technical data are ‘data’ in the sense of s.3A CDPA. Technical data, such stored in an industrial platform, are also systematically or methodically arranged. For instance, referring to the example (attachm.1), the huge bulk of different data being permanently transmitted from the airplanes to the platform requires a systematic capture and recording in line with pre-defined categories of order. Such systematic or methodical arrangement has been seen “in the form of a fixture list, of the dates, times and names of teams in those various football matches” in Football Dataco v Stan James and Others, Sportradar101 where live data about football matches like goals scorers, fools, positions etc. were put into a database.
According to s.3A (2) CDPA102, a copyright in a database subsists, if it is ‘original’: …’a literary work consisting of a database is original if, and only if, by reason of the selection or arrangement of the contents of the database the database constitutes the author’s own intellectual creation.’ This requirement of ‘intellectual creation’ has been interpreted by CJEU in Football Dataco Ltd v Yahoo UK Ltd103 as follows : “As regards the setting up of a database, that criterion of originality is satisfied when, through the selection or arrangement of the data which it contains, its author expresses his creative ability in an original manner by making free and creative choices …and thus stamps his ’personal touch’”. The labour and skill expended in setting up the database must be “supplemented by elements reflecting originality in the selection and arrangement of the data”104. In Forensic Telecommunications v The Chief Constable105, an intellectual creation was denied, since the data “were acquired as a matter of happenstance over time, and the arrangement was the most obvious and basic one possible”. Referring to recital (15) of the Database Directive, the High Court stated that “copyright in a database covers the structure of the database”, which the PM Abs List does not have106. The structure of a database was also decisive in Technomed v Bluecrest Health107 ; here the High Court recognized creativity in setting classifications for the data/physical characteristics displayed on ECG scan and arranging them “in a structured format”, - the database contained numerous options for each classification.
The criterion of specifically structuring the database may be fulfilled in the example (attachm.1). Due to the disparate data sources, the different purposes of the database/industrial platform, the necessary allocation and integration of the technical data in reasonable formats and scales, the diverse sensor-generated data feeding the database must be structured. They must be aggregated, criteria to refine them must be chosen. The raw flight data are to be transformed and structured in order to get specific insights about the operational state of an aircraft or types of aircraft.
2) Database Right
In addition to the copyright protecting the selection and arrangement of data in a database, Art.7(1) Database Directive108 provides a sui generis right protecting the contents of a database as a whole, whereby ‘database’ has been identically defined in Art.1 (2) Database Directive and in s.3(1) CDPA. The different terms of protection are to be noted, for copyrightable database: 70 years from author’s death (s.52 CDPA), for sui generis right: 15 years (Art.10 (1) Database Directive). The maker of a database is vested with this right when he has made ‘qualitatively and/or quantitatively a substantial investment in either obtaining, verification or presentation of the contents’. Interpretative issues arose on (a) the object of the investment and (b) the extent of the investment in proportion to the extracted content, since the sui generis right prevents unauthorized ‘extraction and/or reutilization of the whole or substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database’ (Art.7(1) Database Directive).
a) Several court rulings clarified that only the investment on “the establishment of storage and processing systems for existing information and not the creation of materials capable of being collected subsequently in a database”109 is covered. In Technomed v Bluecrest Health110 the High Court held that substantial investment was made in obtaining, verifying and presenting the data beyond the creation of these data, but did not specify the investment as the whole database was extracted. While denying creativity in creating the PM Abs list (see 1.), “a substantial investment in obtaining and verifying the data” was recognized in Forensic Telecommunications v The Chief Constable111 by highlighting the applied trial and error method to obtain the addresses and to collate them in the PM Abs list. In this case, the investment was also not quantified. The ruling in Football Dataco v Stan James, Sportradar112 clarified that recording the data is to be distinguished from creating the data, the resources for collecting including first recording of pre-existing data like measurements -e.g. costs of the football analysts, the processors for gathering and ascertaining the data and the database infrastructure- do count for the investment of a database protected by the sui generis right. Applying this principle to the example (attachm.1), the costs incurred by generating the flight data through the sensors will not count but those incurred after entering the industrial platform will count.
