Last week, we started by introducing trade secrets law as an increasingly growing branch of intellectual property law. Apart from its definitions as provided under relevant laws, we also identified the crucial connection between trade secrets protection law for companies and businesses and the growth of the economy, mainly from a Nigerian perspective. And you would recall that we didn’t fail to mention that in Nigeria, there is need to evolve a stronger policy and legal framework for an effective trade secrets protection towards providing improved support for the growth of trade and commerce in the country. You may read it up here.
Today, we will be discussing some of the principles guiding the legal protection of trade secrets, the possible remedies for infringements, and lastly, the way forward for Nigeria.
To start with, having considered what trade secret means, how can it be protected under the law? Firstly, the protection provided a company over its trade secret applies to certain categories of persons, and in particular circumstances:
1. Persons Who Gained Access through Improper Means: a trade secret will be protected from being used by persons who gained access to it through improper means.
2. Persons Who Had Knowledge of the Improper Means: a trade secret information will also be protected against persons who know that the information was obtained through improper means
3. Persons Who Should Have Had Knowledge of the Improper Means: trade secret information will be protected from being used by persons who the law says should have known that the information was obtained through improper means
4. Persons in Breach of a Confidential Agreement: persons who are in breach of a promise to keep the relevant information confidential are also prohibited from using the trade secret information.
By “improper means” as used above, the Uniform Trade Secrets Act defines it to include “theft, bribery, misrepresentation, breach or inducement of a breach of duty to maintain secrecy, or espionage through electronic or other means.”
Perhaps, to abundantly appreciate the point being made above, a close examination of what amounts to “misappropriation” under the Uniform Trade Secret Act, earlier referred to in this work would be useful. In the provisions of that Act, “misappropriation” of trade secret is seen as:
(i) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or
(ii) disclosure or use of a trade secret of another without express or implied consent by a person who
(a) used improper means to acquire knowledge of the trade secret; or
(b) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was
(i) derived from or through a person who has utilized improper means to acquire it;
(ii) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or
(iii) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or
(c) before a material change of his position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.
I believe the words of the Act are sufficiently clear. Moreover, as it has been implied, one essential element of a trade secret is that it must not be publicly known. Of course, this is unlike trademarks, the distinction of which must be notorious to enable it enjoy the protection of law. Therefore, in trade secrets law, protection is lost upon the secret becoming public knowledge.[1]
What about remedies for infringement of a trade secret?

Briefly, they include damages, profits, reasonable royalties, and an injunction. As it obtains in the Uniform Trade Secrets Act, damages can include both the actual loss and the unjust enrichment caused by misappropriation. Damages caused by misappropriation may also be determined by imposition of liability for a reasonable royalty for a misappropriator’s unauthorised disclosure or use of a trade secret. Where however the misappropriation is a wilful and malicious one, the court may award exemplary damages.

With respect to injunctive relief, actual or threatened misappropriation may apply.  The injunction shall only be terminated when the trade secret has ceased to exist. Or in order to eliminate commercial advantage that otherwise would be derived from the misappropriation, the injunction may be continued for an additional reasonable period of time. In exceptional circumstances, an injunction may provide the condition for future use upon payment of a reasonable royalty for no longer than the period of time for which use could have been prohibited. However, such exceptional circumstances include, but are not limited to, a material and prejudicial change of position prior to acquiring knowledge or reason to know of misappropriation that renders a prohibitive injunction inequitable. Lastly, in appropriate circumstances, affirmative acts to protect a trade secret may be compelled by court order.
To properly conclude this discourse, certain important points must be made here. Nigeria, currently rated one of the fastest growing economies in the world, cannot afford to be less proactive.
There have been reports that the country has the potential to be the fastest growing economy and rank 13th among the world’s top 20 economies from now to 2050.[2] Also, Nigeria has been rated by the United Nations Conference on Trade and Development (UNCTAD) as the biggest beneficiary of Foreign Direct Investment (DFI) in Africa with over $7billion worth of foreign investments inflow in 2012.[3]
However, Doing Business 2013 data for Nigeria rates the country 119 out 185 economies in terms of the “Ease of Doing Business” in Nigeria.[4] The implication of this is that the Nigerian government needs to take genuine steps towards developing a sound policy and strong legal framework that will provide the needed support for the growth of local industries. This is where the importance of the promotion of trade and commerce arise. And to support this, the trade-related aspects of intellectual property such as Trade secrets law will prove to be very instrumental.
Also, with the current policy of the Federal government on promotion of local content in the major sectors of the Nigerian economy, we need to provide laws that help to protect the economic interests of indigenous companies and businesses and the commercial value, actual or potential, of their products and services, towards the growth and development of the Nigerian economy. Otherwise, with the largely unabated brain drain, many of our best minds would continue to end up in foreign corporations and companies, with the attendant risks that such one-sided affair will continue to have on our local economy and move towards self-reliance.
It is high time the National Assembly passed a uniform Trade Secrets Act as obtainable in the United States jurisdiction. The Houses of Assembly in the states can then adopt same, with necessary modifications. In this way, Nigerian brands such as glo, Milo, Star, Maltina, Omo including many others can enjoy a more robust trade secrets protection regime towards ensuring their profitability for the growth of the Nigerian economy.

[1] Trade secrets may not be the best way to protect a company’s intellectual property, if other forms such as copyright or patent would provide a more adequate protection in a particular circumstance.
[2] World in 2050 Report, published by Price waterhouseCoopers, PwC’s macroeconomics team on August 8, 2013
[3] (UNCTAD Rates Nigerian Economy High on DFI published at on August 6, 2012.
[4] Ease of Doing Business in Nigeria published at on August 6, 2013.

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Nigerian Law Today

NLT’s mission is to take legal-content writing to the next level in Nigeria by leveraging legal expertise and technology. We publish fresh, original, and insightful articles on areas of law we cover.

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