CAN A TOMATO-based chicken curry dish recipe be a subject of a case of patent infringement, trade secret theft, and passing off?
This is an issue that was touched upon during the mock trial session “Story of a Not-So-Ordinary Chicken Dish” of the 76th Council Meeting of the Asian Patent Attorneys Association (APAA) at the SMX Convention Center and Conrad Hotel in Pasay City, Metro Manila from November 18 to 21, 2024.
Complainant company DESI claimed that respondent SWAD infringed on its patent for a tomato-based chicken curry dish (Tomato Chicken-9), arguing that SWAD’s newly launched Tomato Chicken-7 uses the same ingredients, including San Marzano tomatoes, which was central to DESI’s patented recipe.
DESI contended that SWAD’s use of San Marzano tomatoes constitutes theft of trade secrets, as the identification and procurement of these tomatoes, along with the cooking temperatures, were kept confidential by DESI until the patent was published in 2021.
DESI also claimed that the recipe and process were proprietary secrets, protected under non-disclosure agreements.
DESI stressed that these trade secrets were known only by one employee who was contractually obligated to keep it confidential, but such employee was poached by SWAD, which soon thereafter launched its Tomato Chicken-7 dish.
On the other hand, SWAD asserted that there was no patent infringement since the features of DESI’s invention—such as the selection of San Marzano tomatoes—are natural properties of the tomatoes; while the rest of the recipe were well known by chefs.
SWAD argued that trade secrets cease to exist once a patent application is filed, and DESI had failed to demonstrate that any alleged trade secrets were adequately protected.
SWAD also denied any passing off, stating that “Tomato Chicken 9” is a descriptive name lacking any distinctive secondary meaning, and that the use of numerals in dish names, such as “Chicken 65” and “Tomato Chicken 7,” is common in the industry.
SWAD further contended that employees leaving one company to join a competitor is a standard business practice and does not constitute dishonest conduct.
SWAD maintained that the naming and preparation of Tomato Chicken 7 were developed independently of DESI’s recipe.
In Air Philippines Corp vs. Pennswell Inc. (G.R. No. 172835 December 13, 2007), the Supreme Court defined a trade secret as a plan or process, tool, mechanism or compound known only to its owner and those of his employees to whom it is necessary to confide it. The definition also extends to a secret formula or process not patented, but known only to certain individuals using it in compounding some article of trade having a commercial value.
A trade secret may consist of any formula, pattern, device, or compilation of information that:
(1) is used in one’s business; and
(2) gives the employer an opportunity to obtain an advantage over competitors who do not possess the information.
Generally, a trade secret is a process or device intended for continuous use in the operation of the business, for example, a machine or formula, but can be a price list or catalogue or specialized customer list.
The Court stressed that trade secrets constitute proprietary rights. The inventor, discoverer, or possessor of a trade secret or similar innovation has rights therein that may be treated as property, and ordinarily an injunction will be granted to prevent the disclosure of the trade secret by one who obtained the information “in confidence” or through a “confidential relationship.”
The Supreme Court cited the following factors to determine if an information is a trade secret:
(1) The extent to which the information is known outside of the employer’s business;
(2) The extent to which the information is known by employees and others involved in the business;
(3) The extent of measures taken by the employer to guard the secrecy of the information;
(4) The value of the information to the employer and to competitors;
(5) The amount of effort or money expended by the company in developing the information; and
(6) The extent to which the information could be easily or readily obtained through an independent source.
The Supreme Court underscored that trade secrets should receive greater protection from discovery, because they derive economic value from being generally unknown and not readily ascertainable by the public.
The protection of industrial property encourages investments in new ideas and inventions and stimulates creative efforts for the satisfaction of human needs.
It speeds up transfer of technology and industrialization, and thereby brings about social and economic progress. The protection of industrial secrets is inextricably linked to the advancement of our economy and fosters healthy competition in trade.
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Atty. Dennis R. Gorecho is the Junior Partner of the Sapalo Velez Bundang Bulilan Law Offices. For comments, e-mail info@sapalovelez.com, or call 09088665786./PN
