 So I want to introduce our speaker for tonight. I'm really pleased to have Nari Lee and who's a professor of intellectual property at Hankin, which she joined in 2012. She studied law at UR Women's University in Korea and Kyushu University in Japan and holds a PhD from the University of Eastern Finland and a Doctor of Laws from Kyushu University. Since 1996, she has researched and taught in the area of intellectual property and international trade in universities in Europe, Asia and the USA. And her research experience includes post the post of affiliated research fellow at the Met's Plank in 2012 to 2014, researcher at the research visitor at the University of Cambridge in 2016, senior global house of fellow at New York University Law School in 2017. 2019 in the spring she served as a designated professor at the Center for Asian Legal Exchange at Nagoya University in Japan, and very much to her liking. In 2019 she was a research visitor at the Center for Intellectual Property and Information Law at the University of Cambridge. So, Nari is going to talk to us today on cross border misappropriation of trade secrets. So, over to you Nari. Okay, so thank you very much for that introduction. And thank you for inviting me to join this webinar series. I'm extremely pleased. And also because of the fact that I really, really, really miss a visit in Cambridge. And, and, and I'm sitting here in snowy Finland. It's really cold outside and I keep on thinking about how beautiful a Cambridge was during spring, and how lovely the people at the Civil War. So, so I miss it very much. So I, this was a welcome invitation for me to talk about talk to people I love, and, and talk about a topic that I feel quite passionate about in a way because while I was, which is a cross border misappropriation of trade secret. When I was preparing this talk realized that I've been thinking about and I've been sitting on this topic since 2017. When I come across a this topic, when I was visiting the United States, and at the invitation of Professor Sharon Sandin, I visited her law school and gave a talk on EU trade secret directive. I had a request of the organization organizer at the time, Professor Sandin asked me to talk about enforcement related issue. So without actually doing so much study on this topic I actually, you know, listed all this you know applicable law and jurisdiction questions related with enforcement of trade in Europe and that seems to be quite confusing. And what I can say, and you will hear from my talk today that that situation didn't change that much still since 2017. And also my knowledge of the subject may be even more confused about this topic. But regardless, this talk is loosely based on a two papers. Two papers I drafted one of them are two book chapters I drafted. One of them has already been published in a book edited by Nicholas Brune and Grandi Moody and Maria Levine and Oscar early that came out this year. I wrote a book entitled a transition and coherence in intellectual property law. And there are there's a one chapter that I wrote an open, which is entitled open yet secret trading of tangible goods and trade secret. And another book chapter I wrote on the lady topic, which will be published is hedging into property in visible trade secrets and international trade in goods I hopefully hope, I hope that this will be published quite soon. Both of these book chapters address the issue, the starting point of the question whether trade secret is a intellectual property, or even property. So that I asked this question. Because of the fact that that has been a theoretical debate what is the nature of trade secret, or what is the nature of trade secret protection is that intellectual property right or is that property right. The book chapters deals with this, this issue and in my open yet secret and trading of the tangible goods and trade secret in that book chapter. I argue that trade secret directive European Union trade secret directive. In particular article for paragraph five liability introduces a property like element in the trade secret protection, which is problematic in a way, because trade secret the original trade secret has always been considered unfair competition. And trade secret as a discipline of law, do not have that much doctrine that deals with the object, object based misappropriation or infringement for that matter. And similarly, in the other book chapter hedging into property I approach this question from constitutional point of view whether it is a trade secret is a property in the sense that that is a property interest that is safeguarded by constitutional law as a fundamental that I go through different layer of European Union's law on this matter. And while I was working on that chapter, the decision from UK High Court on cell guard. I've seen of its cell guard v senior came out, which deals with the question related with the infringing goods goods question. So toward the end of that chapter I actually had some text written on four pages or so written on this topic that I'm presenting today, but it is my hope that based on today's talk. I will produce a standalone paper on this particular topic and cross border infringement cross border misappropriation I call it infringement, which is wrong because I pointedly do not want to use the word infringement in this in this context cross border misappropriation of trade secret. So that is a starting point of this paper. Why do I actually think about how, what, what is the research question that this project is asking is, how do we think about trade secret cross border misappropriation in other words how to conceptualize this. The reason why I'm