On Boxing Day 2021, The Observer published an article by Robin McKie entitled The Great British Race to Space. It featured efforts by companies operating in different parts of the United Kingdom using different technologies to launch the first satellite into low earth orbit from British soil. One of those companies is B2Space Ltd. which plans to launch a satellite bearing rocket from a high altitude helium balloon. B2Space appears to be based in Newport and operates in Eyrri in Northwest Wales.
B2Space is just one of a growing number of space businesses in Wales. Space Wales maintains a "Capability Matrix" of businesses in the sector. Linking those businesses to resources in the universities, government and international agencies, Space Wales is developing a strategy for the sector. According to the organizers of the UK Space Conference at Newport, Wales saw a 34% increase in the number of organizations and a 40% increase in employment in that sector between 2015 and 2019 albeit from an admittedly small base (see The Space Sector in Wales is growing).
The legislation that has made this growth possible has been the Space Industry Act 2018 which I discussed in Commercial Exploitation of Space: Space Industry Act 2018on 10 April 2018. I outlined the licensing regime in Space Industry - Licensing Spaceportsthe next day. The new technologies developed by the Welsh space industry will require legal protection and I discussed those issues in The Role of Intellectual Property in Space Commerceon 19 July 2019 in NIPC Cornwall. Although I had in mind the businesses that have mushroomed around Newquay airport in Cornwall the issues mentioned in the article apply equally to the businesses around Llanbedr and elsewhere in Wales.
Anyone wishing to discuss this article may call me on 020 7404 5252 during office hours or send me a message through my contact form.
A patent offers the most comprehensive protection of new technology. It confers a monopoly that can last for up to 20 years of the manufacture, disposal, marketing, use, importation or keeping of a new product or the use of a new process including a monopoly of the disposal, marketing, use, importation or keeping of any product obtained directly from the process.
However, such monopolies are not granted lightly. Every invention is examined for novelty, inventiveness, utility and compliance with the relevant legislation. That is a lengthy and complex process for which an applicant will almost certainly require the assistance of a patent attorney and, in some cases, patent counsel. According to the guidance Patenting Your Invention only 1 in 20 applicants gets a patent without professional help. Such help does not come cheap. The same guidance note states that an application for a patent for the UK alone typically costs £4,000. If the application is granted there are renewal fees which in many countries rise throughout the term of the patent. If the validity of the patent is challenged or the patent is infringed the cost of invalidity or infringement proceedings can run into many hundreds of thousands or even millions of pounds
A condition of the grant of a patent is that the specification must disclose the invention in a manner that is clear enough and complete enough for the invention to be performed by a person skilled in the art. Should the application be refused or should a granted patent be revoked, anyone in the world may make, market, distribute or use the invention. Indeed, anyone in a country in which patent protection has not been obtained may freely work that invention.
Not every invention can be patented. S.1 (2) of the Patents Act 1977 excludes from patentability:
"(a) a discovery, scientific theory or mathematical method; (b) a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever; (c) a scheme, rule or method for performing a mental act, playing a game or doing business, or a program for a computer; (d) the presentation of information."
That exclusion covers great swathes of innovation in our increasingly services orientated internet-based economy. Happily, there are other ways of protecting a new technology.
If the invention cannot easily be reverse engineered it may be better to keep it secret. The law of confidence bolstered recently by the Trade Secrets Directive prevents unauthorized use or disclosure of secret technical or commercial information. A restriction on unauthorized use or disclosure lasts until the information is in the public domain. In some cases, that can be a very long time. The recipe for Coca Cola has been kept secret for more than a century and the recipe for Chartreuse for very much longer. The information has to be secret, it must have some inherent value and it must be imparted in circumstances giving rise to an obligation of confidence. Usually, that means a confidentiality agreement but there are other circumstances where an obligation of confidence will be implied. For instance, a patent attorney is bound by such an obligation when he or she advises an inventor on the patentability of a new invention. The information technology industry, in particular, relies heavily on trade secrecy law to protect algorithms, source codes and other unpublished information.