b) Art.7 (1) Database Directive prohibits the extraction or reutilization of the whole or substantial part of the contents of a database. Considering the enormous volume of data stored in a database, the quantity of extracted data can be minor. Thus, the extracted part shall be qualitatively evaluated (Art.7(1) Database Directive), which was one subject of British Horseracing v William Hill113.According to this ruling, the qualitative assessment shall “refer to the investment in the creation of the database and the prejudice caused to that investment by the act of extracting…that part”. Accordingly, the extracted part shall be assessed in relation to the scale of investment involved in obtaining, verification or presentation of the content at stake, however, was considered as a minor part of the whole database. According to Art 7(5) Database Directive, the repeated and systematic extraction of insubstantial parts unreasonably impacting the database maker is not permitted.
c) Proprietary right: The right provided under Art.7(1) Database Directive is granted to the maker of the database, i.e. ’the person, who takes the initiative and the risk of investing’ (recital 41 Database Directive). According to Art.7(3) Database Directive this right is transferable, assignable and licensable, legal characteristics of a property right (see Introduction, 4). The beneficiaries of the right are also designated as ‘right holders’ (Art.11(1) Database Directive). According to recital 29 Database Directive the employer shall be exclusively ‘entitled to exercise all economic rights in the database’ created by employees. This legal terminology indicates to characterize the sui generis right in a database as proprietary right114.
3) Conclusions and discussion
The analysis of the legal provisions enacted to protect databases and of court rulings can be shortly summarized and some unclear issues are to be raised.
a) A copyright in a database does not subsist in the creation of the data.
If creativity, intellectual efforts (skill, labour and judgement) have been expended in the selection or arrangement of data put in a database, such database enjoys copyright protection under s.3 A CDPA, Art 3 Database Directive.
The maker of a database, which fails the test for originality, can be granted a sui generis right in the database under Art 7 Database Directive subject to the investment made for obtaining, verification or presentation of the contents.
b) Although several court rulings have thoroughly analysed the facts and interpreted the relevant statutes, unclarity remains on the legal requirements as to the copyright and the sui generis right in databases115.
aa) Achieving the copyright-sufficient standard of creativity in selecting or arranging data for a database highly depends on the factual situation, the volume and complexity of the data, the applied methods of data structuring and the stage of data usage. A customized database designed to process data for a specific purpose like the ECG database in Technomed v Bluecrest Health116 needs a more structured arrangement of data than a purely informative database like the football matches database in Football Dataco v Stan James, Sportradar117. At the end, the creative selection or arrangement of data is linked to the intelligent design and introduction of suitable relation variables and their attributes, see the relational model (RM) as an approach to managing data118.For any processing issue an IT tool or algorithm to select, categorise and allocate data can be developed, if it does not exist yet. However, does the proper installation/implementation of a suitable data management system (standard or adaption) constitute ‘originality’? –Finally, the developer of the IT tool will do the intellectual creation, his work is copyrightable (see recital 5 Database Directive: ‘copyright remains an appropriate form of exclusive right for authors who have created the database’). -The hurdle for database copyright resulting from the courts’ restrictive interpretation of ‘originality’ has been realised by practising lawyers who made “practical suggestions” to overcome it by producing documentary evidence119.
bb) Since the creation of data is not protected by the sui generis right, the phase between the creation of data and its collection for a database is also unprotected, which is at disadvantage for industrial platforms, whose operators -often manufacturers-produce the data as by-product120.
According to the mentioned rulings, the investment in obtaining, verification or presentation of data stored in databases are secured, but a workable formula or elements to fix or quantify substantial investment in relation to the extracted data have not been given. Further, any calculation must be evidenced through comprehensive documentation by the database maker alleging an infringement.
All in all: The above rights in database provide very limited protection for technical data stored in a database.
