Trade Secrets 2025

Definitive global law guides offering comparative analysis from top-ranked lawyers

CHAMBERS GLOBAL PRACTICE GUIDES

Trade Secrets 2025

Definitive global law guides offering comparative analysis from top-ranked lawyers

Contributing Editors Claudia Ray and Joseph A. Loy Kirkland & Ellis LLP

Global Practice Guides

Trade Secrets Contributing Editors Claudia Ray and Joseph A. Loy Kirkland & Ellis LLP

2025

Chambers Global Practice Guides For more than 20 years, Chambers Global Guides have ranked lawyers and law firms across the world. Chambers now offer clients a new series of Global Practice Guides, which contain practical guidance on doing legal business in key jurisdictions. We use our knowledge of the world’s best lawyers to select leading law firms in each jurisdiction to write the ‘Law & Practice’ sections. In addition, the ‘Trends & Developments’ sections analyse trends and developments in local legal markets. Disclaimer: The information in this guide is provided for general reference only, not as specific legal advice. Views expressed by the authors are not necessarily the views of the law firms in which they practise. For specific legal advice, a lawyer should be consulted. Content Management Director Claire Oxborrow Content Manager Jonathan Mendelowitz Senior Content Reviewer Sally McGonigal, Ethne Withers, Deborah Sinclair and Stephen Dinkeldein Content Reviewers Vivienne Button, Lawrence Garrett, Sean Marshall, Marianne Page, Heather Palomino and Adrian Ciechacki Content Coordination Manager Nancy Laidler Senior Content Coordinators Carla Cagnina and Delicia Tasinda Content Coordinator Hannah Leinmüller Head of Production Jasper John Production Coordinator Genevieve Sibayan

Published by Chambers and Partners 165 Fleet Street London EC4A 2AE Tel +44 20 7606 8844 Fax +44 20 7831 5662 Web www.chambers.com

Contents

INTRODUCTION Contributed by Simon Bushell, Gareth Keillor and Maitreyee Dixit, Seladore Legal p.4

JAPAN Law and Practice p.156 Contributed by Anderson Mori & Tomotsune Trends and Developments p.172 Contributed by TMI Associates

AUSTRALIA Law and Practice p.9 Contributed by Gilbert + Tobin Trends and Developments p.31 Contributed by Gilbert + Tobin

MEXICO Law and Practice p.180

Contributed by BC&B Law & Business Trends and Developments p.198 Contributed by BC&B Law & Business SOUTH KOREA Law and Practice p.204 Contributed by Yoon & Yang LLC

CHINA Law and Practice p.39 Contributed by CCPIT Patent and Trademark Law Office

Trends and Developments p.58 Contributed by AllBright Law Offices CHINA – BEIJING Trends and Developments p.64 Contributed by Jingtian & Gongcheng

UK Law and Practice p.225 Contributed by Kirkland & Ellis International LLP

USA Law and Practice p.247 Contributed by Kirkland & Ellis LLP USA Trends and Developments p.271 Contributed by Seyfarth Shaw LLP

GERMANY Law and Practice p.73 Contributed by SZA Schilling, Zutt & Anschütz Trends and Developments p.95 Contributed by SZA Schilling, Zutt & Anschütz

INDIA Law and Practice p.104 Contributed by Anand and Anand ITALY Law and Practice p.129 Contributed by EY Tax & Law Trends and Developments p.152 Contributed by EY Tax & Law

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INTRODUCTION

Contributed by: Simon Bushell, Gareth Keillor and Maitreyee Dixit, Seladore Legal

Kirkland & Ellis LLP is an international law firm with approximately 3,500 attorneys across the USA, Europe and Asia. Kirkland’s trade secrets litigation practice includes approximately 75 at - torneys with years of experience representing both plaintiffs and defendants in trade secrets matters in diverse industries. They draw upon the depth of Kirkland’s intellectual property, commercial litigation and other practices to provide an approach tailored to each individu - al case. Kirkland’s trade secrets attorneys have litigated a broad spectrum of trade secret dis -

putes, ranging from outright theft to violation of various agreements including employment, R&D, joint development, and technology trans - fer and know-how agreements. They have won significant victories for clients in these matters in UK courts, US federal and state courts, and arbitrations, and have worked collaboratively with law enforcement agencies to protect cli - ents’ IP. The practice’s success is grounded in extensive jury and bench trial experience, and a sophisticated appellate practice to protect cli - ents’ successes at the trial level.

Contributing Editors

Claudia Ray i s a partner in Kirkland’s intellectual property practice group. She represents clients in litigation, arbitration and administrative proceedings involving trade secret, copyright,

Jopseph Loy is a partner in Kirkland’s intellectual property practice group. His practice focuses on trade secret and patent infringement disputes before federal trial and appellate

trade mark, internet and contract/licensing issues across a wide range of industries. Her trade secret practice includes litigation and counselling relating to software, technology, financial services and consumer products. Claudia also serves on the Intellectual Property and Technology Advisory Committee of the American Arbitration Association and the Bulletins Committee of the International Trademark Association, and is the chair of the Copyright Law Committee of the Association of the Bar of the City of New York.

courts nationwide. His trade secret work includes both offensive and defensive litigation and corporate counselling. Joe has represented clients in cases involving a wide range of industries, including autonomous vehicles, biotechnology, computer hardware and software, cruise ships, digital photography, exercise equipment, mattresses, medical devices, oil drilling, petrochemicals, pharmaceuticals, robotics, smartphones and wireless communications. He is a frequent commentator on trade secret issues before intellectual property Bar associations and law school communities.