Many innovative new products, particularly in the consumer electronics, fashion and beauty, toys and novelty industries, have a very short shelf life. For them, short term protection from copying is enough. The UK is one of a very small number of countries that protects "the design of the shape or configuration (whether internal or external) of the whole or part of an article" from unlicensed reproduction. Such protection, known as "unregistered design right" subsists automatically in original designs. There is no need for examination, registration or professional help. Design right protection can last up to 15 years if the design is not exploited by the marketing of articles made to the design or 10 years where it has. However, in the last 5 years of the design right term, anyone in the world can apply to the design right owner for a licence to use the design as of right. Any dispute over the terms of the licence can be settled by the Intellectual Property Office.
Although computer programs as such cannot be patented, computer programs, preparatory design material for computer programs and databases are specifically included in the definition of "literary work". Copyright subsists automatically in original literary works and lasts for the life of the author plus 70 years. There is no need for registration in the UK or most other countries. It is however important to note that copyright provides protection against copying. It does not prevent the making of a similar or even identical work provided that there has been no copying of or reference to the copyright work. IT and many other industries that supply goods and services over the internet rely heavily on copyright.
The breeding of new varieties of seeds and plants is an increasingly important technology in view of climate change. In the USA and some other countries, it is possible to obtain plant patents (see General Information About 35 U.S.C. 161 Plant Patents on the US Patents and Trademark Office website). In the UK plant breeders' rights are protected by registration with the Plant Variety Rights Office under the Plant Varieties Act 1997 (see Plant Breeders' Rights).
It is important to bear in mind that consumers are often drawn to a new product by its shape or reputation rather than the technology under the hood. Designs of new products with individual character can be registered under the Registered Designs Act 1949 for up to 25 years. They are also protected by unregistered design rights and a new supplementary unregistered design right. The surface decoration of a fabric, wall covering or other product can usually be protected from copying by copyright. Occasionally, the article itself qualifies for protection as a work of artistic craftsmanship. The reputation of a product or service is its brand. Brands are protected in the UK by the registration of their name, logo or other indicia as a trade mark and by the common law of passing off.
Anyone requiring additional information on any of those matters should fill in the following form.
I had a good day at M-SParc yesterday. I discussed trade secrets and non-disclosure agreements with the Enterprise Hub between 12:00 and 13:00. For the rest of the afternoon, I held pro bono one-to-one consultations with some of the individuals who had attended my talk as well as other business owners and entrepreneurs.
For the purpose of my talk, I defined "trade secrets" as "secret business or commercial information the unlicensed use or disclosure of which could benefit a recipient of the information or harm the person who is entitled to prevent such use or disclosure." A trade secret can be an invention before the filing of a patent application, the source code of a computer program, a customer list or a business plan.
Until the 9 June 2018, the unauthorized use or disclosure of trade secrets was prevented by the law of confidence which had been developed by the courts over many years. In Coco v AN Clark (Engineers) Ltd [1968] F.S.R. 415, [1969] RPC 41 Mr Justice Megarry summarized that law as follows:
"I would regard the recipient as carrying a heavy burden if he seeks to repel a contention that he was bound by an obligation of confidence.’
‘First, the information must be of a confidential nature. As Lord Greene said in the Saltman case . . ‘something which is public property and public knowledge’ cannot per se provide any foundation for proceedings for breach of confidence. However confidential the circumstances of communication, there can be no breach of confidence in revealing to others something which is already common knowledge. But this must not be taken too far. Something that has been constructed solely from materials in the public domain may possess the necessary quality of confidentiality: for something new and confidential may have been brought into being by the application of the skill and ingenuity of the human brain . . Novelty depends on the thing itself, and not upon the quality of its constituent parts . . whether it is described as originality or novelty or ingenuity or otherwise, I think there must be some product of the human brain which suffices to confer a confidential nature upon the information.
The second requirement is that the information must have been communicated in circumstances importing an obligation of confidence. However secret and confidential the information, there can be no binding obligation of confidence if that information is blurted out in public or is communicated in other circumstances which negative any duty of holding it confidential. From the authorities cited to me, I have not been able to derive any very precise idea of what test is to be applied in determining whether the circumstances import an obligation of confidence. In the Argyll case, Ungoed-Thomas, J. concluded his discussion of the circumstances in which the publication of marital communications should be restrained as being confidential by saying ‘If this was a well-developed jurisdiction doubtless there would be guides and tests to aid in exercising it’. In the absence of such guides or tests he then in effect concluded that part of the communications there in question would on any reasonable test emerge as confidential. It may be that that hard-worked creature, the reasonable man, may be pressed into service once more; for I do not see why he should not labour in equity as well as at law. It seems to me that if the circumstances are such that any reasonable man standing in the shoes of the recipient of the information would have realised that upon reasonable grounds the information was being given to him in confidence, then this should suffice to impose upon him the equitable obligation of confidence. In particular, where information of commercial or industrial value is given on a business-like basis and with some avowed common object in mind, such as a joint venture or the manufacture of articles by one party for the other, I would regard the recipient as carrying a heavy burden if he seeks to repel a contention that he was bound by an obligation of confidence: see the Saltman case . . On that footing, for reasons that will appear, I do not think I need explore this head further. I merely add that I doubt whether equity would intervene unless the circumstances are of sufficient gravity; equity ought not to be invoked merely to protect trivial tittle-tattle, however confidential.
Thirdly, there must be an unauthorised use of the information to the detriment of the person communicating it. Some of the statements of principle in the cases omit any mention of detriment; others include it. At first sight, it seems that detriment ought to be present if equity is to be induced to intervene; but I can conceive of cases where a plaintiff might have substantial motives for seeking the aid of equity and yet suffer nothing which could fairly be called detriment to him, as when the confidential information shows him in a favourable light but gravely injures some relation or friend of his whom he wishes to protect. The point does not arise for decision in this case, for detriment to the plaintiff plainly exists. I need therefore say no more than that although for the purposes of this case I have stated the proposition in the stricter form, I wish to keep open the possibility of the true proposition being that in the wider firm."
For the rest of my talk, I discussed confidentiality or non-disclosure agreements which is one of the "circumstances importing an obligation of confidence" that Mr Justice Megarry is likely to have had in mind in Coco v Clark. Those agreements are easy enough to draft but much less easy to enforce in infringement proceedings. Defendants tend to argue that the agreement was not intended to cover the information in question, that it was not really confidential or that the claimant is not entitled to rely on it for some other reason. In There's more to the Law of Confidence than NDAs14 Oct 2019 NIPC Inventors Club, I wrote:
"If you want to rely on the law of confidence, print a form in duplicate on no carbon required paper with boxes for:
The name and full postal address, job title, email, telephone and other contact details of the confidante and those of his or her employer if they are different.
Identify the information to be delivered and the way in which it is to be passed (that is to say, private conversation, whether it is is a document and if so what it contains).
An acknowledgement that the information has been disclosed in confidence.
A finite period in which the confidante can contentod that the information is not confidential at all and a rapid and cost-effective way of resolving such contentions such as expert determination or expedited arbitration.
The use to which the information may be put.
A deadline for the return of confidential documents and may have been made.
Submission to the jurisdiction of the English courts.
Every single confidential conversation and the delivery of every single document should be recorded and logged separately. If any of the conditions is breached, the confider should call the confidante at once. If it is still not put right the confider should consider legal action including possibly an interim injunction."
Trade secrets have a number of advantages over patents. The right to prevent unauthorized use or disclosure arises automatically. It costs nothing. There is no need for registration. Theoretically, it can last for ever and some trade secrets like the recipes for Chartreuse or Coca Cola have been kept secret for centuries in the case of the liqueur and well over 100 years in the case of the fizzy drink. On the other hand, if a competitor discovers the secret through his own R & D or even by reverse engineering there is nothing to stop him from using it. A patent, on the other hand, could stop such a competitor in his tracks if he makes or does something that is caught by one or more of the claims.
My next visit to the Enterprise Hub is scheduled for the end of April to join in the celebrations for World Intellectual Property Day. The theme this year is "Invest for a Green Future" which could not be more appropriate for the Menai Science Park. That has been the science park's theme from the day it opened on St David's Day 2018.
While taking a break from my one-to-one's, Pryderi ap Rhisiart, M-SParc's managing director presented me with an ambassador's badge. One of the reasons why M-SParc is so important is that it is helping to reverse a trend of relative economic decline and depopulation which has drained Northwest Wales of its best and brightest. The businesses that are establishing themselves at M-SParc and other locations in the Menai area are attracting them back as well as highly skilled individuals from the rest of the world. I sense a real buzz whenever I step into the science park's atrium. For that reason, I shall wear my M-SParc badge with pride.
Much of the credit for the success of yesterday's meeting is due to Emily Roberts who runs the Enterprise Hub. She advertises the meetings and sets up the PowerPoint and refreshments. I am very grateful to her for her work.
If anyone wants to discuss this article call me on 020 7404 5252 or send me a message through my contact form.
If you have acquired business or technical information that is either secret or not generally known the unauthorized use or disclosure of which would either harm you or benefit a competitor, you have what is known as a "trade secret".
For many years, the common law (that is to say, law made by judges and not by Parliament) has obliged those who receive trade secrets in confidence ("confidantes") to use such information only for the purpose for which it was imparted and not to make further use of it or disclosure it further. Such obligation is known as "the obligation of confidence" and the law that imposes it is known as "the law of confidence,"
Since 9 June 2018, the law of confidence has been supplemented by Directive 2016/943 ("the Trade Secrets Directive") which has harmonized trade secrecy law across the European Union. Art 2 (1) of that Directive defines a trade secret as:
"'......... information which meets all of the following requirements:
(a) it is secret in the sense that it is not, as a 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) it has commercial value because it is secret;
(c) it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret,"
Both the law of confidence and the Directive require those who own or control such information to keep it secret. Once it enters the public domain otherwise than through an unauthorized disclosure the obligation of confidence and the Directive cease to apply.
Although there are other circumstances in which an obligation of confidence can arise, the usual way is to require the confidante to sign a confidentiality or non-disclosure agreement ("NDA") before you give him or her the information. NDA can be stand-alone agreements or they can form part of some other agreement such as a contract of employment or a consultancy, distribution, franchise, joint venture, licence, technical transfer or other commercial agreement. Lawyers and patent and trade mark attorneys are often asked to draft general purpose agreements but that is very hard to do and sometimes dangerous as an agreement that is drawn too broadly may not be enforceable.
The best sort of confidentiality agreements specify the information to be disclosed very precisely. They will state whether the information is to be disclosed in writing, in which case the agreement will identify the document or data file, or orally, in which case it will state the date, time and place of the conversation, the persons present and so on. The confidante will acknowledge that the information is secret and that he or she will receive it in confidence. Should there be any possibility that the information may already be known to the confidante there should be a procedure for him or her to say so within a limited time and for some method of expert determination, arbitration or other ADR to resolve disputes. The reason for, and purpose of, the disclosure should be made clear. If the confidante can copy a file or document or consult another person his or her permission to do so and any conditions, such as obtaining further confidentiality undertakings, should appear in the agreement. The confidante must promise to make no further use or disclosure of the information and to hand back any documents, files or copies by a certain date and time. Finally, the confidante should agree to submit to the courts of Wales and agree that any disputes will be determined in accordance with Welsh and English law.
The agreement must be policed rigorously. If documents have to be returned by a certain day you should chase them as soon as the deadline arrives. If third parties are to receive the information in confidence you must make sure that they have signed confidentiality agreements. If you have any reason to fear that your agreement has been breached you should raise it with the confidante at once. If you are not satisfied with his or her explanation then you must consult solicitors. If the confidante still does not satisfy you then your solicitors must apply to the court for an order known as an "injunction" requiring the confidante to honour his or her promises with the threat of a fine or imprisonment if he or she disobeys.
All inventions start off life as trade secrets otherwise they will have ceased to be "new" by the time the inventor applies for a patent. There are, however, many technical advances that remain trade secrets forever. That may be because the law makes it difficult to patent them such as the source code for computer software which is specifically excluded from the definition of patentable invention as such or because the law of confidence provides better protection than patents for the asset in question. A good example would be beverages since recipes cannot easily be reverse engineered. The recipe for Chartreuse, for instance, has been kept secret for hundreds of years because it is known only to two monks at any one time. Many attempts have been made to replicate the liqueur but none has come close.
Should you wish to discuss this article or trade secrecy in general, call me on 020 7404 5252 during office hours or send me a message through my contact form.
