Brussels Sprouts new Trade Secrets Directive

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Europe has moved closer to the implementation of the Trade Secrets Directive after provisional agreement was reached on the text of the European Commission’s proposal. We are yet to be provided with a copy of the text itself, however a press release has summarised the extent of the Directive and the obligations it will place on the legislators of each member state.

A directive that provides for a common regime against the unlawful acquisition, use and disclosure of trade secrets has long been mooted. Businesses possess a huge amount of valuable information that cannot be legally protected via conventional intellectual property rights such as trademarks and patents. The exposure of technical know-how, business plans, corporate strategies, and pricing information could be extremely damaging particularly if placed in the hands of fierce competitors. Moreover, the dawn of the internet age means such information can be easily transferred across borders, so there is a clear need for a more international regime.

Currently there is little consistency of approach across Europe. In the UK for instance there is no legislation relating to trade secrets beyond the protection offered by the intellectual property office, with common law decisions plugging the gaps as to other miscellaneous information that has the “necessary quality of confidence”.

The new Directive is unlikely to fully harmonise trade secrets law across Europe, but instead sets out to provide a minimum standard that all member states will need to adhere to. In brief, EU states will need to provide necessary measures, procedures and remedies to ensure there is adequate civil redress available against the illegal acquisition, use and disclosure of trade secrets. The aim is to make it easier for national courts to deal with the misappropriation of confidential business information, remove infringing products from the marketplace, and provide clear compensation pathways for victims.

The measures have been subject to significant deliberations with a number of drafts having already bitten the dust following protestations that they inhibited freedom of expression. The proposals that have now been approved seek to tackle these concerns and ensure compliance with the EU’s Charter of Fundamental Rights. There will be no new limitations on investigative journalism, and whistle-blowers acting in good faith who reveal trade secrets for the purpose of protecting the public interest will also be protected. Despite these stipulations, it remains to be seen whether the rules adopted by national legislators pursuant to the Directive have a chilling effect on media expression in the context of trade secrets.

Although provisional agreement has been reached, the European Council and Parliament still have to formally approve the new text before the Directive comes into force – the Parliament is expected to vote on the issue in March 2016. Once the Directive takes effect, member states will have a maximum of two years to incorporate the new provisions into domestic law.

If you have any questions about trade secrets or intellectual property, or require assistance with any other commercial matters, please do not hesitate to contact me at john.pickervance@forbessolicitors.co.uk or on 0800 689 0831.

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