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INTRODUCTION Contributed by: Simon Bushell, Gareth Keillor and Maitreyee Dixit, Seladore Legal

Co-Authors

Brandon R. Weber is an associate in Kirkland’s

Andrew (Keum Yong) Lee is an associate in Kirkland’s intellectual property practice group whose practice focuses on patent litigation.

intellectual property practice group. His practice focuses on patent infringement litigation in federal courts and before the US International Trade Commission.

Kirkland & Ellis LLP 601 Lexington Avenue

New York NY 10022 USA

Tel: +1 212 446 4800 Fax: +1 212 446 4900 Email: claudia.ray@kirkland.com Web: www.kirkland.com

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INTRODUCTION Contributed by: Simon Bushell, Gareth Keillor and Maitreyee Dixit, Seladore Legal

Global Overview As businesses around the world evaluate their options for protecting valuable intellectual prop - erty in the context of today’s dynamic techno - logical environment and highly mobile labour force, trade secret protection can be an essential complement to patent, copyright and trade mark protections. This is particularly true in the USA in light of recent developments in the patent system – including shifting judicial standards for patent- eligible subject matter and the increased avail - ability of post-grant challenges at the patent office – that have increased the importance of trade secret protection as an alternative vehicle for protecting intellectual property. Moreover, as the developed world continues its shift from a manufacturing economy to a knowl - edge-based one, where the most rapidly grow - ing sectors offer software and services, trade secret laws are more relevant than ever. Artificial Intelligence in Full Force Generative artificial intelligence (AI) is here to stay. Various industries have begun using large language models (LLMs) to analyse big data, create work products and even innovate by developing novel ideas or inventions. AI applications and LLMs raise several issues for trade secret protection. First, they may cap - ture and store information that may be used to train and enhance the AI’s ability to gener - ate results. If one were to input a trade secret into an AI application or LLM prompt, the trade secret could be at risk of unintended exposure to the company behind the AI application depend - ing on the terms of the application’s end-user licence agreement. This concern is particularly salient in light of the expanded use of generative

AI in the workplace, which has resulted in dis - closures of trade secrets through ChatGPT and Sundstrom’s leak of confidential meeting notes and data through the AI tool “Otter”. Further - more, creators of some of the largest generative AI applications, such as OpenAI, preserve the ability to review inputs provided by users and potentially disclose such inputs to affiliates or third parties. Second, the trade secret could be used as a training input for other problems or prompts, resulting in potential exposure to oth - er end users of the AI application. Third, trade secrets stored by the AI application, which often occurs based on AI applications’ storage of training inputs provided by their users, may be at risk of exposure from security breaches tar - geting the companies behind the AI application. Each of these issues will push trade secret own - ers to implement new ways to safeguard their trade secrets, such as updating employment agreements, drafting internal AI-use policies that limit the ways in which employees may use generative AI, training employees in light of such updated policies and agreements and carefully negotiating with companies behind AI applica - tions to limit the use or accessibility of trade secret inputs. Alternate arrangements to enable greater trade secret protection may include the purchase or development of an internal genera - tive AI application or use of custom non-disclo - sure agreements for generative AI tools. Another evolving interaction between generative AI and trade secret protection concerns scenar - ios in which generative AI itself produces trade secrets. Unlike patent and copyright protection, trade secret protection is not limited to human inventors, and the broad definition of “trade secret” may enable protection of entire AI plat - forms, training algorithms, inputs and outputs. The scope of protection for AI-generated trade

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INTRODUCTION Contributed by: Simon Bushell, Gareth Keillor and Maitreyee Dixit, Seladore Legal

secrets remains largely unexplored, however, and hinges on issues such as: • the extent to which designers of an AI system hold trade secret rights as to algorithms that have evolved in a way that the designers can - not articulate; • the impact of such lack of knowledge on trade secret misappropriation claims and recoverable damages; and • the evolving efforts to define transparency in AI. Shifts in Employment Practices Chambers Trade Secrets Global Practice Guide 2025 focuses on best practices for protect - ing trade secrets and avoiding the pitfalls of encroaching on others’ trade secret rights. A key area to which trade secret owners must remain alert is the use of technological and other protections to safeguard their valuable intellec - tual property. Recent decades have seen a sea change in the way employers recruit and main - tain their workforce, including hiring a substan - tial number of remote employees, increased use of independent contractors and the rise of the “gig” economy, in which an ever-rotating cast of independent workers may have access to the company’s confidential information. On top of these existing trends, shifts to hybrid and/or fully remote workplaces, even as many sectors make a push to return to traditional office-based employment, require balancing agility and innovation with appropriate confi - dentiality controls. The increased focus on remote work under - scores the need to create sophisticated con - fidentiality measures to protect trade secrets without impairing the ready interchange of ideas and information in collaborative work environ -

