France: Protection Of Trade Secrets In France: Entry Into Force Of Welcomed Procedural Clarifications

Last Updated: 19 December 2018
Article by Marie Danis, Claire Moleon and Thierry Lautier

French Decree No. 2018-1126 dated 11 December 20181 (the "Decree") on protection of trade secrets implementing French Act No. 2018-670 of 30 July 20182 (the "Act") was published on 13 December 2018 in the "Journal Officiel de la République française". Almost all of its provisions will enter into force the day following its publication.

The Decree, eagerly awaited by practitioners, introduces a new section within the French Commercial Code devoted to protection of trade secrets.

The main contributions of the Decree are:

  • a clarification of the content of provisional and protective measures that may be ordered ex parte or following summary proceedings in case of infringement of trade secrets,
  • a definition of the procedural rules related to protective measures of trade secrets that apply before civil and commercial courts, and
  • incidentally, a harmonisation of the terminology used within various French codes.

Enhanced provisional and protective measures to protect trade secrets

The new Article R. 152-1 of the French Commercial Code clarifies the rules for granting provisional and protective measures to prevent any imminent infringement or to put a stop to any ongoing infringement of trade secrets.

These measures, which should be proportionate3, may include, inter alia, (i) a prohibition of any use or disclosure of trade secrets, and (ii) a prohibition of any manufacturing, offering for sale, putting on the market or use of products that are suspected of resulting from a significant infringement of trade secrets.

The Decree also allows the possibility of ordering seizure, or placement in a third-party escrow, of such products so as to prevent their entry or movement on the market – which was not provided for by the Act.

Introduction of a "security for costs" type guarantee mechanism

The new Article R. 152-1 II and III innovatively introduces a guarantee mechanism that was not explicitly provided for by the Act.

The judge will thus be able to order the provision of financial guarantees:

  • to the plaintiff who was granted provisional or protective measures, if the alleged infringement of the secret is subsequently found to be baseless, in order to compensate the defendant or any third party harmed by the measures, and
  • to the defendant, as a condition for allowing it to continue the alleged infringement (and to ensure possible subsequent compensation to the secret holder).

This guarantee mechanism will probably enable the judge to ensure a proportionality balance between, on the one hand, the manifest nature of the infringement of the plaintiff's trade secrets and, on the other hand, the harmful nature of the provisional and protective measures for the defendant.

These guarantees will be provided under the conditions set by Articles 517 et seq. of the French Civil Procedure Code relating to provisional enforcement.

In order to limit the application in time of the provisional and protective measures ordered, Article R. 152-1 V conventionally provides that such measures that are granted to protect trade secrets will expire if the plaintiff fails to bring the matter before the court within 20 working days (or 31 calendar days if the latter period is longer) from the date of the order (whether it is granted ex parte or following summary proceedings).

"Provisional" placement in escrow of the documents obtained following in futurum investigations or during infringement seizures

In the orders granted on a ex parte basis, the courts would increasingly use the escrow mechanism to protect the confidentiality of seized documents, be it for an in futurum investigation (on the basis of Article 145 of the Civil Procedure Code) or for an infringement seizure ("saisie-contrefaçon") (for instance, in patent matters, on the basis of Article L. 615-5 of the Intellectual Property Code).

To some extent, the Decree gives the force of law to what was previously only a practice in some courts, by introducing a "provisional" escrow.

The new article R 153-1 thus now provides that the judge may automatically order the escrow of the requested documents in order to ensure the protection of trade secrets. However, this escrow is only provisional: if no request for amendment or withdrawal of the order is lodged within one month from its notification, the escrow is removed and the documents may be sent to the plaintiff.

This new mechanism makes it therefore possible to protect the party whose documents are seized, at least temporarily, while allowing the plaintiff to obtain these documents more easily in the absence of any challenge within one month – in case of challenge, the escrow will be confirmed and the parties will have to discuss the opportunity and terms for removing it.

This new mechanism applies both to in futurum investigations (new Article R 153-1 of the Commercial Code) and to infringement seizures ("saisies-contrefaçon") (the corresponding articles of the Intellectual Property Code refer to the new Article R 153-1 of the Commercial Code).

New procedural rules governing filing or production of documents

The new Articles R. 153-2 et seq. clarify the procedural rules that aim to protect trade secrets under Article L. 153-1 of the Commercial Code when filing or production of documents is requested in thescope of a civil or commercial litigation.

These rules first determine the role of the judge:

  • the party or the third party invoking trade secrets shall provide the judge, within a time limit set by the judge, with (i) the full confidential version of the document, (ii) a non-confidential version or a summary thereof, and (iii) a memorandum explaining the reasons of its confidentiality (Article R. 153-3),
  • the judge can rule on the confidentiality of a given document without holding a hearing (Article R. 153-4), and
  • the judge may decide that filing of such document can be refused, order its filing in its entirety but with limited access, or order the filing of a non-confidential version or a summary of the document, depending on what he considers "necessary for the resolution of the dispute" (articles R. 153-5 to 153-7).

These rules also provide details on the judge's decision:

  • the decision regarding the filing of the document may be challenged (before any proceedings on the merits, Article R. 153-8) or appealed (in the scope of proceedings on the merits, Article 153-9 II and III), within 15 days,
  • the provisional enforcement of the decision cannot be ordered, which should in practice encourage the secret holder to appeal the decision, and
  • as regards the party who requested the filing or production of the litigious document in the scope of proceedings on the merits, if the decision dismisses such request, the party may only appeal this decision along with the future decision on the merits (Article R. 153-9 I).

Confidentiality of the judgment

Lastly, the new Article R. 153-10 provides:

  • that, at the request of a party, an excerpt of the judgment containing only its operative part, bearing the enforcement formula, may be delivered to such party for the purpose of its forced enforcement, and
  • that a non-confidential version of the judgment, in which information covered by trade secrets are redacted, may be provided to third parties and made available to the public in electronic form.

This system should ensure the confidentiality of documents recognized as covered by trade secrets, even after the proceedings.

It appears to us that these important procedural changes serve the intended purpose of protecting trade secrets while striking at the same time a good balance between the interests of the parties.

Footnotes

1 French Act No. 2018-670 of 30 July 2018 on protection of trade secrets: https://www.legifrance.gouv.fr/affichLoiPubliee.do?idDocument=JORFDOLE000036749877&type=general&legislature=15.

2 French Decree No. 2018-1126 of 11 December 2018 on protection of trade secrets: https://www.legifrance.gouv.fr/eli/decret/2018/12/11/JUSC1821661D/jo/texte.

3 Article L. 152-3 introduced by the Act, then Article R. 152-1 introduced by the Decree.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions