UK: Is It Secret? Is It Safe? The Trade Secrets Directive To Come Into Force On 5 July 2016

Last Updated: 1 July 2016
Article by Rachel Fetches

On 15 June 2016, EU Directive (2016/943) "On the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure" setting out rules for the protection of trade secrets and confidential information of EU companies was published in the EU's Official Journal.  This means that the Directive will enter into force on 5 July 2016 (the 20th day following that of its publication in the Official Journal).  EU Member States have to transpose the Directive into their national law by 9 June 2018, which means that there will be harmonised protection for trade secrets across the EU.

The Directive is intended to have a deterrent effect against the unlawful acquisition, use or disclosure of trade secrets and provide consistent protection for trade secrets across the EU.  This will give businesses trading in the EU better cross-border protection of their trade secrets throughout the supply chain.  The Directive also builds in safeguards to avoid undermining fundamental rights and freedoms or impacting on the public interest, including public safety, consumer protection, public health, environmental protection and mobility of workers. 


The concept of EU-wide measures against the unlawful acquisition, use and disclosure of trade secrets, was first proposed in November 2013.  The EU Commission then set out a draft directive that aimed to align existing laws against the misappropriation of trade secrets across the EU.  The overarching goal was to put companies, inventors, researchers and creators on equal footing throughout the EU so that there was a common, clear and balanced legal framework that discouraged unfair competition and facilitated collaborative innovation and the sharing of valuable know-how.  Following comments, the draft was heavily revised and received approval after the inclusion of safeguards for the media, workers and whistle-blowers.  

What is a trade secret?

The Directive provides a definition for "trade secret":

Article 2(1) 'trade secret' means information which meets all of the following requirements:

(a) it is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

(b) it has commercial value because it is secret;

(c) it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

The Directive also makes it clear that this definition excludes information that is known and accessible to persons normally dealing with the kind of information in question.  It also excludes trivial information and the experience and skills gained by employees in the normal course of their employment. 

Other key definitions in the Directive include:

 'trade secret holder' - any natural or legal person lawfully controlling a trade secret;

 'infringer' ­-  any natural or legal person who has unlawfully acquired, used or disclosed a trade secret;

 'infringing goods' - goods, the design, characteristics, functioning, production process or marketing of which significantly benefits from trade secrets unlawfully acquired, used or disclosed.

Having these definitions that will be uniform throughout the EU, should make it easier for companies to identify, protect and enforce their rights in trade secrets.

Lawful and unlawful acts

Article 3 of the Directive sets out the parameters of lawful acquisition, use and disclosure of trade secrets, which includes independent discovery or creation, observations and testing of products lawfully in the position of the acquirer of the information and practices in conformity with honest commercial practices. 

Article 4 requires Member States to ensure that trade secret holders have the ability to seek protection and obtain suitable remedies and compensation for the unlawful acquisition, use or disclosure of their trade secret.  Unlawful acquisition includes unauthorised access to, appropriation of or copying of information containing the trade secret or from which it can be deduced, as well as acquisition by practices contrary to honest commercial practices (Article 4(2)).  Once the trade secret holder has established that the alleged infringer's acquisition was unlawful then the use or disclosure of the trade secret is also unlawful.  In addition, a breach of a confidence, contractual requirement or duty to keep information confidential would be unlawful. 

For secondary infringers, then the acquisition, use or disclosure of a trade secret will be unlawful if they knew or ought reasonably to have known that the trade secret had been obtained by another party who was themselves using or disclosing the trade secret unlawfully.   

The production, offering, placing on the market, importation, export or storage of infringing goods shall also be considered an unlawful use if the party carrying out the activities knew or ought reasonably to have known that the trade secret was used unlawfully.

Safeguards in the Directive

After consultation on the draft Directive, there are some key protections and assurances that have been included to protect the press, workers and whistle-blowers (Article 5).  These include:

  • Protection of freedom of expression and freedom of the media

The measures preventing the disclosure of information to protect the confidentiality of trade secrets shall not interfere with investigative journalism, which can be exercised without any new limitations, including the protection of journalistic sources. 

  • Mobility of employees

In an increasingly mobile work environment, the Directive does not impose any additional restrictions on workers in their employment contracts and national law will continue to apply.  Employees can use the experience and skills honestly acquired in the normal course of their employment. 

  • Whistle-blowers

A person acting in good faith who reveals a trade secret for the purpose of protecting the general public interest, i.e., "whistle-blowers", will enjoy protection.  National Courts will judge whether the disclosure of a commercial secret was necessary to reveal misconduct, wrongdoing or illegal activity. 

Actions for misappropriation and misuse of trade secrets

All EU Member States will have to provide trade secret holders with measures, procedures and remedies necessary to ensure they can prevent and obtain suitable civil remedies for the unlawful acquisition, use and disclosure of trade secrets. 

The claimant must demonstrate that a trade secret exists, that the claimant falls within the definition of being the trade secret holder and that the trade secret has been (or will be) unlawfully acquired, used or disclosed.  The Court must also assess the value of the features of the trade secret, as well as the measures taken to protect it.  The Court must also consider the conduct of the alleged infringer and the impact and likely harm to the trade secret holder of a use or disclosure without consent and balance each party's legitimate interests.  Finally the Court must also consider any third party interests, the public interest and the safeguard of fundamental rights.  

Member States will have to ensure that there are procedures for the fair, proportionate and efficient dealing of such actions.  The requirement for timely measures, recognises that with actions for breaches of confidence often one of the most important remedies is an injunction.  The kinds of provisional measures that must be available are set out in Article 10 and include injunctions and seizures of suspected infringing goods.  The applicant will have to provide appropriate cross-undertaking and the defendant can apply to revoke the Order or cease to have effect if they can either show that the information isn't secret or if the trade secret holder doesn't then institute legal proceedings within a reasonable period of time (whichever is longer of 20 working days or 31 calendar days).  If the Court decides to allow the alleged unlawful use to continue then the alleged infringer will have to provide an appropriate guarantee until the matter is resolved.   

Importantly, Article 9 of the Directive also requires all Member States ensure that the trade secret itself will remain confidential during the course of and after the legal proceedings, including in any Judgment.  This is important because, unlike the English Courts, there are some jurisdictions where putting in place confidentiality regimes is difficult and hearings in camera are rare.

Successful parties will have a number of remedies available, including a final injunction, delivery up or destruction of infringing goods, damages and publication of the Judgment.  

Next steps

Companies wishing to take advantage of the change of law should consider regular audits to identify what information they hold constitutes a trade secret under the Directive and what measures are in place to ensure that they are kept secret. 

It is important that everyone in the business treats information of this nature with respect and understands the importance of protecting trade secrets.  This includes ensuring that strong confidentiality agreements are used routinely if discussing information with third parties, including business associates and franchisees.  Employment contracts need to contain clear terms for those employees who will be handling confidential information and contracts should be reviewed if the employee's role changes.  Companies should also consider implementing robust security policies for the protection of trade secrets accessible in offices (e.g., a clean-desk policy and locked storage) or in electronic files (e.g., password protection and information barriers).    

If these measures are undertaken then the entry into force of the Trade Secrets Directive offers companies a new opportunity to increase cross-border activities with a reduced risk of damage to the business through the unlawful use or disclosure of their trade secrets.

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

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

Similar Articles
Relevancy Powered by MondaqAI
In association with
Practice Guides
by Mondaq Advice Centres
Relevancy Powered by MondaqAI
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
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 (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

To Use 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.


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.


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