ments, which may be necessary to promote the very innovation that generates trade secrets. Long gone are the days when a company could simply lock its crown jewels in a vault and rest easy knowing its trade secrets were safe. In addition to the lasting shift away from tra - ditional workplaces, lawmakers from various states and the Federal Trade Commission (FTC) have demonstrated increasing aversion to non- compete agreements. While these changes would result in an even more mobile workforce that may choose to pursue new opportunities and leverage experiences from prior compa - nies, causing the risk of misappropriation to grow, the status of the FTC’s noncompete ban is uncertain in light of a Texas federal court rul - ing (currently being challenged by the FTC on appeal) that struck down the ban nationally and prevented its enforcement through a permanent injunction. Employees may feel incentivised to use knowledge and insight gained at prior employers to differentiate themselves in a new job. Without adequate training and precautions, the line between acquired skills and acquired confidential information could blur. New employ - ers (whether leanly staffed start-ups or global heavyweights) should implement stringent pro - cedures for insulating themselves from others’ confidential information, while former employers must remain vigilant in safeguarding the improp - er use of their hard-earned property or risk losing it to competitors. Litigation and ADR Because disputes over trade secrets arise even when such precautions are taken, chapters in this guide explore the latest trends in trade secret litigation and alternative dispute resolu - tion (ADR) proceedings. Given the high stakes for both sides in a trade secret dispute, it will be important for counsel to consider the full spec -

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INTRODUCTION Contributed by: Simon Bushell, Gareth Keillor and Maitreyee Dixit, Seladore Legal

International Considerations Protecting trade secrets internationally contin - ues to be dynamic and unpredictable. Courts in the USA are just beginning to grapple with issues of liability and damages based on con - duct occurring overseas, while many foreign jurisdictions are themselves still developing their trade secret jurisprudence. Global businesses must navigate the laws of each country and terri - tory on a case-by-case basis and make informed decisions about how to safeguard trade secrets locally as well as centrally, to ensure that they do not inadvertently lose global protection for failure to comply with a single foreign law. Trade secret owners conducting business in the USA should also not forget that the US Inter - national Trade Commission (ITC) can conduct investigations and recommend prohibitions against importing articles based on the theft of trade secrets. Although there was a long lull in such investigations, there has been a surge in investigations and enforcement actions at the ITC in recent years. As a result, companies doing business glob - ally should stay apprised of the latest develop - ments in litigation involving international parties, whether in the federal court system, at the ITC or globally – that part, the authors assure you, is not a secret.

trum of offensive and defensive resources that may be available under statutory and common law misappropriation laws and advise clients accordingly – whether that entails implement - ing procedures for effectively maintaining the confidentiality of trade secrets or minimising the risk of coming into the possession of or using a competitor’s trade secrets. Increasing Prevalence of DTSA Lawsuits In the USA, just as the Uniform Trade Secret Act displaced nearly all state-specific common law misappropriation schemes, providing a theo - retically uniform body of law across the many states, Congress enacted the Defend Trade Secrets Act (DTSA) in 2016, building on earlier federal economic espionage statutes to create a federal system of trade secret law. Now that the first wave of DTSA cases has made its way through the federal courts, greater uniformity and certainty on key issues is beginning to be seen. As explored in this Global Practice Guide, a robust body of case law is developing on topics such as pleading requirements, the required par - ticularity for descriptions of trade secrets in dis - covery, liability based on conduct predating the enactment of the DTSA and allowable measures of damages. The enactment of the DTSA, not surprisingly, has resulted in a significant uptick in federal filings, as trade secret owners seek to benefit from the perceived uniformity and pre - dictability of the federal courts. Moving forward, counsel should keep up to date with the latest developments in DTSA litigation, which is prov - ing to be an indispensable part of every trade secret owner’s toolkit.

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AUSTRALIA

Australia

Law and Practice Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

Sydney

Tasmania

Contents 1. Legal Framework p.13 1.1 Sources of Legal Protection for Trade Secrets p.13 1.2 What Is Protectable as a Trade Secret p.14 1.3 Examples of Trade Secrets p.14 1.4 Elements of Trade Secret Protection p.14

1.5 Reasonable Measures p.14 1.6 Disclosure to Employees p.14 1.7 Independent Discovery p.15

1.8 Computer Software and Technology p.15 1.9 Duration of Protection for Trade Secrets p.15 1.10 Licensing p.15 1.11 What Differentiates Trade Secrets From Other IP Rights p.15

1.12 Overlapping IP Rights p.16 1.13 Other Legal Theories p.16

1.14 Criminal Liability p.16 1.15 Extraterritoriality p.16 2. Misappropriation of Trade Secrets p.17 2.1 The Definition of Misappropriation p.17 2.2 Employee Relationships p.17 2.3 Joint Ventures p.17 2.4 Industrial Espionage p.17 3. Preventing Trade Secret Misappropriation p.18 3.1 Best Practices for Safeguarding Trade Secrets p.18 3.2 Exit Interviews p.18

