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International scientific-online conference
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LEGISLATION ON PRODUCTION SECRETS (KNOW-HOW) IN
FOREIGN COUNTRIES
Nadirbekova Umida Karamatdin qizi
Master at the University of World Economy and Diplomacy
Raimova Nargiza Doroyevna
Doctor of Sciences in Law, Professor of the Civil Law and International Private
Law Department of the University of World Economy and Diplomacy
https://doi.org/10.5281/zenodo.15629455
Abstract:
The article analyzes the legal protection regime of production
secrets (know-how) in foreign countries, particularly focusing on the
experiences of the European Union, the United States, Japan, and China.
Additionally, issues related to the application of international documents and
legislation of Uzbekistan are examined.
Keywords:
know-how, production secret, intellectual property, legal
protection, TRIPS, European Union, USA, Japan, China, Uzbekistan.
In the modern digital economy, the legal protection of production secrets
(know-how) has become one of the most urgent directions. The advancement of
technologies, the growth of intellectual knowledge in creating competitive
products, and the need of transnational corporations to protect their
innovations have brought about the necessity to strengthen the institution of
production secrets.
A production secret is information that provides its owner with a
commercial advantage and is kept confidential; it often manifests as industrial
technologies, work processes, formulas, production algorithms, or client
databases. The peculiarity of know-how lies in the fact that, unlike other forms
of intellectual property, it is usually not officially registered and is mainly
protected through confidentiality [1, p. 112].
Within the European Union, a significant step on this issue was made in
2016. The EU Directive 2016/943 "On the Protection of Trade Secrets"
stipulates that know-how is entitled to legal protection only if it meets three
main criteria: first, the information must be unknown to the general public;
second, it must have commercial value; third, the owner must have taken
reasonable measures to keep it secret [2, p. 3]. This Directive obliges EU member
states to align their national legislation with these criteria. For example,
Germany enacted the "Gesetz zum Schutz von Geschäftsgeheimnissen" (GSGG) in
2019 based on these requirements.
In the USA, protection of production secrets is carried out on two levels —
federal and state. The main legal frameworks include the 1996 "Economic
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Espionage Act" (EEA) and the 2016 "Defend Trade Secrets Act" (DTSA). The
DTSA allows federal courts to protect production secrets, which must meet the
following criteria: first, it must be confidential information; second, it must
provide economic benefit; third, necessary protective measures must have been
taken [3, p. 378]. According to the law, theft, unauthorized use, or disclosure of
know-how is a serious offense, with both civil and criminal liability envisaged [3,
pp. 381–382].
In Japan, legal protection of production secrets is provided through the
"Unfair Competition Prevention Act" (UCPA). This law assigns the following
characteristics to production secrets: the information must be secret, have
commercial value, and be kept confidential. Amendments in 2003 and 2015
strengthened the law—particularly, criminal liability was enhanced in the Penal
Code, the procedure for recovering damages by companies was simplified, and
sanctions against those violating confidentiality were increased [3, p. 14; 4, p.
22].
In China, the most important legal document for protecting production
secrets is the 2019 updated "Anti-Unfair Competition Law" (AUCL). According to
this law, information is recognized as a production secret only if it meets the
following conditions: it is unknown to the general public and not easily
accessible; it has commercial value; and measures have been taken to keep it
secret [5, p. 17]. Sanctions for violations related to know-how in China are strict:
courts impose fines, award damages, and issue injunctions to prohibit use. Since
2020, the Chinese government has seriously strengthened the infrastructure in
this area, which has increased the effectiveness of practical protection [5, p. 21].
All of this is further consolidated at the international level. Article 39 of the
World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS) is specifically dedicated to the protection of production
secrets. According to TRIPS, each member state must take effective measures
against unauthorized disclosure, acquisition, or use of production secrets [6, p.
512]. This provision serves as an important legal basis for recognizing know-
how as an internationally acknowledged form of intellectual property.
In the Republic of Uzbekistan, the legal protection of production secrets is
carried out through various normative-legal acts. These include the Law "On
Competition" the Law "On Commercial Secrets" the Labor Code, the Civil Code,
and other normative acts containing general rules on protecting know-how
elements. However, Uzbekistan currently lacks a specific, comprehensive law
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regulating production secrets. This situation indicates a lack of a modern
approach in this field.
Foreign experience shows that for the effective functioning of the know-
how institution, the following key conditions are necessary: first, a legislative
framework that clearly defines the criteria for confidentiality of information;
second, protective measures and clearly defined liability in case of breach; third,
effective judicial and arbitration practices for resolving disputes related to
know-how. Considering these factors, the adoption of a dedicated "Law on the
Protection of Production Secrets" in Uzbekistan is both important and urgent.
In conclusion, the protection of production secrets is an integral part of the
modern intellectual property system and serves as a foundation for economic
security, competitiveness, and innovative development. The experiences of the
EU, USA, Japan, and China demonstrate different but effective approaches in this
area. Uzbekistan should deeply study these experiences and strengthen know-
how protection by improving its national legislation.
References:
1.
Aresty, J. Know-how protection: legal framework and strategic
considerations, Journal of Law and Technology, 2018. – pp. 112–118.
2.
Directive (EU) 2016/943 of the European Parliament and of the Council of
8 June 2016. – pp. 3–7.
3.
The Defend Trade Secrets Act of 2016, Pub. L. No. 114-153, 130 Stat. 376
(2016). – pp. 378–382.
4.
Unfair Competition Prevention Act of Japan, amendments 2003, 2015. –
pp. 14, 22.
5.
Anti-Unfair Competition Law of the People's Republic of China, 2019
amendments. – pp. 17–21.
6.
TRIPS Agreement, Article 39, WTO, 1994. – pp. 512–513.
