Proprietary Claims

A proprietary claim is a formal, legal assertion made by an entity to a regulatory body or third party, stating that certain information qualifies as a trade secret and should be exempt from public disclosure mandates. This concept is rooted in trade secret laws, such as the Uniform Trade Secrets Act (UTSA) in the U.S. and Taiwan's Trade Secrets Act. To be valid, the information must typically meet three criteria: it is not generally known (secrecy), it confers economic value, and the holder has taken reasonable measures to keep it secret. In the context of risk management and standards like ISO/IEC 27001:2022 (Information Security), making a proprietary claim is a critical control measure. It allows a company to comply with disclosure laws (e.g., environmental or safety regulations requiring chemical disclosure) while protecting its most valuable intellectual assets, unlike patents, which require public disclosure in exchange for a limited monopoly.

Applying proprietary claims in enterprise risk management involves a systematic, three-step process. First, **Identify and Classify Trade Secrets**: The enterprise must conduct a thorough inventory of its information assets to identify potential trade secrets, such as formulas, processes, or client lists, and classify them based on their value and risk of exposure. Second, **Implement Reasonable Protection Measures**: Aligned with ISO/IEC 27001 controls, the company must establish and document robust security measures. This includes physical security, access controls, employee training, and non-disclosure agreements (NDAs). These documented actions serve as crucial evidence. Third, **Submit a Substantiated Claim**: When faced with a disclosure requirement, the company submits a formal claim to the relevant authority (e.g., the EPA in the U.S.). This submission must include evidence of the information's value and the protective measures taken. A global chemical company successfully used this process to protect a key additive's formula, maintaining 100% regulatory compliance while preventing an estimated $50 million loss in competitive advantage.

Taiwan enterprises, particularly SMEs, face several key challenges. First, **Lack of Legal Expertise**: Many are unfamiliar with the specific substantiation requirements of Taiwan's Trade Secrets Act and the differing standards of various regulatory bodies, leading to rejected claims. Second, **Inadequate Documentation of Protective Measures**: Companies often fail to systematically document their "reasonable measures," such as access logs or confidentiality training, making it difficult to prove their case in a legal or regulatory setting. Third, **Supply Chain Pressure**: As key players in global supply chains, they face pressure from international clients (e.g., in the EU or US) to disclose full product compositions, creating a direct conflict with their need for secrecy. To overcome this, enterprises should prioritize creating a regulatory compliance map, implementing a formal management system like ISO/IEC 27001 to standardize documentation, and using robust NDAs or third-party escrow services when dealing with international partners.

Winners Consulting specializes in proprietary claims for Taiwan enterprises, delivering compliant management systems within 90 days. Free consultation: https://winners.com.tw/contact