The reverse engineering of the mRNA sequence for the Moderna COVID-19 vaccine … a good example  

Recently, the reverse engineering of trade secrets made headline news when it became known that Stanford scientists had published a previously unknown mRNA sequence for the Moderna COVID-19 vaccine, reverse engineered from droplets left in used vials.

This concrete example clearly shows how important it is that you have a sound innovation protection strategy in place for your trade secrets, including assessing the possibility of reverse engineering and establishing the necessary measures to prevent this. It also raises the interesting question of whether such reverse engineering would be allowed under the EU Trade Secrets Directive (the “TS Directive”) and how you can use EU trade secrets legislation to help protect your innovation from reverse engineering.

Unlike patent law, the TS Directive does not grant exclusive rights to the holder of a trade secret, but rather the right to oppose any unlawful acquisition, use, or disclosure of that trade secret.

According to the TS Directive, the “acquisition” (i.e., obtaining) of a trade secret by reverse engineering (i.e., through the observation, study, disassembly or testing) of a product or object is considered to be “lawful” if (see Article 3.1(b) of the TS Directive):

• the product or object has been made available to the public; or
• the product or object is lawfully in the possession of the acquirer of the information, and that person is free of any legal obligation to limit the acquisition of the trade secret.

This implies that once the product has been made available to the public with the consent of the trade secret holder, that holder can prevent reverse engineering only by including a prohibition in the contracts it enters into with other parties. If such a prohibition is in place, and the co-contracting party breaches its contractual obligation not to reverse engineer the product, that party will not only be held liable for damages under contract law, but the act will also amount to unlawful acquisition and/or use of a trade secret (see Article 4 of the TS Directive). This would then make certain legal remedies under the TS Directive available to the trade secret holder, such as provisional and precautionary measures, injunctions and corrective measures, and publication of the judgement establishing the misappropriation (see Article 10 ff. of the TS Directive).

Ideally, however, the trade secret holder will want to ensure not only that the contracting party is prohibited from reverse engineering, but that in turn, the contracting party will include a similar prohibition on reverse engineering in any agreements it may conclude with any third party, and that this obligation to respect the trade secret will continue to the level of the individual end-user (i.e., by contractual chain or perpetual stipulation). This protection would then afford the trade secret holder similar remedies vis-à-vis these third parties as it enjoys in relation to its direct contracting parties.

In the absence of contractual provisions such as these, the trade secret holder can oppose reverse engineering only in so far as it can establish that:

• the reverse engineering is, in the circumstances, contrary to honest commercial practices (Cons. 17 and Article 4.2(b) of the TS Directive);
• for third parties (i.e., any party not having a direct contractual relationship with the trade secret holder), that the third party carrying out the reverse engineering knew, or ought to have known, at the time of the acquisition, use, or disclosure, that the trade secret had been obtained directly or indirectly from a person who was using or disclosing the trade secret unlawfully, i.e., because that person had (i) acquired the trade secret unlawfully; (ii) been in breach of a confidentiality agreement or any other duty not to disclose the trade secret; or (iii) been in breach of a contractual or any other duty to limit the use of the trade secret (see Article 4.4 of the TS Directive).

 Important take-aways concerning trade secrets and reverse engineering

When assessing the real risk that your trade secret might be reverse engineered, you should ideally:

• Bear in mind that the easier a product can be disassembled or analyzed, the higher the risk of reverse engineering once the product is made available to the public.
• Try to mitigate the risk of reverse engineering by providing for appropriate confidentiality obligations in agreements with your contracting parties (such as licensees, distributors, etc.), including a prohibition on reverse engineering.
• Try to limit as far as possible the number of contractual relationships you have that involve the trade secret.
• Ensure that there is a prohibition on reverse engineering not only in your direct relationships with contracting parties, but also that your contracting parties are obliged to include a similar prohibition in their contracts with third parties. This obligation should continue up to the level of the individual end-user (i.e., by way of a contractual chain or perpetual stipulation).
• Put a system in place that keeps track of your various contractual relationships that involve the trade secret and oblige your contracting parties to have a similar system in place.
• Remember that reverse engineering by a non-contracting party could be considered unlawful if that party knew or ought in the circumstances to have known that the trade secret had been obtained directly or indirectly from a person who was using or disclosing the trade secret unlawfully.
• Bear in mind that in the absence of a contractual obligation prohibiting reverse engineering, and depending on whether or the extent to which it is allowed under national law, reverse engineering could be sanctioned by the laws on unfair competition.

Some of these measures can be easily implemented. Others, such as setting up contractual obligations not to reverse engineer, will need to be negotiated, and will depend on your co-contracting party’s willingness to cooperate as well as on its power to impose this further down the chain.

Taking these measures should also help you more generally if you experience misappropriation of a trade secret, in so far as they demonstrate that the information in question fulfils one of the three conditions that makes it a trade secret: namely, that the information has been subject to “reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret” (Article 2.1(c) of theTS Directive).