asking this question is that in other in intellectual property matters in intellect cross border intellectual property infringement matters, we often have this issue of foreign domestic rights that gets infringed in conduct infringement action in foreign countries, leading to domestic dispute, or foreign right gets infringed in domestic conduct and giving rise to dispute in domestic court, or even in some situations foreign rights, which is infringed by conduct in foreign countries, and somehow through connecting the end of in a domestic court. The question that that trade secrets course for the misappropriation. By the way, misappropriation I, I, it's not just miss up on local acquisition but it's, I use this misappropriation broadly cover all misuse of trade secret, including all acquisition disclosure and use of trade secret in trade secret, miss, miss appropriation cases. Because of the nature that there's no correlating domestic trade secret right and foreign trade secret right, but rather it is tied to a conduct of conduct that is regulated as unfair conduct that is harmful for honest commercial practices. So it gives rise to the question, whether there's such thing actually do exist in a way so that the question that I'm actually asking is, can trade secret be localized in like the way IPR does that domestic right for right, and can we conceptualize cross border misappropriation as cross border misappropriation, or do they actually cross borders called do cross border misappropriation actually cross border. That is the research question that I would like to answer in in this project, as you can hear this is on work in progress this is not ready yet, although some part of it is written. So any comments and questions you, you could give at the end of the presentation would be very useful. So, the background of this as I had said is European Union trade secret directives. Article four, which provides for type of misappropriation misappropriation in article four of trade secret directive, which is a minimum harmonization director. That means that members states may provide more extensive extensive protection of trade secret provides for kind of for for types of trade secret misappropriation. In paragraph two, on local acquisition by primary actor and paragraph three, using disclosure after on local acquisition or in breach of contract or other due to not to disclose and paragraph four, by third party on local acquisition user disclosure and paragraph five, which is all knowing trading of infringing goods. I have in the next slide as you can see I have a fancy graph. So the graph graphically these close can be explained in this manner that primary actors, actors behavior so primary actors acquisition, authorize a commercial dishonest is providing paragraph two, and primary actor actor who unlawfully acquire or user disclose and use it or user disclose a trade secret information against duty or duty of confidence or other kind of duty that is providing paragraph three of article four. And the difference is between a primary act what I consider primary actors conduct to paragraph four and five is paragraph. This primary actors conduct have contract or other duties that's connecting them to trade secret holder so there's a possibility of contract or their possibility agreements or their possibility of directly connecting them to trade secret holder, holder. Whereas third party liabilities I third party library that is providing paragraph four and trading of infringing goods the library which is provided in paragraph five is connected to the trade secret holder through the knowledge through the knowledge of unlawful, unlawfulness, unlawful use or and so on and so forth that through the knowledge they are connected not the contract so they cannot be. There is a. There is a contract that relates with contract or other duty that is imposed on the primary actor but the second director so called third party liability is outside the boundary of that contract. And it is here paragraph five liability falls and and to illustrate, I can show you the paragraph five of trade secret director directive. Here it's, you can see from here that production offering and placing on the market of infringing goods or the importation export to storage and infringing goods to put those purposes to also be considered an unlawful user trade secret where the person carrying out such new or odd under the circumstances to have known that Tracy could was used on locally within the meaning of paragraph three. So it ties traders of infringing goods and this provision, give rise to a liability or impose liability on the traders of infringing those who are producing offering and so on and so forth. On the condition that they know or should have known that that the trade secret was used on locally so there's an underlying on lawfulness or paragraph three. And this infringing goods in trade secret directive, as has been pointed out by many authors. And it is problematic because it is defined quite broadly in article two for it includes goods design characteristics functioning production process of marketing, which significantly benefits from trade secret or locally acquired a user disclose. And that means that whole bunch of goods, not only directly embodying the trade secret, but goods that may actually benefit so, so called mixed goods or even partially, partially connected goods that that as long as it is significantly benefiting to from the unlawfully acquired user disclose trace trace it could be covered by this liability. Also, so, and also at the same time, since I'm showing you the paragraph five, we can look it and look into the wording of this text