Trade Secret Mode: Make the NDA Work

The most guarded trade secret in the world is the Coca-Cola formula in the USA. The company manages to store it for over 100 years. Is it possible to achieve such a result of protection of commercial secrets (CT) in Ukraine. How not to worry that an employee will transfer the customer base to competitors, disclose commercial information, or violate the signed NDA.



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The Icon Partners team recommends an effective solution to this problem - the introduction of a trade secret regime in the company.



# Case "Coca-Cola"



One of the failed attempts to steal the trade secret of "Coca-Cola" ended in a high-profile trial in 2006. Three employees kidnapped and offered a direct competitor Pepsi - to talk about the design and recipe for a new cola with vanilla flavor for $ 1.5 million. They received from 2 to 8 years in prison.



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On the same day, Coca-Cola's shares fell on the stock exchange - a vivid example of how much KT influences the company's reputation. The US protects trade secrets under the "Uniform Trade Secret" code.



# One NDA will not be full



In Ukraine, there are several ways to make the NDA work and even more so that it does not work. A common misconception is that it is enough for a company to sign a nondisclosure agreement with its employees and sleep peacefully without worrying about a possible information leak. Only one case has been recorded



in the court register when it was possible to protect confidential information (do not forget that any commercial secret is confidential information, but not any confidential information can be a commercial secret) using the NDA- decision of 20.05.2020 in case No. 757/17647/19-c. On his personal Facebook and LinkedIn pages, the defendant said that the clients own a company in Cyprus. In addition to being fired, he had to pay a $ 10,000 fine. However, the case is difficult to consider indicative - the defendant's lawyer did not appear, and no one appealed against the decision.



There are many more opposite situations.In 2019, the owner of โ€œBINARY STYDIO LLCโ€ filed a lawsuit with the Zaporizhzhya court to recover US $ 20,000 for disclosing a trade secret by a former employee. The plaintiff's claims were denied because he had incorrectly submitted electronic evidence and put pressure on an opponent. The defendant explained himself in English, which he does not speak well, and made mistakes by copying the text from the sheet of the owner of the company (for example, "Explonation of facts" instead of the correct "Explanation of facts").

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In order for the NDA to work, we recommend that you not only write down the conditions on "pieces of paper", but also resort to real measures. The Ukrainian case of Ergon-Electric LLC versus TVK Vector-VS LLC is illustrative. The plaintiff conducted an examination of the violation of the regulation, with the help of the cyber police, seized the media that proved the opponent's guilt. The Antimonopoly Committee fined the defendant UAH 365,000.



#MUST HAVE for Ukraine



To have evidence in court, you need to follow the following guidelines.

There is no law on commercial secrets in Ukraine; there are separate articles in the Civil and Commercial Code. But that doesn't mean entrepreneurs are vulnerable. List of local acts that are โ€œmust haveโ€ in national business:



  • โ€” / .
  • , . . , .
  • , , , .
  • -, , .
  • Non-disclosure Agreement (NDA) โ€” .
  • If the company wants to introduce a classification of secrecy, it is necessary to add the corresponding instruction for recording documentation .




# Clear desk policy and clear screen policy



The court takes into account not the existence of local acts, but the implementation in practice. Companies are guided by the international information security standard ISO / IEC 27001.

To preserve trade secrets and confidential information, we recommend using the "clear screen policy" and "clear table policy":



  • Employees are strictly prohibited from leaving documents unattended on the desktop.
  • , , . , . , NordPass - : qwerty; 12345; 123456789; .




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#:



How to prove possession and use of CT at a certain point if you've always kept it a secret? A common recommendation is to provide a cabinet with a key to restrict unauthorized access. In the 21st century, we recommend digital safes popular in Europe.



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WIPO PROOF is a notary service for the worldwide organization of intellectual property rights. The date and time imprint is created on a special digital file - a token. WIPO PROOF tokens are stored on servers in Switzerland with a high level of security. They appeared in May 2020 and are recognized in 100 countries. Another popular method is i-DEPOT , developed in the Benelux. The safe is not subject to any territorial restrictions. The cost is โ‚ฌ 37 for 5 years or โ‚ฌ 53 for 10 years.



#GOLDEN RULE



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Remember, there is nothing more valuable to a business than information assets. While you are thinking whether to safeguard information or not, other market players poach your staff, use information and make money from it. Today, under the strictest confidence, they contain: a list of New York Time bestselling books, a McDonald's big mac sauce, a Google search algorithm - the list is endless.

Multibillion-dollar corporations started with a small idea, but smart decisions: they built reliable protection and created conditions for the safety of their technologies and approaches.



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