Chapter 5: Trade secret protection for technical data, information and know how
In line with Art. 39 TRIPS requiring Members to ‘protect undisclosed information’, EU issued the Trade Secrets Directive in order to harmonize the legislation on the protection of trade secrets, which even did not exist in every Member State, by establishing a uniform definition of ‘trade secret’, an equivalent level of protection and consistent civil law remedies121. UK implemented it in the Trade Secrets Regulations whereby maintaining the current “measures, procedures and remedies available in an action for breach of confidence” in addition or as alternative to those provided under the Trade Secrets Regulations122. Thus, the equitable action for breach of confidence (see chap.2,2) can still be brought. Subsequently the recent court cases123, where confidential, business-sensitive information were coherently categorized as trade secrets, confidential information falling under the definition of a trade secret now enjoy a statutory protection against unlawful acquisition, use or disclosure (S.3 Trade Secrets Regulations, Art.1(1) Trade Secrets Directive).
1) Legal definition of trade secret
S.2 Trade Secrets Regulations124 defines ‘trade secret’ as ‘information which
(a) is secret in the sense that is not, as body or in the precise configuration and assembly of its components, generally known among, or readily accessible to, persons within the circles that normally deal with the kind of information in question,
(b) has commercial value because it is secret, and
(c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret;’ and
‘trade secret holder’ as ‘any person lawfully controlling a trade secret’.
This wide definition covers any kind of information fulfilling the three requirements i.e. the information is secret, has commercial value and reasonable steps have been taken to keep the secrecy. The Explanatory Memorandum125 to Trade Secrets Regulations and the recitals of Trade Secrets Directive126 explicitly name technical information and know how as subject matter of a trade secret. In respect of technical know how it is to be stated, that the above thresholds for constituting a trade secret are similar to those required acc.to Art.1(1) TTBR (see chapter 1, 4) to exempt know how from anti-trust law restrictions in respect of special anti-competitive license practices, and the secrecy ensures that the–not publicly disclosed- know how is legally protected as trade secret until a patent application is filed for it127. If the know how does not qualify for patent protection at all, it can qualify for trade secrecy protection subject to above conditions128. Thus, non-patentable know how can enjoy trade secret protection.
2) Qualification of technical data as trade secret
Neither Trade Secrets Directive (2016) nor Trade Secrets Regulations (2018) mention technical data as subject for trade secret protection, only Art.4(2a) Trade Secrets Directive mentions ‘electronic files’, which means more the medium of information than the information itself. Surprisingly, the EU Study (on emerging issues of data ownership, interoperability, (re)usability and access to data, and liability)129 dealing in detail with the legal protection of data does not refer to the Trade Secrets Directive and the therein stipulated trade secret. It also does not refer to Art.39(3) TRIPS that requires a protection of ‘undisclosed test or other data’ of pharmaceutical or of agricultural chemical products when they are submitted in the approval process.
a) Therefore, it may be concluded that the Trade Secrets Directive was not specifically designed to protect data130. However, as shown in chapter 1,1) data become information by interpretation. In case they are used in an industrial or commercial context, they transport information and fall within the scope of the definition of a trade secret. According to recital 14 of Trade Secrets Directive, only ‘trivial information’ without commercial value is excluded; acc. to par.7.1 Explanatory Memorandum, ‘commercial data’ are included. The commercial value and the secrecy of data are decisive for their protection as trade secrets. Even raw data, which are selected for a commercial purpose, for a dataset or for data analysis and mining gain commercial value131. Conclusive data combined in data-sets represent ‘components’ of information in the sense of the definition (Art.2(1)(b) Trade Secrets Directive).
b) Data qualify as trade secret if they are ‘not generally known’ or ‘readily accessible to persons within circles normally deal’ with this kind of data (S.2 (a) Trade Secrets Regulations). In view of the broad spectrum of technical data and their dissemination to relevant audiences, it is a factual issue to demonstrate their secrecy. In respect of industrial platforms, adequate organisational and technical measures are usually taken to keep the technical data confidential and secret. Only a clearly defined, restricted circle of persons, who have a “need to know”, is granted access to the data under specific user terms and procedures, including contractual, often penalised secrecy obligations in order to limit the dissemination of the data in a controlled community132. The more sensitive are the data, the more controlled is their exchange; otherwise they are endangered to get generally known and to lose their commercial value. Secure data networks without digital leaks are necessary to allow several partners of the value chain like suppliers, manufacturers and customers the access to the data and information133.
c) On the other side, these secure data /information networks with several participants at different levels raise specific legal issues as to the form of data-generation and the allocation of the data to an individual generator or actor. Technically created or machine-generated data like the operational flight data generated by sensors integrated into aircraft (Example-Attachm.1) cannot be traced to a human generator but possibly to an entity in control of the data. According to Art.2(2) Trade Secrets Directive, the trade secret holder is the person who ‘controls’ a trade secret, whereby “control” may differ from “generate” what is closer to “create” in the meaning of authorship in copyright law. In the Example, the airline operating the aircraft, the manufacturer of the sensor or the aircraft manufacturer and operator of the data platform each may be -individually or jointly- in control of the data depending on the stage of the data. Wiebe134 discussed this complex allocation problem related to a network but did not identify a specific actor and considered this problem merely as argument against “creating new data rights”. However, current legislation already provides a rule for allocating machine-generated work to an entity or individual. The rule of s.9(3) CDPA defines the author of a computer-generated work (i.e. ‘the work is generated by computer…there is no human author of the work’, s.178 CDPA) as ‘the person by whom the arrangements necessary for the creation of the work are undertaken’. The same allocation principle is applied in s.3(1) CDPA in respect of ‘the maker of the database’, the person who has made the investment in the database shall be vested with the database right. Applying this principle to industrial platforms, the operator of the platform may qualify as ‘trade secret holder’ (s. 2 Trade Secrets Regulations), ‘the person lawfully controlling’ the data. As a matter of fact, at the end the data from the different sources are sent to, collected and stored in the platform based on (explicit or implicit) contractual arrangements amongst the partners. The operator of the platform controls the data network by consent of the partners. Its entity oversees the organisational and technical issues of data collection including setting up an appropriate secrecy regime in accordance with s.2 Trade Secrets Regulations, which is a necessary condition for trade secret protection.
3) Suitability of trade secret protection for technical data, information and know how
As aforementioned the factual control of data and the technical and contractual framework to keep them secret are key to holding data as legally protected trade secrets. The existence of the trade secret is dependent on the protection system put in place and maintained by the data holder irrespective of the nature, the form of generation and circulation, the volume, the velocity and storage-medium of data. This flexibility makes trade secret a suitable, legal instrument for data and information135.
In contrast to patent and copyright, a trade secret has not to meet thresholds of novelty and originality, high hurdles for data and information which have no individual, creative elements by nature (see chap.3, 1) and 2). Even innovative know how, which does not reach a certain level of creativity, is not protected unless it qualifies as trade secret (see 1) or for protection of confidential information.
Trade secret protection sets a legal barrier for unauthorised data scraping when the targeted data are trade secrets. It provides enforceable legal remedies136 for the secret holder against violation of its trade secrets including certain protections in the event of a lawsuit against an infringer and entitles for recovery of (material and immaterial) damages in case of a wrongful acquisition, use or disclosure by a third party. These remedies are quite like those provided for infringement of IP rights.
Furthermore, a trade secret safeguards business advantage, “competitive advantage in the marketplace”137. An innovator obtains legally protected lead time until (lawful) reverse engineer by honest means occurs138 (see below). The trade secret holder is entitled to be compensated for damages due to a wrongful use by a third party (s.16 Trade Secrets Regulations), which at least may amount to the usual license fee to be paid until a second comer may lawfully revers engineer the protected information. Trade secret law ensures the integrity of shared information and facilitates the enforcement of obligations of confidence139. Information can be commercialised if it is kept secret. Through these effects, trade secret protection enables and encourages technology transfer140.
Finally, the statutorily defined trade secret provides the same legal protection for all three subjects, which facilitates their joint licensing and acknowledges the existing contracting practice (see chapter2, 5). Technical data, information and know-how are treated as connected license objects; the same remedies can be enforced in case of breach.