it doesn't say anywhere that this person who's carrying out this activities are necessarily third party either. So this actually could in a way that I was when I was looking very hard into this paragraph that I was wondering whether is this actually a third party liability or even primary liability because it doesn't say it from the text alone that this has to be a third party so anybody, it could be anybody who's carrying out such activities, who if they knew, or, or should have known that what they were doing, what the goods that they're trading has been produced using tracing that has been unlawfully used or disclosed within the meaning of paragraph three. So this creates quite a lot of open in a way, flexible and broad application. And as this being directed, of course, how member states have next transpose them into their member state school would be the crucial informations to find out what is the scope of this liability, but also in and of course, this text doesn't actually provide us with much information, but when should we know when does this person at carrying out such activity should know. And most importantly for today's discussion that where actually should it be is it because by especially in highlighted in bed, if you look at importation exploitation is covered by this, this paragraph five liability, but importation and exportation, which are such conduct that always imply two different places at least at these two different places. So does this close in and of itself include a clue about applicable law, or does it actually say that applicable law should be somehow decided by reading carefully reading and interpreting this paragraph. But that is not if you look at the rest of that is not necessarily the case but first what is the purpose of this, this paragraph five liability, the trade secret directive of recital for 28 clearly shows that this liability or trade secret directive, in general, is very well aware of cross border means of operation and cross border in French cross border activity using trade secret and recital for shows that the targets across what activity and recital 28 shows that considering global or recital 28 lies that considering the global nature of trade, it is necessary that such measures include the prohibition of importation of those goods into the union, or the storage for the purpose of offering and placing that on the market so paragraph five liability targets, those goods that are originating from outside European Union entering into European Union and prohibit such importation based on paragraph five five five. Right, so this cross border activity should be covered by this liability. This raise a important questions and how do we decide how it is, how do we decide and what should be then applicable law in understanding and finding of the liability based on paragraph because as I said, because it's cross border conduct is implied importation exploitation, at least two territoriality or two jurisdiction is implied in this and unfortunately trade secret directive alone doesn't help us to settle this question because the directive do not establish any harmonized rules for judicial corporations jurisdiction and recognition and enforcement judgment in civil commercial matters, namely the jurisdiction of rules or deal with applicable law. The question trade secret directive is not meant to harmonize this thing. So we should not read from paragraph five, that's, we should not read from paragraph five and any applicable law or any rules related with jurisdiction and other union instruments such as and Roman Rome regulations one and two, then should be used in terms of understanding which countries and which countries law should be applied and where should be to what should be the applicable law. So, so this opens up questions are related with both jurisdiction and applicable law. So that makes it crucial in a way in jurisdiction and and and cross border to cross border dispute. In understanding jurisdiction was an applicable law rules characterizing the underlying dispute or characterizing disputes and cause of action is crucial. I'm sorry I'm doing something with my mouse that goes back and forth all the time. So the characterization of trade secret dispute becomes crucial because in conflict of law rules. I'm sorry. Is it me who's doing this is it someone else doing this. Okay, so conflict of law rules. This thing, and it is crucial to characterize the underlying dispute trace is a trade secret dispute correctly to apply correct rules concerning jurisdiction as well as applicable law, but trade secret as as it has been written by many, many scholars as well as you can see from case law includes all different types of disputes and there are complex layers of issues that may that might imply any of this is it is it to start with is it even a dispute related with trade secret is it a dispute or dispute related public law, was it a dispute related private law, because sometimes trade secret relates with the state act of compelling certain parties to disclose certain information. Is it criminal and civil law, because civil law. Most many countries have criminal liability on trade secret misappropriation misuse and trade secret directive of course still did only civil law liability, due to the competence of your opinion have been covering only civil civil liability but if civil is it a contract or not contractual issue as we have seen in my graphic representation of Tracy could miss a provision that could be private primary actors whose conduct is duty bound by contract and do your confidence, or they could be non contractual issues, as in the case of third party. This is one paragraph type of situation, and most importantly, as I said in the beginning of this presentation there's a question of whether trade secret is is property or unfair competition or neither for that matter. And there are, because of the fact that trade secret dispute relates very often for my employee, their labor law issues that are involved, and is that an is that rule concerning employment is the primary cause of action or should it should it be something else. And of course, last but not least, there are issues related with the personal informations and privacy issues that might be involved here so what I'm trying to say the characterization of dispute is crucial in figuring out which rule to apply and cross for the dispute. On the other hand, trade secret disputes are brought with many different clues as to which types of law should be applicable and trade secret dispute, whether a trade secret directive in and of itself does not help, because it doesn't say either. In recital 16 trade secret directive states that that doesn't create the directive should not create an exclusive right to know how an information protected as trade secret. That doesn't mean so that means that it is not an IP but that doesn't mean that it is not an IP always because when the state may still in transposed or may still protect tracing law as a species of IP predating trade secret directive also. So, so it will again depends on you and we are now talking about not only the outside European Union, we are talking about within European Union that could be differences also on the characterization of what is the nature of trade secret. I mean, also, the prevailing view is trade secret disputes and trade secrets are unfair competition regulation. And indeed that is the point that I was making in one of the book chapters that I introduced to you in the beginning of this talk. And I argue that actually trade secret shouldn't be considered intellectual property and quota justice of European in interpreting any disputes, any, any part of this trade secret directives and disputes related with trade secret directive the interpretation shouldn't be not away from my people to work on fair competition, but then again trade secret directive in and of itself says in a in a limited fashion, that it does not aim to reform or harmonize the law on competition in relations to slay machine So, but on the other hand trade secrets are often regulated as unfair competition in the competition law of the member states so that confuses matter, even father. And so there's no clarity in characterizations that can be that can be seen from the direct to the cell. So that leads to an even more uncertainty when we are applying or looking for correct rules to apply when it comes to a issues related with jurisdiction, Brussels regulation, which provides for special jurisdictions for matters of contract toward criminal proceeding close connection. When it came in the case of multiple dependent employed on the cell and exclusive jurisdiction for IP. Any of this can be implied in trade secret disputes and close for the trade secret disputes and, and, and similarly such confusion continues when we are actually trying to figure out what should be the epic of law and epic of law the very first question would be raised that should be which of the piece of the year regulation that we need to apply because Rome one, which applies to contractual obligations, Rome to non contractual obligations, which often have been prevailing view have been that we apply wrong to dispute related with business secrets, but I'm scar only has pointed out to the Court of Justice of European Union case that broke broadly define what is a contractual obligation might actually show different direction so this the first very questions which source should be our source to decide on the epic of the law question that is again that is the first question that one might need to ask also. And in, even if you take the prevailing view of Rome to Rome to Rome to has three relevant part that it gives up even even brings about brings about even more uncertainty, because they're three different possibility to be to use as a basis to decide on ethical law, article four, which is general rule and article six which applies specifically or to unfair competition and article eight, which applies to intellectual property law. And, and which an unfair competition law in article six to one and two, and six one actually provides a rule so so called market oriented rule, and but paragraph two of article six of related with our competition, refer back to article four again, not the place of where the cause so that that, so that, again, I would like to highlight the fact that even using this rule, we still have many places and many applications, many places that we can base tie this ethical law decision on so there are many uncertainties there as well. And this is an illustration examples again, I will skip. So these basically main point I want to say is that there are various rule under the room. And all of this could be I guess, because I want to get to the cases because I advertise this talk about the cases, and it becomes more compromised when we actually look at the case. The seniority cell guard decision from you can quote, and I will compare that to four decisions I advertise with three decisions but I added to two more decisions to this list, because just because it is interesting. And using using their patterns, fact patterns and I will apply that this apply this to paragraph five liabilities so called trading of the invention liability. In this cases, these are these cases all deals with this cross border misappropriation in