MALTA Law and Practice Contributed by: Deo Falzon, Fenech & Fenech Advocates
right applicable to them or any contractual undertak- ings entered into. 6.4 Protection Through Contract and Confidentiality Contractual mechanisms such as NDAs, employment confidentiality clauses and non-solicitation and non- compete clauses are typically used to establish buff- ers and protections around “know-how”. 6.5 Licensing and Assignment Know-how may be licensed or assigned, but this gen- erally entails complex contractual arrangements. In assignment scenarios, particular care must be taken to ensure that the assigning party is contractually prevented from further use or disclosure of the trans- ferred know-how. This is entirely separate from both patents and statutory trade secrets, as it is treated as a transfer- able intangible commercial asset protected primarily through contract rather than registration. There are no statutory formalities for know–how assignments or licences, but in practice, a clear written agreement is critical to identify the know–how, define scope (assign- ment vs licence), impose confidentiality and non–use obligations and preserve enforceability, particularly post–termination or where the know–how does not (or no longer) qualify as a trade secret. 6.6 Reverse Engineering Reverse engineering is not statutorily prohibited; how- ever, there are frequent contractual provisions that curb this practice. The Trade Secrets Directive itself provides in its recitals that “reverse engineering of a lawfully acquired product should be considered as a lawful means of acquiring information, except when otherwise contractually agreed.” 7. Data, AI and Emerging IP Issues 7.1 Data Rights and Database Protection There is both copyright and a distinct sui generis data- base right. Databases may be protected by copyright where, by reason of the selection or arrangement of their contents, they constitute the author’s own intel- lectual creation, but copyright does not extend to the
underlying data as such. Independent of copyright, a sui generis right arises in favour of the maker of a database who has made a qualitatively or quanti - tatively substantial investment in obtaining, verifying or presenting its contents, giving the right to prevent extraction or re-utilisation of the whole or of a sub- stantial part of the database for fifteen years, sub- ject to renewal where a substantial new investment is made. 7.2 AI-Generated Works and Inventorship/ Authorship This subject is undergoing constant flux; however, a matter is yet to reach the local courts. It seems clear that copyright protection is afforded only to human authors; however, a distinction should be made between purely AI-generated outputs and human output augmented with AI-based tools. That would become a qualitative matter which would need to be assessed on a case-by-case basis. 7.3 Training Data, Model Development and Infringement Risk Text and data mining exceptions are available under statute; however, real-world scenarios in Malta are extremely rare. Theoretically, all enforcement meas- ures available under the Enforcement Directive have been transposed and are available in Malta. 7.4 Enforcement Against AI-Enabled Infringement These matters haven’t arisen in Malta yet; however, mechanisms are available to address such conduct. Platforms and tool providers could be exposed to court orders as intermediaries or secondary liability if they are made aware of illegal content. 8. Intersections and Overlaps 8.1 Choice of Protection and Strategic Considerations The most common trade-off between patent and trade secret protection is generally the product’s commer- cial applicability or commercial interest, ie, whether more income is expected to be generated from exclu- sivity or royalties. Moreover, theoretically, if a patent- able subject is difficult to reverse-engineer, suitable
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