4) “Weakness” of trade secret protection
According to Art.3(1) Trade Secrets Directive141, the acquisition of a trade secret is lawful, when it is obtained by ‘(a) independent discovery or creation; (b) observation ,study, disassembly or testing of a product or object that has been made available to the public or that is lawfully in the possession of the acquirer of the information…”. Thus, data, information, know how independently developed or gathered from alternative or public domain sources can be used. They can also be extracted from trade secret holder’s products or disseminated information being available on the market. In principle, reverse engineering is permitted.
Technical data, information and know how lose the trade secret protection, when their secrecy disappears, as the existence of trade secret inherently depends on it.
5) Trade secret as proprietary right?
Trade secrets do not grant any exclusive or absolute right142, a positive right to exclude third parties. Whilst acknowledging “relative protection” or “some feature of property” like factual transferability and economic exploitation, trade secrets are not considered as full property right in literature143. Trade secret is characterized as “peculiar property right” or “disappearing property right” as it ceases to exist upon becoming generally known144 or “the other IP right”145.
Against the property-based concept for IP rights granting exclusivity, the trade secrecy regime is rather “a conduct-based liability rule”146, which forbids unlawful activity and may better suit to unfair competition law. Such conduct-based approach is laid down in Art.4 (2) Trade Secrets Directive, which refers to ‘(a) unauthorised access to, appropriation of, or copying any document…, containing the trade secret…; (b) any other conduct which, under the circumstances, is considered contrary to honest commercial practices.’ However, this infringement provision is designed and structured in a similar manner as those for copyright, which also describe infringing acts (ss.16-21 CDPA) not authorised by the right holder and refer to the underlying right or entitlement. As regards trade secret, the subject of the right is the protected secret information with commercial value. The differences are the “exclusivity” granted to the right holder and the “intellectual” or “creative” nature of classic IP rights. In case of trade secret, the factual efforts of establishing and maintaining secrecy justify the right. A trade secret can be enforced against everyone, who has obtained it unlawfully; the enforceability is an essential element of a proprietary right (see Introduction 4). Therefore, the trade secret as set out in the Trade Secrets Directive, -Regulations can be categorized as “almost equal” or at least “semi-IP right”. The same arguments matter as stated in chap.2, 5) regarding the IP-like treatment of confidential information.
Chapter 6: Conclusions
1) As intangible, immaterial objects technical data, information and know how do not fulfil the requirements for possession-based property rights.
2) Due to non-patentable subject-matter data cannot be protected as patent. Technical information does not reach the required level of novelty of a patent. Technical know-how subject to its inventiveness may be patentable.
3) Technical data and information as such are not copyrightable. They are protected by copyright, if the forms of their expressions are enriched by sufficiently creative elements.
4) A database enjoys copyright protection, if intellectual efforts have been expended in the selection or arrangement of the data stored in the database. The maker of a database is vested with a sui generis right in the database subject to the investment made for obtaining, verifying or presenting the data. Such right is a proprietary right.
5) Technical data, information and know how each can enjoy the protection as trade secret which is a flexible instrument for their commercialisation, and which is to be considered as property-like right. Their common informative nature requires the same legal protection. If there is a need for an absolute protection, the discussion about it should be focused on know-how as the most informative and creative object.
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1 In 2006, Clive Humby, UK mathematician, created the phrase: “Data is the new oil. It is valuable, but unrefined it can not really be used. It has to be changed into gas, plastic, chemicals, etc to create a valuable entity that drives profitable activity; so, must data broken down, analysed for it to have value.” https://www.quora.com/ who-should-get-credit-for-the quote-data-is-the-new-oil.
2 EC Staff Working Document, p.12 seq., https://ec.euroa.eu/digital-single market-en/news/staff-working-document.
3 Ibid., p.18.
4 Ibid., p.19-23 (with the finding, that “a policy on issues of ‘data ownership’ has not been formulated yet”).
5 Ball, p.20.
6 Cornish, 1-04.
7 Clarke,Kohler, p.155; Kemp,Hinton,Garland, p.7.
8 Clarke,Kohler,ibid.
9 [1965]AC 1175, par.1247-1248.
