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Jun 1, 2022

Business secrets: Blockchain as a protection alternative

Currently, it is quite common to hear or read articles, news or comments related to Blockchain , the metaverse, various technological tools and, in general, it is becoming more and more common to hear or read about the fact - and, in my opinion, a reality - that the future is in that parallel world called cyberspace. It will happen to many that they have no idea what all this is about; Therefore, in this article I will try to use the simplest terms, in order to make the technological terms less complex. The purpose is not to generate that natural rejection of the unknown, but, on the contrary, to begin to look at technology in a different way and consider it as an ally to our legal practice and discover that with it we can offer our clients the possibility of have additional tools that allow them to provide greater protection to their intangible assets with greater value, such as business secrets.

In this regard, I will begin by briefly and simply commenting on the main characteristics of the Blockchain , without going into the details of its technological composition, but rather focusing on what can be achieved with its application and use; since, regardless of the composition of things, I consider that, finally, what the majority asks after an explanation about a (technological) product or service is “and what is that for?”

Along these lines, Blockchain is a blockchain technological tool that, in my opinion, has three (3) fundamental characteristics: 1) It allows you to identify the exact registration date of what is intended to be protected through said tool; 2) It allows you to know everything that happens with what is being protected, for example, with whom was the protected thing shared? If that third party, in turn, shared the information with another person? Who or who are using what is protected? What use is it being given? and so on, which in turn allows you to always have control over what you are protecting; and, 3) Due to its technological composition, it has a high inviolability scheme, that is, it will be extremely difficult for someone to access what is protected by the Blockchain , if they do not have the corresponding authorization.

Due to its characteristics, there is no doubt that the Blockchain technological tool can be a solution to efficiently protect any asset of a company, above all, it becomes more important as an alternative solution for those cases of assets that do not have an alternative to be protected by some registration with a government institution. In this type of case, there are business secrets , whose interrelationship with the Blockchain I will address below.

In Peru, the protection of business secrets is regulated by Andean Decision 486, Common Regime on Industrial Property , as well as by Legislative Decree No. 1044, Law for the Repression of Unfair Competition . In this last Peruvian regulation, acts of violation of business secrets are classified as an infraction, but the definition thereof is not established; Therefore, to understand its concept it is necessary to refer to what is established in literal c) of article 2.1. of the Confidentiality Directive (Directive No. 001-2008/TRI-INDECOPI, On Confidentiality of Information in the Procedures Followed by the Functional Bodies of INDECOPI), according to which, a business secret is “any undisclosed information that a company natural or legal legitimately possesses, that can be used in any productive, industrial or commercial activity, and that can be transmitted to a third party, to the extent that said information is: c.1 Secret, in the sense that as a whole or in the configuration and precise assembly of its components, is not generally known or easily accessible by those in the circles that normally handle the respective information; c.2 has commercial value because it is secret; and, c.3 has been the subject of reasonable measures taken by its legitimate possessor to keep it secret.”

Now, having knowledge of what a business secret means and the rule that regulates the sanctioning procedure in Peru against an act of violation, it is pertinent to take into consideration the criteria used by the authority to analyse cases of infringement of this type.

In this regard, in accordance with the provisions of Legislative Decree No. 1044 and the analysis carried out by INDECOPI (the authority that sanctions acts of unfair competition in the form of acts of violation of business secrecy), the elements that make up the existence of an act of violation of a business secret are the following: (i) The existence of a commercial or industrial secret; and, (ii) the disclosure or exploitation of said secret carried out by whoever had access to this information with a duty of confidentiality or obtained it illegitimately; as well as the acquisition of other people's business secrets through espionage, induction into compliance with the duty of secrecy or similar procedures.

Additionally, it is important to know the percentage of cases of acts of violation of business secrets that reach INDECOPI and end up being sanctioned, since this will allow us to have an idea about the protection that in practice is granted to this type of assets in cases of violation thereof. In this regard, from the review of the cases on the matter resolved by the Specialized Chamber in Defense of Competition in INDECOPI (second administrative instance) and published on the official website of the aforementioned institution, in the last five years, of sixteen cases only two were declared founded. In the cases declared unfounded, the basis was, for the most part, the lack of accreditation by the complainants either to identify the information that would be confidential, the application of correct security measures or to verify that the accused had access to the information. object of protection. From my point of view, having to prove the aforementioned aspects concurrently is extremely complicated for the complainant and the cases end up being declared unfounded, not because there was no real impact, but because the level of proof required is high and Unfortunately, the complainant does not have a tool that can facilitate this work.

So, if we are faced with a context in which business secrets – which cover the most important assets of a business – cannot be protected by registration with a government authority and it is complex to obtain the imposition of a sanction on those who violate said business secrets, it is logical to think about how we can provide greater protection to said intangible assets, in addition to the protection that is currently provided through the documents (contracts) that can be signed with the people who have access to said information. of the business.

Along these same lines, it would be ideal to have a technological tool through which we can safeguard the most relevant information of the business, which allows us to have an unquestionable record of the date on which the protection of the information began, which allows us to have control of it by having a record of the people with whom it has been shared, who is using it, to whom they are sharing it, etc.; and that it is secure enough to prevent unauthorized third parties from accessing the information. The characteristics mentioned above are those of the technological tool called Blockchain, whose main characteristics I mentioned at the beginning; Therefore, in my opinion, of course, the aforementioned tool will be of great help in protecting the most relevant information of any business.

They say that technology is faster than the law and I totally agree with that; Therefore, as lawyers we would be wrong to compete against it, since it would be a losing battle, so there is no doubt that the best thing would be to consider technology as an ally and in this particular case of the Blockchain tool, start disseminating and use it to protect different intangible assets, especially for those cases that are currently protected, in practice, only due to the possibility of litigation, such as musical works, works of art, personal data, among others.

Unlike Peru, in other countries the use of Blockchain for different industries is a reality that is becoming more common. Of course, in our country there are already people who are talking about the subject, but due to the benefits that this type of technology offers, I believe that its knowledge should be expanded exponentially in our country, and that the people who have a business here know that there is a tool that will allow you to protect the most valuable intangible assets that your companies have, such as business secrets or also known as industrial secrets. The purpose of this article has been that: that we begin to talk more about this topic in our country and, from the practice that I develop, that we begin to disseminate its application for better protection of Intellectual Property, as would be the case of secrets. business, which is an asset that, without a doubt, all companies would invest in protecting as much as possible.

*Article written and published for the Legal Sector Bulletin of the Services Guild of the Lima Chamber of Commerce

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