Concept of Commercial Secrets and Protection Methods of Its Legal Protection in the Current Legislation of the Republic of Kazakhstan

This article addresses topical issues emerging in view of commercial secret protection in connection with absence of forms and methods of commercial information protection in the current legislation of the Republic of Kazakhstan.

One of the conditions for entry of the country to the World Trade Organization (WTO) is requirement to bring national legislation in compliance with provisions of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). This Agreement, in particular, specifies requirement to establish effective mechanisms of protection of secret and commercially significant information holders’ rights.

At present, problems of commercial secret attain specific actuality in consequence of its consideration not as object of civil rights, but more like method of protection of undisclosed commercial information, form of intellectual property protection. We should note one peculiarity emerging in view of intellectual property objects’ protection. It is non-application of category of proprietary suits and selection of distinctive feature – impossibility of such objects’ vindication, where protection is given to possibility to carry out intentions containing in information.

It follows from Article 961 of the Civil Code of the Republic of Kazakhstan (hereinafter – CC of RK) that object of intellectual property right is «undisclosed information including trade secrets (know-how)”. Of course, final conclusion about equivalence of mentioned terms “confidential information” and “commercial secret” is disputable, but obviously there is close relationship between specified notions. It is also confirmed by content of Article 1017 of CC of RK, according to which “undisclosed information – technical, organizational or commercial information including trade secrets (know-how) unknown to third persons”. Reference to Article 126 of CC of RK confirms that commercial information can be attributed to objects of intellectual property. Part 55, which contains Article 1017 is a part of Section V “Intellectual Property Right” of CC of RK.

It should be noted that term “information” is very difficult from the point of view of clear differentiation of its application limits. An important factor in this case is exclusive right of holder, its absolute right for immaterial goods. It performs the same function in this case as right of property for tangible objects. Therefore, we can acknowledge existence of two kinds of initial rights corresponding to these objects – right of property and exclusive rights.

Confidential information requires protection typical for absolute rights. Otherwise it is possible to protect it only from parties liable, but they can not be always violators of commercial secret regime. Effective CC of RK establishes provision that “person having technical, organizational or commercial information including trade secrets (know-how) unknown to third persons (undisclosed information) has a right for protection of this information from illegal use subject to compliance with terms established by item 1, Article 126 of the present Code”. In this case the question is commercial value because information is unknown to third parties.

Creation of right for protection of undisclosed information is specified by law in item 2, Article 1017 of CC of RK, where it is specified that “right for protection of undisclosed information from illegal infringement emerges with regard to this information irrespectively from any formalities (it registration, obtaining of certificates, etc.)”. It follows from this that for protection of undisclosed information special act of registration and issue of special protection document is not required. Fact of its existence is enough in this case. Right for attribution of information to the category of commercial secret, determination of list and content of such information belongs to its holder. It takes measures for protection of its confidentiality (regime of commercial secret). Regime of commercial secret means legal, organizational, technical and other measures for protection of information confidentiality taken by information holder.

It should be noted that Kazakhstan legislation is not sufficiently developed in the sphere of commercial secret protection. Article 1018 of CC of RK stipulates liability for illegal use of undisclosed information that allows holder to require compensation of losses inflicted by illegal use and immediate termination of its use. But it is always not easy to substantiate and prove size of lost profit. While actual loss (that is costs that are incurred or should be incurred by entrepreneur or loss/damage of its property) is not an associate of such violation of law.

To our point of view this institution requires more precise regulatory establishment, namely:

First of all, it is necessary to determine clear attribution of this notion. Distinction of such object as information from goods because of its immateriality is objective, vindication is not applicable in this case in principle. Confidential information is always thematically determined, but it can not be said about such object as information on the whole. Difference with intellectual property is that information is not always of creative nature. Availability of separately formulated notion of commercial secret “not integrated” into mechanism of protection of undisclosed information in CC of RK also does not promote their integration. In this sense legislator should make it legally clear, that is to specify information in Article 15 of CC of RK as a separate object.

Secondly, to make changes to Article 126 of CC of RK, because provisions containing in it do not ensure adequacy of measures on protection of information confidentiality, its value. To add after item 1 of this Article one more item of the following redaction: “measures on protection of information confidentiality taken by its holder should correspond to value of protected information and contain definition of list of information representing commercial secret; access restriction to information by means of establishment of procedure of use of this information and control over compliance with such procedure; registration of persons having access to information, and (or) persons, to whom such information is given or transferred».

Notion of commercial secret is attributed to the least developed notions. There is great demand for improvement of legislative instruments stimulating its development. At that, it should be taken into account that the question is amending and clarification of current legislative provisions, to study and analysis of which the present article is addressed.