Compiled by Darren Olivier

Partner

The Corrupting of Amber

Actio servi corrupti

“action for making a slave worse”

or

“an action for corrupting a servant”

Trade Secrets – An Introduction

Requirements:

Information which is

• useful in trade or industry

• kept confidential

• valuable by providing entity with a competitive edge

• includes negative info such as research options which proved ineffective

The definition is broad – whether info qualifies as a trade secret is a question of fact

Using Trade Secrets To Your Advantage

Trade Secrets – An Introduction Continued

Advantages of Trade Secrets

Trade Secrets Patents

Indefinite protection Limited time frame for protection

No registration costs Procedural costs

Immediate effect against competitors

and non-competitors

Effective once procedure = complete

No formal compliance required Must comply with formalities –

disclosure

Trade Secrets – An Introduction Continued

Disadvantages of Trade Secrets

Trade Secrets Patents

If the secret is embodied in an

innovative product, it may be reverse-

engineered Exclusive right to exclude third parties

from commercial use Once the secret is made public,

anyone may have access and use it at

will

Difficult to enforce Simpler to enforce, stronger

protection

May be patented by someone else

who developed the info by legitimate

means

You may patent anything that

complies with the requirements

Trade Secrets – Protecting Yourself

Contractual Protection • Contract of service implies some protection

• Confidentiality

• Restraint of trade

Breach • Employee furnishes secret to opposition

• Employee uses secret for their own benefit (no clear-cut test)

Remedies • Claim based on unlawful competition

• Claim for contract

• Interdict, damages and cost

Protection After Termination • Two conflicting interests must be balanced: employer v employee

• No concrete guidelines

– Step 1: is it a Trade Secret?

– Step 2: If yes, is use thereof reasonable and therefore justified?

Trade Secrets – Protecting Yourself

• Employed for specific purpose • Small contribution • Only contributor

• Deliberate commitment to memory • Photocopying material • Takes material home

• Employed for 25 years • Senior position

• Employee accepts similar job at similar company • Many similar companies • Work is in public domain

Using Trade Secrets To Your Advantage

Coca-Cola

• “World of Coca-Cola” in Atlanta

• “Vault of the Secret Formula”

• Secret Formula 4-D Theatre

Using Trade Secrets To Your Advantage

KFC

•11 secret herbs and spices •Original recipe chicken

•colonelsanders.com

Using Trade Secrets To Your Advantage

Using Trade Secrets To Your Advantage

Trade Secrets – Changes to be aware of

Exchange control • Amendment to the Exchange Control Regulations made under Section 9 of

the Currency and Exchanges Act 9 of 1933 in June 2012

• “Capital” subject to exchange control provisions includes any intellectual property right, whether registered or unregistered

Workplace Environment • Confidentiality

• Protectable interests