Trade secrecy, knowledge sharing, and cooperation: the case of developing and manufacturing Covid-19 treatments

This chapter unravels a seeming contradiction: The contention that legal protections for confidential information - trade secrets - can enable firms to share knowledge more freely and to collaborate more extensively with third parties. It utilizes original interviews and real-world case evidence from the biopharmaceutical industry’s response to the Covid-19 pandemic to resolve this paradox and expand conceptual understanding of trade secrecy. Whereas trade secrecy may intuitively seem to suppress information-sharing, this chapter explains the mechanisms through which it can boost openness and cooperation. By providing legal assurances that make it safer to reveal proprietary knowledge, trade secrecy allows for greater and more efficient division of labour. The chapter first grounds analysis in scholarship on trade secrecy law and surveys confirming that most companies greatly depend on trade secrets. After reviewing contradictory perceptions about secrecy’s effects, it presents evidence from interviews with IP counsel and other experts inside leading biopharma companies about how trade secrecy enabled otherwise-impossible collaborations. Examples reveal extensive voluntary transfers of manufacturing know-how during the Covid-19 pandemic among rivals that required trade secret assurances.