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AUSTRALIA CONTENTS

4. Safeguarding Against Allegations of Trade Secret Misappropriation p.18 4.1 Pre-Existing Skills and Expertise p.18 4.2 New Employees p.19 5. Trade Secret Litigation p.19 5.1 Prerequisites to Filing a Lawsuit p.19

5.2 Limitations Period p.19 5.3 Initiating a Lawsuit p.19

5.4 Jurisdiction of the Courts p.19 5.5 Initial Pleading Standards p.20 5.6 Seizure Mechanisms p.20

5.7 Obtaining Information and Evidence p.20 5.8 Maintaining Secrecy While Litigating p.21 5.9 Defending Against Allegations of Misappropriation p.21

5.10 Dispositive Motions p.22 5.11 Cost of Litigation p.22 6. Trial p.22 6.1 Bench or Jury Trial p.22 6.2 Trial Process p.22 6.3 Use of Expert Witnesses p.23 7. Remedies p.23 7.1 Preliminary Injunctive Relief p.23 7.2 Measures of Damages p.24 7.3 Permanent Injunction p.25 7.4 Attorneys’ Fees p.25

7.5 Costs p.26 8. Appeal p.26 8.1 Appellate Procedure p.26 8.2 Factual or Legal Review p.27 9. Criminal Offences p.28 9.1 Prosecution Process, Penalties and Defences p.28 10. Alternative Dispute Resolution p.29 10.1 Dispute Resolution Mechanisms p.29

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AUSTRALIA Law and Practice Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

Gilbert + Tobin is a leading Australian law firm, with approximately 112 partners and over 500 lawyers across its offices in Sydney, Melbourne and Perth. The firm’s trade secrets practice comprises four partners and two special coun - sel, supported by its IP, commercial litigation, and other practice groups to deliver practical and tailored legal support in clients’ high-stakes matters. The team has extensive experience advising leading domestic and international companies across sectors including consumer

electronics, entertainment, software, fast-mov - ing consumer goods, mining, and financial ser - vices. Gilbert + Tobin maintains a strong com - mercial focus and a deep understanding of how to protect confidential information and trade se - crets in preserving clients’ competitive advan - tage. The firm has achieved notable successes for clients in the Australian Federal Court and has worked collaboratively with relevant parties in cross-border disputes to safeguard clients’ critical IP assets.

Authors

John Lee is a partner in Gilbert + Tobin’s technology and IP group. John specialises in patents and trade secrets. His practice spans complex cross- border disputes, with deep

Michael Williams is a partner and the head of Gilbert + Tobin’s technology and IP group. Michael is recognised in the legal community as a market leader in IP, with three decades

expertise across digital technologies, telecommunications, life sciences, and engineering. John has achieved exceptional results in Federal Court litigation, including securing a record-setting damages award in an Australian patent case. John has also recently taken urgent action to enforce a client’s trade secrets, obtaining and executing urgent Federal Court search and seizure orders. He sits on the Law Council of Australia’s IP committee and is a member of IPTA, IPSANZ, and the Australian Institute of Company Directors.

of experience advising on complex IP issues, including the protection and enforcement of trade secrets. Michael is well known for his strategic advice, subject-matter knowledge and robust approach to disputes involving confidential information. He has an excellent record of resolving sensitive trade secret issues, achieving creative outcomes and extracting clients from intractable conflicts. Michael’s memberships include INTA, the ABA, the Copyright Society of Australia and IPSANZ.

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AUSTRALIA Law and Practice Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

Siabon Seet is a partner in Gilbert + Tobin’s technology and IP group. She also leads the

Vanessa Farago-Diener is a special counsel in Gilbert + Tobin’s technology and IP group. She is an experienced IP litigator who works closely with clients across a range of industries

brands litigation practice and is highly regarded as a leading IP litigator. Siabon has deep expertise across all areas of IP, with a particular focus on trade secrets and confidential information. She has a strong record of success in enforcement matters, acting for both Australian and global clients across a diverse range of industries. She is also known for her ability to craft innovative, commercially minded solutions to complex IP challenges. Siabon is a member of the Copyright Society of Australia, INTA and IPSANZ.

including health and life sciences, mining and resources, energy, government, technology, defence and software. Vanessa’s practice covers contentious and non-contentious aspects of IP law, with a particular focus on patent litigation and trade secrets/confidential information. Her work with clients involves the entire IP life cycle from the initial innovation stage to IP protection, commercialisation and enforcement of intellectual property rights. Vanessa is a member of IPSANZ and AIPPI.

