Apple is suing a former employee who left for Chinese smartphone maker Oppo on the claim that he stole ‘Apple’s trade secrets relating to Apple Watch and to disclose them to his new employers.’ Apple claims that it’s former sensor system architect Chen Shi accessed confidential documents on Apple’s health sensing technologies and disclosed them to Oppo before leaving Apple in June so that his new employers could develop a competing wearable device.
Apple also claims that the former employer attended dozens of one-on-one meetings with Apple Watch technical team members to learn about their ongoing research and concealed his impending employment with apple’s direct competitor Oppo. Apple says just three days before his departure, Shi ‘downloaded 63 documents from a protected Box folder. He then transferred them to a USB drive one day before his departure.
Shi now leads a team working on sensing technology at Oppo. In his resignation letter to the company, Shi claimed that he was leaving ‘due to personal and family reasons’
Trade secrets are intellectual property rights (IPRs) that refers to any practice or process of a company that is generally not known outside of the company. In general, any confidential business information which provides an enterprise a competitive edge and is unknown to others may be protected as a trade secret. Information considered a trade secret gives the company a competitive advantage over its competitors and is often a product of internal research and development.
Trade secrets under the WTO are protected primarily through the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) which is one of the key agreements of the World Trade Organization (WTO).
Trade secrets encompass both technical information, such as information concerning manufacturing processes, pharmaceutical test data, designs and drawings of computer programs, pattern, design, formula, recipe, method, financial and commercial information, such as distribution methods, list of suppliers and clients, and advertising strategies.
A trade secret owner, however, cannot stop others from using the same technical or commercial information, if they acquired or developed such information independently by themselves through their own R&D, reverse engineering or marketing analysis, etc. For example, if a specific process of producing Compound X has been protected by a trade secret, someone else can also obtain a patent or a utility model on the same invention, if the inventor arrived at that invention independently.
Non-disclosure agreement (NDA): employees and business partners should sign a non-disclosure agreement that prevent them from disclosing a company’s confidential information.
Non-compete agreement (NCA): employers should ask employees, contractors and consultants to sign a non-compete agreement to prevent them from entering in competition when their employment/service agreement ends.
Robust IT security infrastructure
Controlling the accessibility of important documents
Coca-Cola India (Beverages) : Though Coca-Cola is a US brand, its secret formula (including for Thums Up, Limca, etc. in India) is treated as a classic trade secret. The formula is not patented, hence kept confidential forever.
Asian Paints (Manufacturing/Operations) : Maintains proprietary algorithms for supply chain optimization and paint mixing technologies. Their operational efficiency gives them a market edge, protected as trade secrets.
Tata Consultancy Services (TCS) : TCS holds client-specific algorithms, software architecture, and internal process codes as trade secrets. These are not publicly disclosed but are critical for project delivery and competitive advantage.
Monsanto India (Now Bayer) – Bt Cotton Technology : Proprietary information regarding genetically modified seeds and farming algorithms. Though patents apply to some parts, the formulae and processes are kept as trade secrets for sustained advantage.
Haldiram's or MTR Foods (Food Industry) : Secret recipes, spice blends, and preparation techniques are not patented but are confidentially held and passed within families or top management.
Pharmaceutical Formulations (e.g. Dr. Reddy’s, Sun Pharma) : Manufacturing processes, cost-saving synthesis methods, and proprietary drug delivery systems are often held as trade secrets — separate from patented molecules.
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