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Diversified Industrials: Horizons

Digitalization. Complex supply chains. Growing regulation and compliance. Conglomerates and industrials operate in an increasingly dynamic environment – one which requires creative solutions and forward thinking.

Trade-secret protections are getting stronger – and other IP trends chemical companies need to know

By Celine Crowson and Clemens Plassmann

Trade secrets are fast becoming a crucial IP asset, and that’s good news for chemical companies – whose competitive advantage regularly comes not only from patented materials or products, but also erudite manufacturing processes, formulations, and business decisions.

In the U.S. and Europe, at least, the wind seems to be blowing this direction. Following the passage of the Defend Trade Secrets Act in 2016, trade secret protections have been included in the U.S.’s new deals with Mexico, Canada, and China. Meanwhile, in the EU a directive came into effect last year which provides clear cut rules for protecting such know-how.

Though these developments may make executives more comfortable, they’re no substitute for internal due diligence. Their organizations still need to identify key trade secrets and institute company-wide procedures to ensure they don’t get out. This entails carefully scrutinizing contractual agreements with everyone from joint venture partners and outside consultants, to developers and employees.

On the patent side, the famed Unified Patent Court may still come to life in Europe in the medium term – something all companies, including chemical manufacturers, should keep an eye on. And in Germany, it looks as if they’ll finally be joining the U.S. and others in softening automatic injunctions in patent cases, which would lead to more harmonization in patent litigation worldwide.

Looking ahead, as chemical companies begin to think more broadly about their IP assets, there should also be an increased focus on data protection – including data generated by automated or artificial intelligence systems. With no separate U.S. statute established for this purpose, organizations will again have to rely on smart contractual obligations in agreements with partners, developers, and suppliers.

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