Protection of Trade Secrets in the Andean Region

Author:Ms María De Lourdes Meneses
Profession:D'Empaire Reyna Bermudez Abogados

I. Introduction

The protection of Trade Secrets has taken place in the Andean Region since the nineties, with the adoption of economic liberation policies. The protection of Trade Secrets has been mainly regulated by the regulations of the Andean Community and by the internal regulations regarding unfair competition.

In this article we make emphasis to the economic importance of trade secrets, and we make a brief synopsis of the most relevant items of the trade secrets protective legislation.

II. Economic importance of Trade Secrets

In recent years the economic science has abandoned the idea that the economic development is proportional to the accumulation of the material capital. Without overlooking this element, it has been proven that the greatest part of the quantitative increase of production and its qualitative modifications are originated by the use of new knowledge applied to the productive activities1.

This development and application of technology takes place, in great measure, by information exchange, through different mechanisms supported by the legal order between the economic agents that originate them and those who use them. It is easy to deduce that the elaboration of regulative instruments that make easier the creation, protection and circulation of technology constitute one of the most important conditions in the growth process of the productive system.2

A part of this information that is subject to this exchange between the economic agents is mainly represented through (i) the technical data contained in the patent documents (ii) the technical or commercial information kept secret by the owner.

The patented knowledge are subject to a special regime of legal protection, incorporated in Decisión 486 of the Andean Community ( "Decision 486") and its complementary regulations based on the granting to the holder of a patent of the exclusive right to exploit the corresponding invention for a qualification and therefore lose, the possibility of obtaining legal ward directed to the confidential knowledge. Likewise, the mechanism of transmission of rights regarding the exploitation of patented inventions is substantially different from that regarding secrets3.

However, the economic transcendence of trade secrets is stands out even more than patents if it is observed that the acquisition, maintenance and transmission of the information object of the secret is not conditioned to be evaluated by any authority as a requirement for its protection; nor it is subject to payments of rates or periods of time of effectiveness for its exploitation.

The holder or the owner of the information will have the option between obtaining a patent and the maintenance in secret of that knowledge that may be subject to be warded by the patent regime as well as by that applicable to the not- patented technology. Obviously, the knowledge that are not subject to be patented Hill not have this option.

These characteristics may present trade secrets as an attractive figure in the design and execution of commercial policies for the economic agents (for it may represent a comparative advantage for the owner without meeting any formality and for an undetermined period of time), but due to its secret character it represents an obstacle for the diffusion of technology and the circulation of technical knowledge.

III. Andean Community Regulations

The regulations of trade secrets in the countries member of the Andean Community are established in (i) Decision 486 and (ii) internal regulative laws of unfair competition.

Decision 486 establishes a complete protection system of trade secrets. In such regard, Decision 486 qualifies any violation of trade secrets as acts of unfair competition, which may be sanctioned by the corresponding institutions in accordance with the internal legislations of each member country.

In general, Decision 486 establishes that that who legally has control of a trade secret will be protected against the disclosure, acquisition or use of said secret in opposed manner to the loyal commercial practices by third parties.

  1. Definition of Trade Secrets

    In accordance with Decision 486 trade secrets are defined as any non-disclosed information that a natural or artificial person legitimately owns, that may be used in any productive, industrial or commercial activities, and that may be transmitted to third parties.

    The information of a trade secret may be referred to (i) the nature, characteristics or purposes of the products (ii) the methods or processes of production, and (iii) the means and ways of distribution or commercialization of the products or services.

    The repealed Decision 344 regarding the Common Regime of Industrial Property that for the first time, regulated in the heart of the Andean Regime everything regarding secrets used the term "Industrial Secrets", limiting it, at least conceptually, to the information regarding the industry leaving aside from the commercial information.

    Decision 486 introduced a new way to name the information subject to protection, calling it "Trade Secret", that covers industrial secrets as well as trade secrets. However, the legal property guarded by these figures is referred to reserved knowledge about ideas, products or proceedings, means and ways of distribution or commercialization of products and services.

  2. Requirements of Trade Secrets

    Trade Secrets...

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