Guide To Trade Secrets In UK 2022: Trends And Developments

• Published date: 04 August 2022
• Subject Matter: Intellectual Property, Patent, Trade Secrets
• Law Firm: Gowling WLG
• Author: Mr Matt Hervey and Arnie Francis

Trends and Developments

Protecting Innovation

Across industries, there is an increasing appreciation of the critical importance of trade secrets in protecting innovation.

In April 2021, the UK Intellectual Property Office (IPO) published its report, The economic and innovation impacts of trade secrets, stating the "[g]lobal legal and economic trends suggest that growth in the use of trade secrets is outpacing that of patents". It also reported the following:

• trade secrets are a preferred strategy for innovative UK firms - some 70% of UK firms who develop product and process innovations use trade secrets to protect these innovations;
• the use of trade secret protection is higher among those entities that also use patents; and
• trade secrets are particularly important to UK firms in the R&D services, tech, and across manufacturing and non-manufacturing sectors, including in the services sector where trade secrets can be used to protect key service processes.

We can certainly confirm that trends and developments we have seen within our work for clients over the last 12 months support the above findings. For us, a key trend has been clients' increasing focus on trade secrets as an intellectual asset class for artificial intelligence (AI).

There has been a dramatic increase in advisory work to develop trade secret management policies, agreements, training, registers and procedures for practical implementation. This looks set to continue apace over the coming 12 months.

The Rise of AI

The use of AI, including machine learning (ML), is turbo-charging the need for active and effective trade secrets management. The situation is highly nuanced, but traditional IP rights, including patents and copyright, were not designed for data or the techniques and outputs of AI and especially ML. Trade secrets have emerged as the default de facto protection.

• Data, in the sense of information per se, are largely excluded from traditional IP rights.
• Patenting of AI/ML techniques may be prevented in the world's key jurisdictions (including the UK, Europe more generally, the USA and China) by prohibitions against certain types of subject matter, such as mathematical methods and computer programs as such.
• The outputs of AI/ML, such as artistic work, programs or inventions are largely excluded from copyright protection and patent protection. The UK is an outlier in providing for protection of computer-generated designs and copyright works, and even the latter may not be compatible...