Gilbert + Tobin Level 35 Tower Two International Towers 200 Barangaroo Avenue Sydney NSW 2000 Level 22 101 Collins Street Melbourne Victoria

VIC 3000 Australia

Tel: +61 2 9263 4000 Fax: +61 2 9263 4111 Email: info@gtlaw.com.au Web: www.gtlaw.com.au

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AUSTRALIA Law and Practice Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

1. Legal Framework 1.1 Sources of Legal Protection for Trade Secrets Unlike other jurisdictions such as the UK, there is no relevant statutory or regulatory regime governing the protection of trade secrets in Australia. Rather, trade secrets are protected in Australia through various statutes which protect against the disclosure of confidential information by imposing an obligation of confidence, as well as in contracts and in equity. Statutory Sources The Corporations Act 2001 (Cth) (Corporations Act) provides that a person who obtains infor - mation because they are, or have been, a direc - tor or other officer or employee of a corporation must not improperly use the information to gain an advantage for themselves or someone else or cause detriment to the corporation. An indi - vidual’s obligations under the Corporations Act continue after that individual has stopped being an officer or employee. The Privacy Act 1988 (Cth) (Privacy Act) is the principal Australian legislation governing the protection of personal information about indi - viduals including the collection, use, storage and disclosure of personal information by enti - ties in the public and private sectors. The Privacy Commissioner is required to have regard to the need to prevent the unreasonable disclosure of confidential commercial information in a report following an investigation of an act or practice. The Freedom of Information Act 1982 (Cth) (FOI Act) allows access to documents and informa - tion held by the government. Such documents and information often include information about private companies provided, eg, in response to a tender or under a contract. The FOI Act includes

an exemption for documents that disclose trade secrets or commercially valuable information. Contracts Trade secrets can also be protected express - ly through contractual terms that specifically establish that the information being disclosed is to be treated as confidential between the par - ties as well as implied in a contract, such as an employment agreement. Equitable Action In addition to the protections afforded by con - tract and statute, obligations of confidentiality also arise in Australia in equity, where: • information was received with the under - standing that it would be treated confiden - tially; or • the recipient ought to have realised in all the circumstances that the information was to be Australia is a party to major international intel - lectual property (IP) treaties, including the WTO Agreement on Trade-Related Aspects of Intel - lectual Property Rights 1994 (TRIPS Agreement). The TRIPS Agreement sets out general princi - ples and contains minimum standards on IP and enforcement procedures to which Australia adheres. Article 39(2) requires member states to accord protection against unauthorised use of “undisclosed information” in a way that is “contrary to honest commercial practices” , and defines “undisclosed information” for this pur - pose as: • secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the treated confidentially. International Treaties

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AUSTRALIA Law and Practice Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

circles that normally deal with the kind of information in question; • having commercial value because it is secret; and • having been subject to reasonable steps under the circumstances, by the person law - fully in control of the information, to keep it secret. International treaties apply only to the extent that they are incorporated into domestic law. 1.2 What Is Protectable as a Trade Secret Information will be a trade secret if it has the necessary quality of confidence and is not within the public domain. Such information can include technical information such as software algo - rithms, data, formulae, manufacturing processes and commercial information such as client and customer lists, information relating to pricing, sales forecasts and advertising strategies. 1.3 Examples of Trade Secrets Information in Australia that has been found to have the necessary quality of confidence to be a trade secret has included, for example: • client, customer and supplier lists; • designs such as building plans; • marketing materials;

matter of common knowledge or in the public domain. Secondly, the information must have been imparted in circumstances identifying an obligation of confidence. Additionally, the infor - mation in which confidentiality is claimed must be capable of being identified with a degree of specificity. 1.5 Reasonable Measures In Australia, a trade secret owner is required to take reasonable measures to keep the informa - tion secret in order for the information to qualify as a trade secret. A court will consider what measures the owner of the information took to guard the secrecy of the information, eg, by way of non-disclosure agreements, IT security measures, control - ling access to facilities. Courts have held, for example, that disclosure of information without imposing an obligation of confidence will mean that the information does not have the necessary quality of confidence and is therefore not a trade secret. Similarly, if the information is disclosed in a document, eg, a manual, that is not restricted, then the information does not have the neces - sary quality of confidence. In making an assessment as to whether a com - pany took reasonable measures to protect its trade secrets, Australian courts will consider all the facts and circumstances of the case includ - ing, for example, the nature and scale of the

• mathematical spreadsheets; • information relating to pricing;

• sales forecasts; and • business information.

company and type of information. 1.6 Disclosure to Employees

1.4 Elements of Trade Secret Protection An obligation of confidence will arise if it includes the following elements (Dart Industries Inc v David Bryar & Associates Pty Ltd [1997] FCA 481). Firstly, the information must have the necessary quality of confidence and not be a

In Australia, it is implied into all employment con - tracts that the employee will act with good faith towards their employer and that the employee has duties of confidence to their employer.

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AUSTRALIA Law and Practice Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

Additionally, an employee will have obligations to their employer pursuant to Sections 182 and 183 of the Corporations Act. Best practice in Australia is to have detailed IP policies and procedures and express terms in employment contracts. 1.7 Independent Discovery Trade secret protection is not the optimum innovation strategy for technologies that can be reverse engineered or independently developed. In Australia, companies with technology which can be readily reverse engineered would ordinar - ily seek patent protection. 1.8 Computer Software and Technology There are no specific protections for trade secrets in Australia based on the technology in issue. In Australia, computer software, including source code and object code, is protected under copyright law as “literary work” . If a trade secret owner believes that there has been a misappro - priation of its computer software, in addition to claims available for breach of trade secrets, the owner will also have a claim under copyright law. 1.9 Duration of Protection for Trade Secrets Trade secret and confidential information protec - tion will last as long as the information remains outside of the public domain or unless otherwise specified in contractual provisions. So long as disclosure of the information which constitutes the trade secret or confidential infor - mation is under an obligation of confidence, whether implied such as in an employee con - tract or express such as under a non-disclosure agreement, protection will remain. Generally, the

