Almost three years after its initial proposal, the Trade Secrets Directive has been formally adopted by the European Council and published in the Official Journal on 15 June (2016/943/EU). Member states will have until 9 June 2018 to implement the Directive’s provisions. As we reported last year, the Directive aims to harmonize the divergent body of trade secrets legislation that has developed across EU member states by requiring certain minimum standards to be met.
The Directive defines a trade secret as information which:
- Is secret in the sense that it is not generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question
- Has commercial value because it is secret
- Has been subject to reasonable steps, by the person lawfully in control of the information, to keep it secret
It also sets out:
- Rules on the lawful and unlawful acquisition, disclosure and use of trade secrets
- Rules on the preservation of trade secrets during litigation
- The measures, procedures and remedies that should be made available to individuals in the event of a breach (to include interim and final relief, damages, injunctions and the precautionary seizure of infringing goods)
- Sanctions for non-compliance with the Directive
- Certain reporting obligations
The protection of valuable, private know-how and secret information is expected to be welcomed by businesses throughout the EU. Concerns have been expressed, however, that the Directive, as drafted, could have a negative effect on free speech, the mobility of employees or whistle-blowers. The European Council sought to address each of these concerns in a press release dated 27 May. Specifically, the Council emphasized that journalists’ freedom of expression will be protected since the Directive only addresses the illicit or unauthorized acquisition of information. Additionally, whistle-blowers will be protected when revealing misconduct, wrongdoing or illegal activity, so long as they are acting to protect the public interest. While some minor tweaking of UK confidentiality law is expected, UK organizations are not likely to see any significant practical changes, as the Directive’s provisions are predominantly reflected in existing UK legislation.