10 Clarke,Kohler, p.156.
11 Clarke, Kohler, p.347 (no “numerus clausus”).
12 Ball, pp.23, 30; see also Clarke, Kohler, pp.345,348 seq. (dynamic nature of property).
13 Ball, p.30; see also Kemp, Hinton, Garland, in Fn 19 in respect of the right to enforce confidence.
14 See under „signs “in Commens Dictionary: Peirce’s Terms in His Own Words, new.ed.2014.
15 The terms data, digitalization, software, algorithm, database, data management system are defined in https://en.wikipedia.org/Data_(computing). They are used in the overall text.
16 See technical product documentation ISO 01.110 www.iso.org/ics/01.110/x/.
17 Issued by UK MOD, MAA on 30 Nov.2018.
18 Issued by Secretary of State; see also detailed definition of (US) ITAR 120.10(5) “Technical Data means information for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance, or modification of controlled products”.
19 See ISO standards www.iso.org/deliverables, which “provide requirements, specifications, guidelines or characteristics that can be used consistently to ensure that materials, products, processes and services are fit for their purpose.” For example, ISO/IEC 16022 (2014) defines the requirements for the symbology known as Data Matrix in information technology.
20 Definition of know how under Art.1 (lit. i ) TTBER.
21 See accounting standard IAS 38 https://www.iasplus.com/standards/ias/ias38.
22 [1979]68 Cr.App.R.par.183
23 Ibid., par 184.
24 Ibid.
25 See Hull, CLR, pp-246 seq.
26 [2014]EWA Civ 28
27 Ibid., par.11,13.
28 Ibid., par. 17,25.
29 Ibid., par 42.
30 [1948]1. WLUK 12 and [1963]3 AII ER 413 (design drawings for the manufacture of machine tools).
31 [1964]1.W.L.R.96 (manufacturing of brassieres).
32 [1965]1 W.L.R.1293 (employment contract: leaving employee used confidential technical knowledge of his previous employer for new employer).
33 [1963]3 AII ER 413, par. 415.
34 [1967]1 W.L.R.923 (know-how for the manufacture of carpets grip).
35 Ibid., par 931.
36 [1967]AC 46, par 127-128 (commercial information).
37 Ibid., par 128.
38 [2007]UKHL 21
39 Ibid.
40 Campbell v MGN[2004]UKHL 22, par.13; Vestergaard v Bestnet[2013]1W.L.R.1556, par.23 (subject of action: a secret information/ recipe on choice of chemical additives for insecticidal mosquito nets); Force India Formula One Team v Malaysia Racing Team[2012]EWHC 616, par.215 (design elements of a Formula One racing car).
41 See Attorney-General v Guardian Newspapers Ltd (No.2)[1990]1 A.C. 109, par.281.
42 Fn36., par.127.
43 [2012]UKSC 28.
44 Ibid., par 20. …the different view in Boardman v Phipps cannot prevail here.
45 Ibid.; par. 26, 32-33.
46 [2012]EWA Civ 1214.
47 Ibid. par 122, see also par.130, 141, 159.
48 Ibid., par. 111.
49 [2013]EWAC Civ 886.
50 Ibid., par 49.
51 Ibid., par 50,54.
52 [2012]EWCH 616 (Ch), par.376-378.
53 Ibid., par. 226 (5b), par 237
54 [2011]EWCA Civ 424 par.56.
55 Fn.46, par.378.
56 [1998]1 W.L.R.951.
57 Ibid., par.956.
58 Ibid.
59 Aplin, Confidential Information as Property; Cornish, Intellectual Property, 8-32; Arnold, Law Quarterly Review 2003, p.195: “the implicit proposition that confidence is a proprietary right is doctrinally unsound”).
60 Ibid./ Fn. 38.
61 Fn.46.
62 Aplin, pp.177 seq.
63 Aplin, p.172, Fn.5.
64 Aplin, pp.191-196; these criteria have been mentioned in Introduction under 4).
65 Ibid., p.192.
66 Ibid., p.194.
67 Ibid., p.196.
68 See sample Patent and Know-How License Agreement https://content.next.westlaw.com/Document
69 UNIDO, Manual on Technology Transfer Negotiation, 1996:” The inherent proprietary value of know-how lies embedded in the legal protection afforded to trade secrets.” https://www.unido.org/.../manual-technology-transfer-negotiations.
