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Commercial secret in Ukraine and its protection

Along with the inexorable movement of our state towards the development of market relations, some negative processes escalate, for example increase in the number of business offences, theft of intellectual property, disclosure of confidential information, which causes irreparable harm to enterprises and their owners, depriving the latter of profits.
In the process of business development, creating innovative technologies and as a result of intellectual work, information objects arise that accumulate a wide variety of information and have commercial value. Such objects can be: technical solutions, promising methods of work, organizational, commercial, production or other information.

Most often, the term "commercial secret" means:

— information about planned or concluded transactions;
— information about contractors, financial plans for the company's development;
— profit level, pricing process and pricing policy;
— own know-how, which is not yet protected by copyright;
— inhouse analytical reviews of the market of goods and services, marketing research.

In order to determine how to effectively protect a commercial secret, it is necessary to determine its legal status as a social resource, securing the right to a commercial secret and the possibility of exercising legal guarantees of the realization of this right, as well as regulating relations that arise in the use of commercial secrets.

Achieving business success is often associated with the use of commercial secrets by the company and the inability to use this secret by competitors.

The main reasons why competitors want to take possession of trade secrets are:

— the desire to improve their operational and financial performance, enhance the competitiveness of their own products and production efficiency, select the optimal strategy for the sale of goods and business negotiation;
— harm to the owner of a commercial secret, reduction of the sale of its products, destruction of the business relations; reduction of its investment potential, dissemination of false information, discrediting the business reputation of the owner of a commercial secret.

For better or worse, the domestic judicial practice is not sufficiently developed within the context of mass resolution of disputes related to confidential information, and does not have a clear position regarding the following:

— what evidence in respect of a person guilty of disclosing a trade secret should be presented?
— what kind of agreements you should sign with employees and what kind of responsibility shall be provided therein?
— how to correctly determine the damage caused to the company due to unlawful disclosure of its confidential information?

There is an interesting and rather contradictory practice regarding the determination of losses incurred by the company as a result of disclosing confidential information in the amount of the profit obtained from using this information.

Case number 1355/12: "... as it has been established in the court session, the defendant PERSON_1 worked at the private enterprise "Scientific production company "Lad" from 2003 to 2009 and signed a document providing for the obligation not to disclose confidential information. It follows from the court examination of the defendant's employment record book that he didn't have any work experience before employment with private enterprise "Scientific production company "Lad" and got a job after graduation.

It has been established that the duties of the system engineer included designing and implementing hardware and intelligent computer programs, maintaining the information system, that is, the defendant had access to information on the technological conditions of applying vacuum coating of titanium nitride on stainless steel substrate.

At the request of the court, the State Statistics Department in the Cherkasy Region reported that one company, private enterprise "Scientific production company "Lad" was registered with establishment operation "vacuum coating with titanium nitride" in the region.

It has been established in the court hearing that "Pokrov" company, which the defendant registered and which began to carry out activities to apply a vacuum coating on metals, obtained a profit in the amount of UAH 26,620.

It is determined by the Ukrainian legislation that a method of protecting the rights to a commercial secret is filing a claim for damages caused by disclosing information that constitute a commercial secret. And according to the above requirements of the legislation, UAH 26,620 is the amount of damages that the plaintiff suffered as a result of disclosing by the defendant of information constituting a commercial secret of the plaintiff, and considers it necessary to restore the violated right of the latter by collecting these funds from the defendant in favor of the plaintiff".

Although we see that in the above case justice prevailed and the company was compensated for the damage from the misuse of confidential information, it is worth considering that this damage must be proved. Moreover, compensation for damage is not an absolute guarantee that a trade secret will not be disclosed in the future, and what king of consequences this will lead to.

When developing a system for protecting important information at an enterprise, you must first determine the object, subject and purpose of such protection.

The object of protection is the data accumulated in the course of the company's activities, to which its competitor is showing or may show interest.

The subject of protection is data carriers that contain important information: documents, products, items materials.

Of course, people are also carriers of such information. It is the protection of insiders that all efforts are focused on in order to protect the company's commercial information.

The main purpose of the information protection system is to establish a company's operating mode so as to limit the dissemination of information that contains commercial secrets, to make this information inaccessible to outsiders, to prevent data leakage and to create certain working conditions for employees who have legal access to classified information. Therefore, participation of lawyers who are specialists in business protection is necessary for this complicated process.

At the first stage of protecting commercial secrets, it is necessary to develop a clear plan of action to create an information security system in the company:

1) to identify the data categories that are the company's commercial secret;

2) to establish locations of accumulation of such information and its carriers/insiders, as well as identify potential channels of data leakage (everyone knows about the correct, preferably foreign, location of servers, but this is only the "top of the iceberg");

3) to work out a system of access to commercial secrets for individuals;

4) to provide for problematic aspects of protection of commercial secrets in the process of external contacts of employees of the enterprise;

5) to distribute the functions on the formation of a protection system between departments/structural units of the enterprise;

6) to allocate specialized departments for issues of protecting confidential information and to give each structural unit its own data protection tasks: IT department, legal department, HR department, etc.;

7) to calculate the approximate volume of costs of creating a system of protection of trade secrets;

8) to develop a procedure for monitoring and control over the operation of the entire system as a whole.

The problem of classifying business information and identifying the level of secrecy is one of the pivotal activities in all areas of information protection in the company.

Nathan Rothschild's famous words "who owns the information, he owns the world" are now relevant more than ever.

The company must work non-stop to protect confidential information, because the importance of this aspect is indisputable, and it allows the entrepreneur to keep his place and share in the market of goods, works and services, as well as to avoid unforeseen expenses.

Not only the success of a business, but also the security of the entrepreneur, as well as his financial resources depend on how well a commercial secret is protected. Therefore, successful businessmen undoubtedly need to carefully monitor their security and take a responsible approach to hiring someone who will provide it for them.

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© 2018, Denys Bondar
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