Compelling Trade Secret Transfers

Abstract

The unprecedented COVID-19 virus has brought to the forefront many challenges associated with exclusive rights in information, data, and know-how, all of which may constitute protected trade secrets. While patents have received more attention, trade secret information has limited the ability to perform research, develop, test, gain regulatory approval for, manufacture, and distribute globally and at sufficient scale and affordable prices the needed vaccines, therapeutics, diagnostics, medical devices, and personal protective equipment. Voluntary licensing efforts have proven inadequate to supply pandemic needs. Thus, compelling the transfer or licensing of trade secrets is needed to properly address COVID-19, but more importantly, to address future pandemics and other serious global problems such as climate change.

This Article explains the nature of trade secrets and their protection. It then describes the failures in COVID-19 responses resulting from trade secrets that were not voluntarily licensed. It explains why patent law disclosures have been inadequate to assure competitive global research, development, and production.

Given the need for compelled trade secret transfers, the Article surveys the relevant international intellectual property law treaties addressing trade secrets. It demonstrates that, consistent with international law obligations, governments are free to compel trade secret transfers. Further, governments may not be obliged to award compensation for such transfers when regulating to address public health. Given this national freedom to act, the Article then provides numerous examples of existing United States, European, and some other authorities that have been or could be used to compel the transfer or licensing of trade secrets. It also notes the potential to adopt more explicit legislation authorizing compelled or induced behaviors. This survey of authorities illustrates that compelling trade secret transfers or licensing should be unobjectionable whenever there is a need to protect lives, health, or the economy. Accordingly, the Article provides a first critical step toward rethinking the nature of international trade secret protections, and it seeks to develop the political will for governments to protect the global public from the harms that trade secret rights can generate.

Keywords: COVID, trade secrets, licensing, patents, phrma, knowledge transfer, TRIPS, DPA, vaccine, know-how, show-how, proprietary, confidential

JEL Classification: I18