70 UK is signatory member to TRIPS.
71 EPO’s Guidelines for Substantive Examination C IV 9.4” (ii) establishing the ‘objective technical problem’ to be solved”.
72 Cornish, 5-30, 5-36.
73 S. 14(2) b PA 77.
74 S.2 (2) PA 77: “…all matter (whether a product, a process, information about either, or anything else) which has at any time before the priority date of the invention been made available to public”.
75 See FN 16 chap.1) technical product information.
76 Aplin, Davis, IP Law, p.78 seq.
77 Exxon v Exxon Insurance[1982]Ch 119.
78 Navitaire v Easyjet Airline[2005]E.C.C.30.
79 Aplin, Davis, IP Law, p.95.
80 See Ladbroke (Football)Ltd v William Hill (Football)[1964]1 WLR 273.
81 Technomed v Bluecrest Health[2017]EWHC 2142 (Ch).
82 Ibid, par.103-135 i.e. par.103-109 ad (i), par.112-114 ad (ii), par.116-122 ad (iii), par.131-134 ad (iv).
83 Ibid., par.103,108 referencing to SAS Institute Inc v World Programming Ltd [2013[ EWHC 69 (Ch) at 41.
84 Ibid, par 108/9.
85 Ibid., par 112.
86 Ibid., par. 114.
87 Ibid.par., 119-122.
88 Ibid., par 133.
89 [2011]EWHC 2892 (Ch).
90 Ibid., par 83, par 88: “…the PM Abs List is a table which is a database, albeit a very simple one. The PM Abs addresses in it are both systematically and individually accessible, because the list is arranged into columns and rows.”
91 Ibid., par 84.
92 Ibid., par 94.
93 SAS Institute Inc v World Programming Ltd[2010]EWHC 1829, par 207.
94 SAS Institute Inc v World Programming Ltd (C-406/10),[2013]Bus.LR.941, par 67.
95 Infopaq v Danske Dagblades (C-05/08[2009]ECDR 16, par.44-46.
96 Identical provisions in Art.9 TRIPS, Art.2 Berne Convention,
97 FN 89.
98 Kemp, Hinton, Garland, p.7; Hoeren, p.2; Harison, 102 („Facts and other objective items of information cannot be protected by copyrights, as they lack creative properties”); Wiebe, p.879 (“Raw data measured by sensors or produced by machines would not be covered, save for rare cases where automatic production already involves sufficient creativity…”).
99 See Commission Staff Working Document, p.19; EU Study, p.267 Fn. 320 “via proprietary formats”.
100 Identical definition in Art.1(2) Database Directive.
101 [2013]EWCA Civ 27, par.25.
102 Identical condition in Art.3(1) Database Directive.
103 Case C 604/10[2013]FSR 1, par 38.
104 Ibid, par 42,44.
105 [2011]EWHC 2892 (Ch), par.90.
106 Ibid.
107 [2017]EWHC 2142 (Ch), par.98, database is described at par.27.
108 The UK Copyright and Databases Regulations (SI !997/3032) implemented Art.7 Database Directive.
109 Leading EUCJ ruling British Horseracing Board Ltd v William Hill Organization Ltd[2004]ECR I-10415 par.31, quoted in Football Dataco v Stan James, Sportradar[2013]EWCA Civ 27 at par.31.
110 [2017]EWHC 2147 (Ch), par.75-77.
111 [2011]EWHC 2892 (Ch) par.122/3
112 Football Dataco v Stan James, Sportradar[2013]EWCA Civ 27, par.37 seq.,84.
113 British Horseracing Board Ltd v William Hill Organization Ltd[2004]ECR I-1041, par.69,71.
114 Cornthwaite, p.328 “fits quite readily into the pattern of intellectual property rights”.
115 Cornish, 20-43 „convoluted and uncertain form”; Thomson, p.231 “inconsistencies remain…narrow scope…”.
116 See FN. 81.
117 See FN 109.
118 https://en.wikipedia.org/wiki/Relational_model. RM organizes data into one or more tables of columns and rows with a unique key identifying each row.
