On last June 8, 2016 the European Parliament and the Council of the European Union have adopted Directive (EU) 2016/943 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure. The Member States shall bring this Directive into force until June 9, 2018.
The key role performed by the specific know-how of each company and by the trade secret is undoubtedly unquestionable, providing not only a competitive advantage, but also, and frequently, a differentiation factor between companies and, for that reason, representing a significant added value that the companies try to protect at any cost. In what regards the forms of protection or appropriation of the results of the activities of the companies carried out by companies, according to the Directive, there shall be a distinction between the recourse to intellectual property rights and, on the other hand, the protection of access to, and exploitation of, knowledge that is valuable to the entity and not widely known. Therefore, the trade secret protection emerges as a complement or as an alternative to intellectual property rights.
For the purposes of the Directive, trade secret means information which meets all the following requirements:
- It is a 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;
- It has commercial value because it is a secret;
- It has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.
Accordingly, confidentiality is used as a business competitiveness and research innovation management tool, and in relation to a diverse range of information that extends beyond technological knowledge to commercial data (e.g., information on customers and suppliers, business plans, and market research and strategies).
Considering the fact that enterprises are increasingly exposed to dishonest practices aimed at misappropriating trade secret, such as theft, unauthorized copying, economic espionage or breach of the confidentiality requirements and considering that, once the trade secret is publicly disclosed, it is impossible the reestablish the status quo ante, the Directive is adopted bearing in mind the protection of enterprises against acquisition, use and disclosure of trade secrets. Notwithstanding, these considerations do not automatically mean the creation of an exclusive right regarding the know-how and information protected as trade secrets, which, in fact, is refused by the Directive, and the independent discovery of the same know-how or information should remain possible.
The Directive specially emphasizes the importance that trade secret has within small and medium-sized enterprises (SMEs), taking into account that these rely on trade secrets as a way to ensure the development of new opportunities on a global scale.
Without prejudice to the protective ratio of the Directive, the acquisition of a trade secret shall be considered lawful when the trade secret is obtained by any of the following means:
- Independent discovery or creation;
- Observation, study, disassembly or testing of a product or object that has been made available to the public or that is lawfully in the possession of the acquirer of the information who is free from any legally valid duty to limit the acquisition of the trade secret;
- Exercise of the right of workers or their representatives to information and consultation in accordance with Union law and national laws and practices;
- Any other practice which, under the circumstances, is in conformity with honest commercial practices.
On the other hand, the acquisition of a trade secret without the consent of the trade secret holder is considered unlawful whenever performed through:
- unauthorized access to, appropriation of, or copying of any documents, objects, materials, substances or electronic files, lawfully under the control of the trade secret holder, containing the trade secret or from which the trade secret can be deduced;
- any other conduct which, under the circumstances, is considered contrary to honest commercial practices.
Additionally, the use and disclose of a trade secret is considered unlawful whenever performed without the consent of the trade secret holder, by a person who: (i) acquired the trade secret unlawfully; (ii) breaches a confidentiality agreement or any other duty not to disclose the trade secret; (iii) breaches a contractual or any other duty to limit the use of the trade secret. This list highlights the right conferred to the parties to, within a certain transaction, freely regulate the content of the contractual clauses that impose confidentiality obligations and that, once violated, determine the unlawfulness of the acquisition, use and disclosure of information protected by trade secret.
The Directive provides measures, procedures and remedies to ensure appropriate protection against trade secret violations, among which stands out the preservation of confidentiality of trade secret in the course of legal proceedings, obligation that remains in force after the proceeding is ended and that applies to all persons that intervene in the proceeding in any capacity, and, on the other hand, the provision of provisional and precautionary measures, namely:
- the cessation of or, as the case may be, the prohibition of the use or disclosure of the trade secret on a provisional basis;
- the prohibition of the production, offering, placing on the market or use of infringing goods, or the importation, export or storage of infringing goods for those purposes;
- the seizure or delivery up of the suspected infringing goods, including imported goods, so as to prevent their entry into, or circulation on, the market.
Lastly, the Directive assures the injured party, i.e. the holder of the trade secret, the payment of damages appropriate to the actual prejudice suffered as a result of the unlawful acquisition, use or disclosure of the trade secret. The determination of the damages shall take into account all appropriate factors, such as the negative economic consequences, including lost profits, which the injured party has suffered, any unfair profits made by the infringer and, in appropriate cases, elements other than economic factors, such as the moral prejudice caused to the trade secret holder.