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Abstract

The present article considers four aspects in which the trade secret method is less efficient than the patents method: litigation costs, transaction costs, financing costs, and employment costs. The main part of the article is devoted to the proposal of establishing a particular type of trade secrets registry, with the intention that it will reduce the above-mentioned costs and will improve the efficiency of the trade secret method. I propose a structure for the registration of trade secrets that is likely to solve most of the problems left unresolved by the escrow companies and the Indonesian legislation. A trade secret registry may seem to be a contradiction in terms, because the purpose of a registry is to make public the information registered with it, whereas trade secrets must be kept confidential. But the proposed registry integrates these two principles, so that a part of it remains confidential and another part is open to the public. As part of the registry, trade secrets would be deposited confidentially through coded communication, including dating of the deposit. But, the identity of the holders of the rights with respect to these secrets (including those possessing secondary rights, such as licensees and holders of a mortgage) and the identity of those bound by confidentiality regarding the secrets deposited (such as employees of the owner of the trade secret) will be public information. The proposed registry would be handled by the registrar of trade secrets, a quasi-judicial figure empowered to resolve judicial disputes when necessary.

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