119 See Kemp, Hinton, Garland, p.10 seq. (“…include language in methodologies and technical specifications that articulate that relevant resulting datasets and databases…are the products of the company’s own ‘intellectual creation’ following Football Dataco…”).
120 Wiebe, p.879; critically also Harison, p.107; Kemp, Hinton Garland, p.11 with the suggestion to amend processes.
121 These aims are set out in Recitals 6-8 Trade Secrets Directive, see also 7.2-7.5 Explanatory Note UK.
122 S.3(2)(3) Trade Secrets Regulations.
123 Force India Formula One Team v Malaysia Racing Team; Vestergaard v Bestnet, see chapter 2,3); Lansing Linde Ltd v Kerr[1991]W.L.R. 251, par 260: “Trade secret is information which, if disclosed to a competitor, would be liable to cause real (significant) harm to the owner of the secret…., it must be information used in a trade or business, and secondly the owner must limit the dissemination of it...”.
124 Incorporating word by word the identical definition of Art.2(1) Trade Secrets Directive and Art.39(2) TRIPS.
125 Par.7.1 „technological information and product information “.
126 Recitals 1 „technological knowledge “, “valuable know how”, 14 „ know how…technological information”.
127 See Pooley, WIPO Magazine, p.3.
128 Reichmann, p.194 (protection for “the sub patentable innovations”).
129 Final report published by European Commission 2018, Annex 1-Outcome of the legal mapping/overview on national legislation mentions the trade secret protection in Finland (p.184), in Latvia under commercial law, in Lithuania (p.185 seq.) “data may qualify as commercial or industrial trade secrets”.
130 Wiebe, p.880.
131 Pooley, WIPO Magazine, p.1; Cristiana Sappa, p.521; Wiebe, p.880.
132 See EU Study, p.284 „Data transfer is usually handled in individual contracts and rooted in established business relationships”.
133 See EU Study, p.271-281, showing the different types of actors and their data originated, collected and transferred in modern industrial processes.
134 Wiebe, p.883 seq.
135 Cristiana Sappa, p.519, 522 highlighting the utility of trade secrets protection in the IoT; Pooley, WIPO Magazine, p.1 (secrecy as a matter of practice).
136 S. 11 (Interim measures: the cessation or prohibition of use or disclosure of trade secret, the prohibition of production, offering…the seizure of infringing products), s.14 (Injunctions or interdicts and corrective measures), ss.16, 17 ( Compensation of damages), s.18 ( Publication of judicial decisions) Trade Secrets Regulations implementing the corresponding remedies under Trade Secrets Directive, see Explanatory Note.
137 Par. 2.1 Explanatory Memorandum.
138 Reichmann, p.189 (“lead time conceptually enables a first comer to recoup investment in R&D”); see EU Study, p.284 seq. referring to the timely advance of “12-18 months until the competition is able to reverse engineering” in the field of machinery.
139 See Pooley, WIPO Magazine, p.2, 4.
140 Ibid.
141 This provision has not been incorporated-accidentally or intentionally- in Trade Secrets Regulations. Ironically, “Reverse engineering in case of commercial secrets is an unexplored issue for English confidentiality law.”, Tanya Aplin, Reverse Engineering, p.341.
142 Recital 16 Trade Secrets Directive: “the provisions of this Directive should not create any exclusive right to know-how or information as trade secrets.”
143 Cristiana Sappa, p.520, particularly FN 25; Wiebe, p.879, p.881 no “form of protection to data as such that is comparable to an IPR”; Pooley WIPO Magazine, p.2.; see also Reichmann, p.186; Ball, p.27
144 Reichmann, p.186 seq. “there is a property right in trade secrets in the form of entitlement to either lead time or compensation for lost lead time due to a wrongful appropriation”.
145 Pooley, WIPO Magazine-title.
146 Reichmann, ibid.
- Quote paper
- Adolf Maier (Author), 2019, Ownership. Proprietary Rights in Technical Data, Information and Know-How, Munich, GRIN Verlag, https://www.grin.com/document/495901
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