Adapting the EU Directive on Trade Secrets ‘Protection’ into National Law
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In our knowledge economy, competitive edge arises from holding valuable proprietary information: Conventional intellectual property rights cannot adequately protect certain commercial or technical information —technical know-how, business plans, a corporate strategy, pricing information — despite the commercial value of this information to the business. These assets can easily be copied, transferred and disseminated digitally. Manufacturers base their factories overseas protecting trade secrets in europe reduce costs; international collaborative arrangements are no longer the preserve of multinationals; employees change jobs frequently and are more mobile.
It is small wonder that disputes surrounding proprietary information are occurring more often. The proposed EU Protecting trade secrets in europe Secrets Directive — likely to come into force in — will not harmonise trade secrets law.
The good news, however, is that it will set up a minimum standard for trade secret protection across the EU, introducing more certainty than currently exists. This will probably depend on a number of factors the nature of the business and its commercial landscape, for instance rather than on a particular figure or range of figures in terms of value or a percentage. Generally, the more control there has been over access to and use of the information — labelling documents, limiting distribution, restricting access physically or technically, strict contractual provisions protecting trade secrets in europe monitoring thereof — the higher the likelihood of that information being protected by law.
There is always going to be a trade-off for companies: If the information is valuable, however, companies are likely to find the inconvenience worthwhile. There is no definition of a trade secret in the UK, the law relating to confidential information having developed through case law. As a result, there is much room for debate. In practice, if it can be shown that the information brings commercial or technical advantage to the company, and that the company has taken commensurate steps to protect it, the court will more readily recognize it as confidential information liable for protection.
In the UK, therefore, we are unlikely to see much change as a result of the definition in the Directive. This clearly adds to the benefit of having a Non-Disclosure Agreement or similar in place, as to breach it is likely to be contrary protecting trade secrets in europe honest commercial practices. It is assumed that the law to be applied would be either the one chosen by the parties if they are in a contractual relationship or the law of the place in which the act in question occurred, or both.
This could and often would involve jurisdictions outside the EU. This includes acquisition through independent discovery and creation and the disassembly or test of a product or object made available to the public. There is also a catch-all provision for acts which conform to honest commercial practices. It is silent, however, on the level of control employers can impose on employees, and acceptable employment contract provisions.
As most trade secret cases relate to alleged misuse by protecting trade secrets in europe employees, this omission will add a layer of complication in litigation. This could be a powerful provision for innovative manufacturers of goods.
A claimant must show that confidential information was imparted in circumstances importing an obligation of confidence: As the Supreme Court decision protecting trade secrets in europe Vestergaard v Bestnet  UKSC 31 demonstrated, breach of confidence is difficult to establish against a party without knowledge of the protecting trade secrets in europe secret itself.
There is no point in providing for the protection of trade secrets without a suitable legal procedure and the Directive therefore provides for the preservation of confidentiality during legal proceedings — article 8.
This is clearly paramount, as otherwise litigating for breach of confidence could defeat the purpose where information has been leaked to a limited number of people. The Directive does not give complete comfort. We will need to see what changes will be made in jurisdictions which are not used to hearing proceedings in secret, what kind of threshold they will set and logistically, how proceedings will be run.
The courts will be able to grant injunctions of appropriate duration, restraining use and disclosure of confidential information and the dealing of infringing goods. We do not yet know whether this type of injunction will be Europe-wide, suffice it to say that the courts are more likely to order a Europe-wide injunction where the defendant is domiciled in the jurisdiction of the proceedings, and where the defendant has a Europewide infringing business.
Other remedies include damages and accounts of profits. As an option, Member States can choose to restrict liability for employees where they acted without intent. Provisional measures for an protecting trade secrets in europe against use of the information and infringing goods, seizure and delivery are all provided for, although the Directive is silent on other interim measures such as search orders, freezing orders and pre-action disclosure.
Since it does, however, provide for a minimum standard, Member States should be able to continue making these orders as well, if they consider it appropriate.
It will be up to Member States to take steps to comply with its provisions, although the law in the UK already provides adequate protection so is unlikely to change a great deal.
In addition, some provisions of the proposed Directive will be subject to interpretation by the CJEU. It is going to take some time, therefore, before we can know how all these factors will play out. Until then, Member States are likely to continue to work to different standards, with some affording little or no protection, but we may eventually see courts of different Member States considering case law of other jurisdictions, resulting in a more harmonised system.
Keeping your trade secrets a secret in Europe Publication March Download the journal. The Directive introduces a definition of a trade secret — article 2 1.
Information will be considered a trade secret if it: UK perspective There is no definition of a trade secret in the UK, the law relating to confidential information having developed through case law. UK perspective The position is similar protecting trade secrets in europe the UK where primary unlawful acts are concerned.
Not the default position The Directive does not give complete comfort. Subscribe and stay up to date with the latest legal news, information and events