On 28 November 2013, the European Commission published a proposed Directive of the European Parliament and of the Council on the protection of undisclosed know-how and business information against misappropriation (COM (2013) 813 final) (the "Proposal") (See, VBB on Belgian Business Law, Volume 2013, No. 11, p. 12, available at www.vbb.com). The Proposal aims to harmonise the protection of trade secrets in the EU and provides a legal basis for a harmonised scope of protection, common remedies and measures to ensure confidentiality during litigation.
The Proposal provides a common definition of trade secrets and explains that trade secrets do not constitute intellectual property rights that confer a form of exclusivity on their owner. The Proposal defines trade secrets as information which meets three cumulative requirements: (i) the information must not be generally known (even in specialised circles); (ii) the information must have a commercial value; and (iii) the information is subject to reasonable steps to keep it secret or confidential.
Although trade secrets are not intellectual property rights, trade secret rules afford protection against misappropriation. The Proposal defines misappropriation of trade secrets as the unlawful acquisition (i.e., the acquisition without the consent of the trade secret holder and with use of dishonest means) and unlawful use and disclosure (i.e., by a person who unlawfully acquired trade secrets; by employees or licensees who breach their confidentiality or duty to limit the use of trade secrets; and by others who know or should have known that they received trade secrets from a person in any of the previous cases).
Further, the Proposal introduces measures, procedures and remedies in case of misappropriation of trade secrets. In particular, the Proposal introduces a two year-limitation period; measures to preserve the confidentiality of trade secrets during and after civil proceedings; interim and precautionary measures; injunctions and corrective measures; damages; and publication of judicial decisions as a remedy.
Finally, the Proposal also contains rules to ensure proportionality and safeguards against abuse and barriers to trade (e.g. sanctions for manifestly unfounded claims by bad faith applicants; statute of limitations; etc.). In addition, the Proposal introduces civil sanctions for non-compliance.
The Proposal will now be transmitted to the Council of Ministers and the European Parliament to be adopted under the ordinary legislative procedure. If approved, it could enter into force by the end of 2014.
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.
