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Covid-19 should spark a reexamination of the use of trade secrets – STAT

Jul 10, 2020 | Uncategorized | 0 comments

As the world struggles to confront the Covid-19 pandemic, how to handle access to trade secrets — information that is valuable because others do not know it — is one of the myriad challenges to achieving safe and effective vaccines, diagnostics, and treatments for the people of the world.

The most famous trade secret is the Coca-Cola formula. If someone accessed that formula who wasn’t supposed to, a misappropriation lawsuit from Coca-Cola would soon follow. While a scenario like that may seem foreign to the Covid-19 pandemic, trade secrecy spans a shockingly broad range of critical and lifesaving information.

This poses a problem because if information is accessible to more than just the trade secret’s owner, it could lead to greater and more rapid advances against Covid-19, while helping to assure that medical services and vaccines would be affordable for all. But treated as a valuable commodities held by various property owners, Covid-19 trade secrets could be used without regard to public health or the best interests of the world’s people.

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Often labeled as confidential information or proprietary information, trade secrets encompass vast quantities of information needed to discover, test, create, and manufacture diagnostics, treatments, and vaccines. They are everywhere in the battle to defeat Covid-19, from clinical data to pharmaceutical manufacturing processes.

Potential trade secrets include manufacturing processes, test data, medical formulas, and more. For vaccines and other biologic medicines, cell lines, genomic information, and other biological material can also be held as trade secrets. Data about the effectiveness of medicines and vaccines are trade secrets. Even so-called negative information — information about what does not work — can be a trade secret.

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All of this information is essential to the rapid development of, and access to, safe and effective Covid-19 diagnostics, treatments, and vaccines worldwide.

The nature of trade secrecy in a competitive marketplace is obvious: If Coca-Cola’s formula was accessed by a competitor who could use that information, Coca-Cola would have a competitor that could drive down its price and the company’s profits. So the instinct in the commercial marketplace is for a trade secret owner to hold valuable information as trade secrets, except where patenting is preferred.

While that is normally an uncontroversial decision, when it comes to public health, the problems with such practices are many. Trade secret law has governed (and thereby denied) public access to information about many issues of national importance, like hydraulic fracturing (“fracking”) safety, voting machine operation, and the composition of our food supply, like the “pink slime” in beef products. There is currently a debate about whether the names of businesses that have received federal Covid-19 relief loans are trade secrets.

In the case of Covid-19 research, product development, and commercialization, data and manufacturing processes are key, and can be designated as trade secrets. After all, if a company knows what works and what does not, then it has a competitive advantage over others lacking that knowledge. When it possesses efficient means of production and can embargo access to essential biological resources, it has a significant competitive advantage.

Does all of this mean we should get rid of trade secrets so civil society groups and competitors can have access? Not so fast. Trade secrecy is unquestionably necessary as an incentive to innovation. Companies need to have assurance that if they invest time, money, and labor into an innovation they will be able to not only recoup costs but also have the opportunity to turn a profit. If they are prevented from keeping valuable information secret, then they may not innovate because competitors would simply use the valuable information they have developed.

There are two hard questions about trade secrets: When should a trade secret be shared more broadly? And under what circumstances?

Unfortunately, trade secret law has little to say about these issues. While independent discovery and reverse engineering end trade secret protection, and there are limited circumstantial trade secrets exceptions for whistleblowers, journalists, and criminal defendants, trade secret law generally operates to empower the owners of trade secrets to control if, when, and how their secrets are shared. As a result, unless a trade secret owner licenses the information, the secret remains locked up by the owner, perhaps forever.

Clearly, there should be times when trade secrecy’s ability to lock down information gives way to broader national and international information sharing concerns. If there were ever a case for reexamining trade secrecy’s unquestioned dominance, a public health crisis on the scale of Covid-19 would be the time.

If there is a legal reassessment, the health care community must be part of it because it falls to medical experts to explain what information is needed, by whom, and when.

To assess the hows and whens of trade secret access during the Covid-19 pandemic, we need a granular understanding of how a particular trade secret is used in a given company and industry. For example, if a pharmaceutical company discovers that a particular vaccine development process is a dead end, it might speed things up if other developers had access to that knowledge. On the other hand, to encourage medical advancement and public health, there may be information that should be protected by trade secrecy, at least for a period of time, like a revolutionary diagnostic tool with unusually costly research and development requirements. We will have no way of balancing competing interests, understanding the public health effects, and gauging the most compelling needs without the expertise provided by scientists, clinicians, and other medical professionals.

Trade secrecy operates as a complicated and poorly understood impediment to public health advances, even as individual entities may benefit from their power. Because there is no all-encompassing solution for this vexing challenge, awareness of the problem is the first step to addressing it. What seems initially like a narrow issue involving intellectual property law and innovation may actually be a critical barrier to our ability to rapidly, effectively, affordably, and safely solve the Covid-19 pandemic.

The time is now to examine, and reexamine, trade secrecy’s hold on information and our collective health.

David S. Levine is an associate professor of law at Elon University School of Law and affiliate scholar at the Center for Internet and Society at Stanford Law School. The author thanks Brook Baker for comments on a prior draft.