this very complex graphic representation. The key point is that they are different. I just added a party name. And, and, but in these cases that there are parties who's asserting trade secret, and our position and disclosure and use at the prime primary actor, who are all former employers, former employees, going to their location was one, and where disclosure and use and manufacturing using this. This is appropriate. Information was used trade secret information was useful on other territory, and it was imported into the country of dispute. More detailed table is, is this is this what I wanted to highlight is that in cell guard, which is the case that I want to examine a little bit more in detail here, because it deals with UK high court decision and deals directly with paragraph five liability. The US trade secret directive is related to a trade secret that was asserted by cell guard, which was a US company, US company, and it was aiming to stop a importation of a product that was manufactured in China into UK. So there were three different places in indicated US trade secret holders, location of the seat, location of the seat or where the, where the trade secret was legitimately controlled and importation into UK and manufacturing by in China, in China here. And the litigation or the dispute happened in UK court, and it was related with interim injunction so there are different factors to consider that that allowed the judge not to address certain issues that is important in terms of in terms of paragraph five liability, but the court applied UK law, which implemented EU trade secret directive this was before Brexit, trade secret directive, and based on the fact of in for importation unknown. All the other cases that that is shown on the right hand side in in blue. It deals with US cases. And in all of these deals with, oh, I'm sorry. Again, this happened. In cases where previous employees, former employees conduct was in conduct was implied or conduct was the basis of trade secret misappropriation at the litigation, but it also indicated that it related with the cases where in case of LG electronics. So, you know, let me start from this end. So at the end of the case because this is the landmark decision that expanded the scope of ITC jurisdiction, it was a case of so called US trade secret, because the fact that the information was legitimately controlled and asserted in United States was taken and manufactured in and used in manufacturing in China, and sent back to United States importation. In scene of legend case it was Chinese trade secret or Chinese party, Chinese Hong Kong party, a Chinese party and Chinese Chinese manufacturing facility, trading against each other in a unit in United States through importation into the United States in in this in day one. So it was then, I'm sorry, then case in this case, or in many talks case many sorry many talks case is a two Korean companies, two Korean companies, Korean trade secret, Korean trade secret, because this claim asserting the trade secret many talks was mainly a research and developing in doing the research and developing the trade secret knowledge in Korea and allegedly misappropriated trade secret or not alleged anymore because it has been finalized at ITC that in in misappropriated this information and manufactured the product and imported the product to the United States. In the most recent case, it's slightly different where because manufacturing So it was a Korean company against Korean company in United States ITC court but manufacturing was meant to be done in United States, as well as Hungary. So there were Hungarian manufacturer also was involved in this decision as well. What I would like to highlight is that the place of importation was UK US US US US and the law the court applied and which was in case of UK applied the UK law. There is a rule that it is a place of damage and applying the applicable law of the place law of the place of damage and based on interpretation of trade secret directive and Rome Convention paragraph article six which refer back to article four and applied applied UK which UK law which was a transportation of you know and and of course US law doesn't do this exercise of this exercise and it's just base it's it's tariff that tariff act that it powers ITC to stop importation of this goods and engage in analysis of whether this trade secret information was unknowfully acquired acquired and reviewed our mindfulness of primary actors condom UK court didn't do that didn't do that because and because the problem of paragraph five is there's two type of conducts are in imply that not only importation is prohibited but because it requires that the person who is engaging in that conduct to have known that trade secret was used all knowfully within the meaning of paragraph three. So paragraph three conduct is also implied in paragraph five liability and in import export cases that if a country of exploitation is the place where the trade secret was used then almost always that this paragraph five liability would be applied to the extra territorial conduct that a use of trade secret outside outside the country of importation in the country of exploitation. So this leads to a question that in judging or in understanding paragraph five and applicable for paragraph five liability of trade secret directive article four that do we always need to divide this and apply to a different set of law to importation and another set of law to to the knowledge of our mindfulness to the unknowfulness and this mosaic approach is very much disliked by conflict of law scholars and private intentional scholars and applying different law to this one