older the information in issue, the more difficult it will be for the owner to establish that it has remained confidential and not entered the public domain. 1.10 Licensing As a trade secret is not a proprietary right, it cannot be assigned or licensed in and of itself. To achieve functional exclusivity, and effect a transfer of trade secrets, entities typically enter into an agreement that requires the original trade secret owner to: (i) disclose the trade secret, typically in an agreed form; and (ii) contractually agree to strict obligations of confidentiality not to use or allow others to use the trade secret going forward. Subject to the terms of the contract, once assigned or licensed, the assignee or exclusive licensee may enforce its right in the trade secret against others. Where a trade secret owner has granted an exclusive licence to use its trade secrets, both parties will be required to safeguard the secrecy of the information to ensure that trade secret status is not lost. Where a document is both a copyrighted “work” and discloses trade secrets, it is common to take assignment of the copyright in the work. 1.11 What Differentiates Trade Secrets From Other IP Rights Trade secret and confidential information protec - tion differs from other forms of IP right protec - tion in Australia, as there is no relevant statutory or regulatory regime governing the protection of trade secrets and confidential information in Australia like those which exist for other forms of IP, eg, patents, trade marks, designs, copyright and plant breeders rights.

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AUSTRALIA Law and Practice Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

The absence of any relevant statutory or regula - tory regime means that there is no prescribed duration for trade secret protection (in contrast to other forms of IP) and there is no registration process (such as exists for, eg, patents, designs and trade marks). 1.12 Overlapping IP Rights It is not uncommon in Australia to assert trade secret rights in conjunction with a claim of cop - yright ownership. For example, internal docu - ments relating to the design of an electronic gaming machine can attract both protection as “work” under the Copyright Act 1968 (Cth) and as a trade secret. If the information is taken by an employee, claims for breach of contract, breach of fiduciary duty and (if the employer was a corporation) breach of the Corporations Act will also apply. 1.13 Other Legal Theories Claims in relation to trade secrets can be com - menced in Australia where there is use or threat - ened use of the trade secret without consent. A number of trade secret cases commenced each year in Australia relate to employee mis - appropriation of trade secrets whereby the employer commences proceedings to recover its trade secrets and stop any potential use by the former employee. In addition to claims against a former employee, including for breach of employment contract, a third party may be liable in relation to a breach if they are deemed to have knowledge of it. Aus - tralian courts have held that the following will satisfy the knowledge limb: • actual knowledge; • wilful blindness;

• wilfully and recklessly failing to make such inquiries as an honest and reasonable person would make; and • knowledge of circumstances which would indicate the facts to an honest and reason - able person. Additionally, a third party may be liable for inducement for breach of contract. In Australia, this involves a defendant inducing another per - son to break a contract with the plaintiff. In order to make out a case for inducement for breach of contract, the plaintiff must show that the defend - ant procured or induced the breach of contract and that there is proof of the damage caused by the inducement (Daebo Shipping Company Ltd v The Ship Go Star (2012) 207 FCR 220). 1.14 Criminal Liability Misappropriation of trade secrets are pursued as civil claims in either the Federal Court or the Supreme Court of the relevant state or territory. An exception is where the misappropriation of the trade secrets is by a director or other officer or employee of a corporation who has used their position to obtain the information, and the use of the trade secrets has a dishonesty element, such that there has been a likely breach of Sec - tion 184 of the Corporations Act, or where the misappropriation of trade secrets involves a foreign government principal under the Crimi - nal Code Act 1995 (the Code). If found guilty of either offence, the court can impose a maximum penalty of up to 15 years imprisonment. 1.15 Extraterritoriality Generally, any misappropriation must be within Australia in order for a trade secret owner to bring a claim under Australian law.

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AUSTRALIA Law and Practice Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

There are, however, discrete instances where a claim can be brought in Australia. This includes, for example, if a claim: • is against a company that is carrying on busi - ness in Australia; or • is against an individual whose employ - ment contract has a choice of jurisdiction or against a company whose contractual arrangements include a choice of jurisdiction that includes Australia.

In addition to the implied obligations in an employment contract, including express terms for the ownership and treatment of IP in employ - ment contracts provides further protection for employers. 2.3 Joint Ventures Obligations between joint venturers in relation to trade secrets will usually be covered in the contractual arrangements between the parties. It is common in Australia for joint-venture agree - ments to: • distinguish between background IP and pro - ject IP; • include obligations not to disclose the other parties’ confidential information; • identify who owns project-specific IP; and • how project-specific IP can be used. 2.4 Industrial Espionage Claims of industrial espionage in Australia will proceed in the same manner as any other pro - ceedings relating to trade secrets. The types of claims available will depend upon the specific facts of the case, including whether the trade secrets were taken by a former employee or business partner. In considering the appropriate remedy to award a successful plaintiff, the court will have regard to the conduct of the defendant, including whether there was an intentional breach of confidential information, which can lead to exemplary dam - ages (in the case of a breach of contract) and a broader form of injunction.

