Part III of the regulations provides that the tobacco industry must provide the following information about their products:
- List of ingredients in tobacco products and tobacco product components;
- Reasons for including the ingredients;
- All the toxicological data available to the manufacturer about the ingredients of the tobacco products and their effects on health and information on the characteristics of the leaves i.e. their type, percentage, percentage when expanded and changes made about tobacco product ingredients.
These requirements are a replica 2009 US law that granted the Food and Drug Administration (FDA) powers to direct tobacco companies to disclose ingredients in new products and changes to existing products. They also adhere to article 9 and 10 of the WHO Framework Convention on Tobacco Control (FCTC).
Whether the information that tobacco companies want to protect qualifies to be trade secrets is disputable. The law of confidence which is rooted in equity and legislated under article 39 of the Agreement on Trade- Related Aspects of Intellectual Property Rights (TRIPS) to which Kenya is a signatory to protects trade secrets. Article 39 of the Agreement stipulates that the following requirements must be met for information to be regarded as trade secrets: secrecy, commercial value and reasonable efforts to maintain secrecy.
The information held must be of a secretive nature though not absolutely secret. Employees, business partners and other persons can know the particulars, provided they keep them secret. Besides, ordinary and mundane information can be the subject of confidence so long as the information is private to the compiler. This was illustrated in Coco v AN Clark (Engineers) Ltd  where the Court found that information that is common knowledge to a group of persons (in this case tobacco manufacturers) is part of the public domain and is not confidential. Therefore information regarding ingredients must be confidential to qualify as a trade secret.
Secondly, the information must have commercial value i.e. there must be some utility obtained from the information being secret. The manufacturer must be able to use it to acquire a business advantage over other manufacturer(s) in the same industry. Therefore, the information must only be known to the manufacturer to have commercial value. Disputably, players in the tobacco industry could argue that the information they guard has commercial value to them as it is what gives one company an edge over a competitor that uses different ingredients and manufacturing processes
Lastly, the owners of the secrets must carry out steps to ensure that the information is well secured. According to WIPO, some of the reasonable steps that can be taken to secure trade secrets include: non-disclosure agreements, training and capacity building with employees, instituting an information protection team, having a trade secret SWAT team, establishing due diligence and continuous third-party management procedures among others.
Kenya, as a signatory to TRIPS, is obligated to protect trade secrets. These regulations do not however protect trade secrets and business ‘know-how’ once it is revealed; meaning once revealed it loses its secrecy. This leaves trade secrets and business ‘know-how’, such as the list of ingredients and percentage of leaves expanded, vulnerable to appropriation.
In taking the role of devil’s advocate, it is worth considering whether the information that the tobacco industry is required to reveal under Part III really falls within the scope of trade secrets. Let us go back in history to understand the situation as it was that caused the emergence of such requirements. In 1998, 35 million pages of what was considered confidential information were revealed as a result of the Minnesota’s Tobacco Trial in the US. This information was on the harmful ingredients that tobacco companies used in the products. In what was considered the Master Settlement Agreement, the U.S. agreed not to sue the corporations in exchange of the corporations revealing all documents considered to be confidential to the public. It is important to note that one of the companies involved in the Supreme Court application to throw out the regulations was implicated in this law suit for failing to reveal to consumers harmful ingredients contained in their tobacco products.
Moreover, research carried out between 1937 and 2001 of tobacco companies, some of which operate in Kenya, revealed that tobacco ingredients are not secret rather the companies simply reverse engineer their competitor’s brands to create their own. This report argues that since the reverse engineering process is done routinely, it does not meet the threshold of secrecy for information to be a trade secret. The report implicates some multinationals that operate in Kenya. If this is anything to go by, then it negates the fact that the information in question has commercial value and is secret.
It is thus important to strike a balance between consumer protection measures and the protection of corporations’ intellectual property. Overzealous consumer protection regulations result in laws that infringe on corporations right to privacy and violate their intellectual property rights, to the detriment of their revenue and the country’s economy as a whole. Since the appeal was dismissed at the Supreme Court, it will be interesting to see whether the manufacturers will abide by the regulations.
Originally posted at CIPIT Blog.