liability is undesirable, undesirable, but if if you don't do that, then almost always then you have to apply the law in this case European Union law or national law national law transposing your law to this conduct as well to country of exploitation to the conduct of use in the country of exploitation as well as well that is as in the cases of us it is the cases and that is the argument that I that I make in this project and that argument the or I guess glimpse of this argument can be seen in cell guard decision where the court ruled on the basis of information importation alone applied importation alone and characterizing it as unfair competition and applying article six of paragraph two of Rome Convention and applying UK law but because the nature of this dispute was so that it's seeking the interim relief interim injunctions to stop the importation because importation hasn't happened yet and the judge sort of the court sort of avoided the ruling on this knowledge of unlawfulness requirement requirement and and but he posits the judge in in the opinion he was it that maybe it is Chinese law that has to be applied to in this case that when we are discussing that whether there is an unlawful use of trade secret but he doesn't he writes in paragraph six unfortunately it's not necessary at this stage of proceeding to reach a conclusion as to this correct answer to this thing so he avoids answering this question that leads to a my concluding remark on this on the whole talk so interesting as I try to illustrate to you with this talk that this localization domestic foreign maybe a maybe not be possible because we are not talking about foreign right because of the very fact that it regulates an unfair conduct and prohibits certain behavior behavior that you may actually even be able to think that if importation the conduct of the importation into a particular country is what is prohibited and if that is a standalone cause of action for trade secret misappropriation trade secret so called cross border misappropriation cases in trade secret may not even actually cross border trade secret cases but rather only the nationalities of the parties or the the importer exporter has happens to be located but the conduct itself actually is that is territorially dealt with so that way by understanding it this way would avoid the question of troublesome extra territorial application of EU law which Professor Dreyfus and Professor Sidmerman has written in 2017 would make EU law to rule the global rule the world and global global law by applying things that are extra territory only but because of the fact that to find article 5 liability article 4 paragraph 5 liability you still need to decide on you still need this requirement of unknowfulness and knowledge of unknowfulness is required so if you frame it as a standalone cause of action to avoid extra territoriality but it would necessarily mean that if you're not talking about applicable law and cross border or extra territorial application of law but substantially you you might be requiring the court to make a presumption of unknowfulness even I said I think that this is not really a full baked idea yet but that seems to be the case case otherwise it would always be ending up with extra territorial application of EU law and this is quite problematic and the problematic nature is more visible when we compare that to patent law this is article 26 that is would be comparable I think to this type infringing goods liability or trading of infringing goods liability by third party and this is a article 26 of unified patent court agreement which may be going into effect next year by some people who are projecting and there and this is a similar kind of status you can find in UK patent act as well as as finished patent agreement and where similar liabilities provided on the third party but their unknowfulness requirement is not part of the this liability and therefore this consideration do not necessarily related with this extraterritorial territorial application or not do not arise in patent cases also and there also I added here that there are of course other limitations that is related to this clause although this is broad but at the same time it this unknowfulness requires a requirement doesn't exist out of this thing so therefore let's throw some so now this is my final because that was my conclusive remark in a way that there seems to be a cross border misappropriation is not really crossing borders when we looking at the importation as a domestic conduct alone and I can actually add another conclusive remark on this shame, it's such a shame on Brexit because this case said about the senior decision could have been a very interesting case if it was raised and it would have gone to Court of Justice of the European Union to see whether this is actually the case that law justice Arnold in paragraph 67 of the decision that this is a very difficult question and one which may very well have to be answered for the member states of the European Union but a court of justice of the European Union in due course it's a shame because of the fact that you know Britain is not part of you anymore so therefore such a for all cannot be made based on this case and and I'm sure that he would have made that reference reference and we would have seen a very interesting Court of Justice decision on this very concept which is on autonomous autonomous concept in the European Union that has to be understood that way. All right, I think that was the last slide that I've shown. And I think I think everybody who's been listening to this. And I will, I would like to receive any questions and comment. Thank you very much.