The European Union has stated that cross-border innovation in science is being hindered by the current fragmented legal framework on the protection of trade secrets across member states. It recognises that intellectual property rights are an essential part of an innovation policy - without a supportive and secure environment for R&D, the private sector will be reluctant to invest. As such, it has a commitment to harmonise laws protecting trade secrets in the EU.

Draft Directive on the protection of trade secrets

An EU study in 2013 on the legal protection of trade secrets throughout the EU confirmed the fragmented and diversified nature of the existing protection and found it to be opaque, imposing unnecessary costs and risks and weak at a cross-border level. Those businesses consulted indicated their support for an EU legislative proposal.

A draft Directive has been published by the Commission, the Council has published its opinion on the draft and the EU Parliament has recently started to consider the proposal. The aim of the draft Directive is to establish a minimum legal framework across Europe to include the following main features:

  • a minimum harmonisation of the different civil law regimes, whilst allowing member states to apply stricter rules;
  • the establishment of common principles, definitions and safeguards as well as the measures, procedures and remedies that should be made available for the purpose of civil law redress;
  • a limitation period of six years for claims or bringing actions before courts;
  • the preservation of confidentiality in the course of legal proceedings, while ensuring that the rights of the parties involved in trade secret litigation are not undermined;
  • the establishment of a special regime for employees in relation to their liability for damages (reflecting a concern that employees may be unintentionally caught by the new framework in some instances and have limited financial means).

At this stage in the legislative process, it appears that there is broad support for a common legal framework to better protect the confidentiality of trade secrets. However, amendments have already been proposed by the Council in its opinion and there are a number of objections being voiced in the Parliament, with some MEPs expressing concerns over key definitions in the Directive and the delineation between the Directive and national laws.

MEPs are expected to continue discussions with a draft report scheduled for mid-January. The Directive is not expected to be implemented in member states before 2017. For further information, read the EU’s report on the draft Directive.