[Author: María Fernanda Castellanos of Gamboa, García & Cardona]

For investors in innovation, it is a priority to count on legal mechanisms to secure some level of exclusivity in the exploitation of their innovations, to seek a return on their investment.

The first legal alternative at hand is to get a patent for the innovation. However, patents are not the only mechanism to obtain legal protection; other instruments may provide effective legal protection, as long as the innovator plans and implement measures and proceedings, from an early stage, to secure protection.

To encourage innovation, the legal framework allows the government to grant patents, namely the temporary privilege to exploit technological developments, which are deemed to contribute to the relevant area, as to justify an exception the free competition.

However, for an innovator to obtain a patent, he must be able to comply with the legal requirements, the first of them being that the innovation is in fact considered a patentable subject matter. Patentable subject matters are limited (not everything may be patented) and the regulations exclude a number of innovations from patentability, such as plants, animals, biological proceedings, therapeutic or surgical methods, or any innovation which is contrary to morality and public order.

Even if a certain innovation is deemed to be an “invention” or “new creation”, as per the definition set forth by applicable patent law (Decision 486 of 2000, issued by the Commission of the Cartagena Agreement) and thus, it may be deemed to be patentable subject matter, then the innovation must comply with the novelty, inventive step and industrial application requirements. They are described by Decision 486, however, it is the accepted doctrine and practice from the patent office (in Colombia the Superintendency of Industry and Trade) which determines the scope of application; in other words, patentability is subject to the criteria applied by examiners. For these reasons, the administrative proceeding to obtain a patent may result complex, time-consuming, and uncertain as to the result.

Additionally, when a technological development is submitted to a proceeding to obtain a patent, the information included in the administrative file becomes public, which may reduce the value of the innovation, if the patent is not obtained.

On the other side, the legal framework provides other instruments which grant protection to innovations, at the same time that they secure a certain level of exclusivity, value generation, and therefore, a return on the investments for the R&D required for the innovation to be produced.

Among these “not formal” tools to protect innovation, knowledge, and information, we refer to the protection as trade secrets, and the protection arising from the contractual recognition of the implicit value that may be found in certain intangibles.

It is a fact that they do not provide anything like a formal ownership/right title, it is also a fact that they are set forth by the law, and therefore they may be judicially enforced by alternative ways of action.

Protection of trade secrets is governed by Decision 486 of 2000, and the legal actions to enforce the rights arising therefrom, are contemplated in the Unfair Competition Law (Law 255 of 2996) as well as the Criminal Code, among others. The protection of contractual provisions whereby the implicit value of certain innovation is acknowledged by the parties is guaranteed by the regulations that set forth the mandatory compliance of agreements among the parties and sanction the lack of compliance with contractual obligations.

Protection as trade secrets requires, firstly, that the object of protection be determined, provided that said object of protection must have industrial or commercial usefulness. It is a common mistake to think that the whole scope of a company’s activity, or that all of the information used, held or produced by a Company in the course of business is protected as a trade secret. However, protection under trade secret regulation does not apply to a whole universality of undetermined information. The object of protection under trade secret regulations must be individualized, and determined, such as, for example, the formulas to make a product, or the internal proceeding to accomplish a given functionality. For this reason, when posing a claim or commencing a legal action based on the misuse or appropriation of a trade secret, the right owner must express and individualize the specific object that conforms to the protected information.

Also, to obtain legal protection, the innovator must have implemented from the beginning of the R&D activities, as an ordinary and generalized practice in the Company, a set of measures for the diligent handling and storage of information protected under trade secret regulations. We refer to the adoption by the innovator, before the moment of claiming for protection, of internal proceedings, protocols for accessing and handling information, manuals, minutes, confidentiality clauses, information handling provisions in labor agreements and agreements with third parties, establishing levels of privileges to access and handle information, adoption of technological measures to control access and traceability of information, among others.

All of the measures that are adopted to protect an innovation under the trade secret regime must be duly documented so that, in the event of litigation, the right owner may be able to provide evidence of the effective measures adopted to ensure the confidentiality of information, which is valued precisely for being kept secret.

Last, we refer to contractual stipulations as a source of protection for innovations, proceedings, or knowledge. We do not refer to the effects of confidentiality agreements, but to the declarations, representations, and express acknowledgments made by the parties to an agreement, to the effect that certain processes, knowledge, or information are valuable, and that they have originated as a result of the activity of one the parties (the innovator), who have invested resources, both financial and technical to arrive to a result which is valuable and replicable.

When the parties expressly recognize and declare said recognition in a contract, the effect is that, as a result of the pacta sunt servanda principle, which provides that “agreements must be kept”, a defined innovation, a proceeding, a business method or particular know-how would be under contractual protection, even if they are not patentable, or if they do not meet the requirements for protection under trade secret regulations.

In summary, at Gamboa, Garcia & Cardona we can assist you in structuring a legal strategy to protect your innovations and related intangibles assets through a variety of structures that may provide some level of exclusivity, securing the value of the innovation resulting in the due return of the investment made by the innovator.