2. Misappropriation of Trade Secrets

2.1 The Definition of Misappropriation In order to make out a claim of trade secret mis - appropriation, the owner of the trade secret must show that there has been, or is threatened to be, an authorised use or disclosure of the informa - tion which causes detriment to it (Smith Kline and French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health [1989] FCA 556). It is not necessary for the owner of the trade secret to show that the defendant gained access through unlawful means in order to commence proceedings. 2.2 Employee Relationships The implied obligations in an employment con - tract are an important legal duty that protects employers from misconduct of employees. An employee will be in breach of their fiduci - ary duties if they engage in activities which are incompatible with the fulfilment of their duty or involve an opposition or conflict between their interest and their duty to their employer.

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AUSTRALIA Law and Practice Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

3. Preventing Trade Secret Misappropriation 3.1 Best Practices for Safeguarding Trade Secrets As protection of trade secrets in Australia relies principally on contractual and equitable obliga - tions, the following contractual tools are recog - nised as important in safeguarding a business’ confidential information and trade secrets across all industries. • Use of non-disclosure agreements prior to disclosing confidential information and trade secrets. • Use of confidentiality clauses in both employ - ment and business contracts. • Non-compete clauses in employment con - tracts to limit former employees from engag - ing in competitive activities. • Exclusivity clauses in business contracts to restrict the sharing of information. In addition to contractual tools, other best prac - tices commonly used in Australia to safeguard a business’ confidential information and trade secrets include the following. • Locking down a business’ IP and confidential information and limiting access to “need to know” basis. • Restricting physical access to specific loca - tions such as laboratories. • Restricting access to online systems, such as files, to only those employees working on specific projects. • Undertaking a review of an employee’s recent data history and IT access upon resignation. 3.2 Exit Interviews Exit interviews will be dependent on the employ - er and will vary across Australia. Typically, an exit

interview will include questions as to the nature of the employee’s new position and the com - pany the employee is moving to so as to deter - mine whether any non-compete restrictions in the employment contract apply. It is not typically the case that an employer in Australia will require a departing employee to provide written assurance in relation to confi - dential information and trade secrets. However, employers typically provide an exit letter remind - ing the departing employee of their ongoing obli - gations regarding non-disclosure of confidential information and trade secrets. 4. Safeguarding Against Allegations of Trade Secret Misappropriation 4.1 Pre-Existing Skills and Expertise It is accepted by Australian courts that employ - ees will have a bank of general knowledge and skills relevant to their field of expertise. Employment contracts which attempt to pro - hibit former employees from using their general knowledge and skills for subsequent employers have been held to be unenforceable. Similarly, long non-compete provisions in employment contracts are also commonly held to be unen - forceable in Australia. While Australia does not recognise the US doc - trine of “inevitable disclosure” , Australian courts can consider as part of their equitable jurisdic - tion whether to impose a non-compete term for a former employee in circumstances where there is no express non-compete in the employment contract and the new employer’s work substan - tially overlaps with the former employer’s work

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AUSTRALIA Law and Practice Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

5.2 Limitations Period There are no specific statutory limits in relation to trade secret rights in Australia. In circumstances where there has been an unau - thorised use or disclosure of information which is the subject of a confidentiality arrangement, then a limitation period will apply (six years for Queensland, New South Wales, Victoria, Tasma - nia, South Australia, Western Australia and the Australian Capital Territory, and three years for the Northern Territory). 5.3 Initiating a Lawsuit Once a trade secret owner becomes aware that its trade secrets have been taken or misappro - priated, it can commence proceedings in either the Federal Court or a state/territory Supreme Court. Trade secret proceedings, like other civil pro - ceedings, are commenced by way of pleadings which require the plaintiff to set out its case and the remedies it seeks. 5.4 Jurisdiction of the Courts Australia has a tiered court system which includes a federal court system, state/territory courts and specialist courts. Proceedings for misappropriation and breach of trade secrets and confidential information can be brought in either the Federal Court of Australia, which is a national court, or the Supreme Court of the relevant state/territory. The choice of juris - diction will depend on whether the party initiating the proceedings has an equitable, contractual or statutory claim and whether there are any addi - tional IP rights, such as copyright infringement, being asserted. The Supreme Court is generally the appropriate Court for matters involving equi - table claims whereas the Federal Court more

(Liberty Financial Pty Ltd v Jugovic [2021] FCA 607). 4.2 New Employees In order to protect itself from claims of trade secret misappropriation, companies will often include contractual obligations in employment contracts requiring that no third party trade secrets or information not in the public domain is used by the employee. Larger companies will also often have robust IT policies and procedures in place to limit any potential misuse by employees of both the com - pany’s and any third parties’ IP. This will often include restricting use of data transfer devices such as USBs and monitoring of employees’ document activity. 5. Trade Secret Litigation 5.1 Prerequisites to Filing a Lawsuit When a party believes that its trade secrets and/or confidential information may have been misappropriated or taken, it must first deter - mine with specificity the information in issue. The party must then identify whether there is an equitable, contractual and/or statutory breach of confidence and ensure that it can positively make out its case prior to commencing proceed - ings. Prior to commencing proceedings, a trade secret owner may send a cease and desist letter to the potential defendant outlining its case and requesting the return of its trade secrets together with an undertaking that the potential defendant will not use the trade secrets. Whether a cease and desist letter is sent will turn on the facts of the case and extent of any potential damage.

