jeudi, décembre 16, 2010

Puerto Rico: The Trade Secrets Act: protection offered for non-patentable essential information

The Trade Secrets Act: protection offered for non-patentable essential information

Contributed by Ferraiuoli Torres Marchand & Rovira


For the first time, the Puerto Rico Senate is considering the approval of a statute that would protect valuable trade secrets belonging to businesses and individuals alike. This represents a significant advancement for the protection of intellectual property in Puerto Rico. It is a well-known fact that 'trade secrets', as they are commonly referred to, protect highly valuable information for businesses.

According to the preamble to the Trade Secrets Act, trade secrets protect all confidential information that is generally non-patentable, but is necessary to carry out business objectives. The information that may be protected by the act includes any formula, compilation, method, technique, process, recipe, design, treatment, model or pattern used by the business or individual. However, in order for the information to be protected by the act, the business or individual must demonstrate that it complies with two essential requirements:

  • The information possesses an economic value or advantage that is not accessible to third parties.
  • The information has been protected by reasonable security measures.

Under the act, 'reasonable security measures' are those measures that the business or individual carries out in order to ensure limited access to the information, including the following efforts:

  • non-disclosure of the information;
  • limitation of the number of employees authorised to access the information;
  • a requirement that those employees authorised to access the information sign confidentiality agreements;
  • storage of the information in a separate location from other information;
  • labelling of the information as confidential;
  • measures to prevent indiscriminate reproduction of the information;
  • establishment of control measures for the use and access of the information by employees; and
  • implementation of available technology to avoid dissemination of the information through the Internet or electronic correspondence.

Persons that misappropriate or disclose a trade secret without authorisation will be responsible for all damages caused to the owner of the trade secret. For the purposes of the act, a person engages in misappropriation if he or she acquires a trade secret from another person and knew or should have known that it was acquired through inappropriate means. Consequently, a trade secret is acquired through inappropriate means when, without implicit or explicit authorisation, an individual or corporation gains knowledge of the trade secret.

The act establishes a special procedure through which the owner of the trade secret can, by means of a detailed, sworn complaint, request an immediate ex parte cease and desist order, under penalty of contempt, to prevent the use or disclosure of the trade secret. On the other hand, the act establishes that once misappropriation of a trade secret has been confirmed, the plaintiff need not prove the occurrence of an irreparable harm in order for the court to issue a cease and desist order. The act also establishes that the plaintiff will have a right to material damages caused by misappropriation of the trade secret. If the appropriation was intentional or in bad faith, the damages may be tripled and the plaintiff will also be awarded attorneys' fees.

For further information on this topic please contact Eugenio J Torres-Oyola, Laura Belendez or Maristella Collazo at Ferraiuoli Torres Marchand & Rovira by telephone (+78 7766 7000), fax (+78 7766 7001) or email (etorres@ftmrlaw.com, lbelendez@ftmrlaw.com, or mcollazo@ftmrlaw.com).