EU Trade Secrets Directive
The new EU Trade Secrets Directive that came into force on 5 July 2016 equates the protection of trade secrets with the protection of other forms of intellectual property rights.
Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (EU Trade Secrets Directive) recognises that although businesses commonly use trade secrets to protect their intellectual property and innovative know-how, until now they have not been as well protected by the EU legal framework as other forms of intellectual property rights such as trademarks or patents. Therefore, the Directive offers a single definition of a trade secret that will apply across all Member States, namely that a trade secret is (i) a secret not generally known or readily accessible, which (ii) has commercial value and (iii) has been subject to reasonable steps taken to keep it a secret.
Reasonable steps, which must be taken to keep such trade secrets secret, include concluding a non-disclosure agreement and/or adopting necessary measures to keep the trade secrets undisclosed, such as developing a protocol to establish the legal, human and technical measures to protect the company’s trade secrets from unauthorized disclosure, even if involuntary.
The Directive further details the instances when an acquisition of trade secrets shall be deemed lawful, namely where trade secrets are obtained by an independent discovery or creation, through observation, study, etc.
Member States will have to establish a time limit in which an action can be filed with the competent court, which should not exceed 6 years. The Directive also requests Member States to ensure that during the course of a judicial proceeding, the parties, their lawyers, court officials, witnesses, experts and other participants are not allowed to use or disclose the trade secrets identified as confidential.
EU Member States are required to transpose the necessary provisions into their domestic law by 5 July 2018. Although the Directive shall not be directly applicable, the principles and definitions of this Directive may be viewed as advice to all EU companies on how to better protect their trade secrets. This is important especially with respect to judicial proceedings, as a thorough due diligence by companies will undoubtedly be required in order to obtain a favourable judgment.