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AUSTRALIA Law and Practice Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

typically hears contractual claims. If additional IP rights are being asserted, then the proceedings will need to be commenced in the Federal Court. 5.5 Initial Pleading Standards In Australia, in order to commence a claim in relation to trade secret theft or misappropriation, the trade secret owner must be able to satisfy the four elements of the claim prior to commenc - ing proceedings. The four elements are: • the trade secret owner must be able to iden - tify with specificity, and not merely in global terms, that which is said to be the information in question; • must be able to show that the information has the necessary quality of confidence (and is not, for example, common or public knowl - edge); • the information was received by the defend - ant in such circumstances as to import an obligation of confidence; and • there is actual or threatened misuse of that information, without the consent of the plain - tiff. The pleadings filed by the plaintiff are required to address each for the four elements. Given the nature of trade secrets, it is common that the information in issue is separately referred to in a confidential pleading. 5.6 Seizure Mechanisms Australian courts have broad powers to make orders, including search orders (Anton Piller orders), at various stages of a proceeding. Search orders can be made by the court ex parte (see, for example, Aristocrat Technologies Aus - tralia Pty Ltd v Tran, Federal Court No NSD10 of 2024).

A court can grant a search order if the following conditions are met. • There is a strong prima facie case. • The damage (potential or actual) to the plain - tiff will be serious of the order is not made. • There is sufficient evidence that the plaintiff has in their possession important evidentiary material. • There is a real possibility that the plaintiff may destroy such material or cause it to be unavailable in a proceeding or prospective proceeding. Search orders are carried out by an independent legal adviser. In cases where the search orders include the seizure of electronic devices, an independent forensic expert will also be included in the search party. 5.7 Obtaining Information and Evidence Pre-Trial Discovery In both the Federal Court and state/territory Supreme Courts, pre-trial discovery is permit - ted by order of the Court and is known as “pre- liminary discovery” . Preliminary discovery is an order requiring a prospective defendant to give discovery of documents that are directly relevant to whether the prospective plaintiff has a claim against the prospective defendant. To obtain preliminary discovery, the prospective plaintiff must show that after making reasonable enquir - ies, they do not have sufficient information to decide whether to commence a proceeding and they reasonably believe that they may have a right to relief (Aristocrat Technologies Australia Pty Ltd v Ainsworth Game Technology Ltd [2018] FCA 1511). Preliminary discovery can be a very useful mech - anism, particularly for employers who believe that a former employee has misappropriated

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AUSTRALIA Law and Practice Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

its trade secrets but may not have sufficient evidence (such as forensic evidence) to bring proceedings (see, for example, Aristocrat Tech - nologies Australia Pty Ltd v Light & Wonder Inc [2024] FCA 439). The party giving discovery must serve on other parties a list of documents that describes the: • categories of documents in its control; • documents previously but no longer in its control; and • privileged documents. The list of documents must be verified by affi - davit. The party giving discovery then produces the non-privileged documents. If this party does not produce the documents, the other parties can apply for an order for production of these documents. Other Mechanisms Other mechanisms to obtain evidence include the following. • Identity discovery – this is an order requiring a party to give evidence or produce docu - ments relating to the identity of a prospective defendant. • Search orders (Anton Piller orders) – a search order requires the defendant to permit per - sons to enter its premises for the purpose of securing the preservation of evidence that may be relevant to an issue in the proceeding (or prospective proceeding). • Inspection orders – these are orders to inspect, sample, observe or conduct an experiment on any document or item. • Interrogatories – these are orders requiring another party to provide written answers to questions, verified on affidavit.

• Notices to admit facts or documents – a party can require another party to admit the truth of any fact or the authenticity of any document. • Notice to produce – a notice to produce is a request for the inspection of any document or item. • Subpoenas – subpoenas require attendance in court to give evidence and/or produce any document or item. 5.8 Maintaining Secrecy While Litigating In order to maintain the secrecy of the trade secret or confidential information at issue in a proceeding, Australian courts will often make orders requiring that certain materials (includ - ing evidence, documents produced, and parts of judgments) be kept confidential and only avail - able to certain persons or classes of persons (eg, the parties’ legal advisers, experts retained in the proceedings, and the principal instructing in-house counsel). 5.9 Defending Against Allegations of Misappropriation Defences or potential arguments available to a defendant in trade secret proceedings include: • that the information is in the public domain; • that the information does not have the neces - sary quality of confidence; • that the plaintiff has failed to identify with pre - cision what information the defendant is said to have used – identification in global terms by the plaintiff is insufficient; • that the alleged duty of confidence is not owed by the defendant to any particular person – an equitable duty of confidence is not owed at large – rather, it is owed to certain persons having imparted information in circumstances importing an obligation of confidence;

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