The European Commission (“Commission”) has commenced an online consultation (“Consultation”) to assess what impact the currently divergent national laws of EU Member States regarding confidential business and research know-how and other trade secrets have on the promotion of innovation and cross-border business within the EU internal market.

The Consultation, which closes on 9 March 2013, follows a study undertaken by the Commission in January 2012 on how the current laws of EU Member States seek to protect trade secrets (“2012 Study”). In its findings from the 2012 Study, the Commission expressed concern that the lack of uniformity, both legally and procedurally, of trade secret laws across the Member States may result in ineffective legal protection against the misappropriation of trade secrets. Specific examples include the courts of certain Member States not having an express power to grant permanent injunctions and the difficulty which claimants face when seeking to obtain sufficient evidence of trade secret misuse.

The Consultation seeks to gather the views of a wide range of stakeholders for the purpose of establishing the economic and societal implications of such inconsistencies between Member States. It does so by asking respondents for their views on a range of areas spanning:

  • the importance of trade secrets to business, R&D and the economy and their relationship with other intellectual property rights;
  • the current protection afforded to trade secrets in different Member States and the impact of divergent national laws;
  • the content, advantages and disadvantages of introducing specific new EU legislation to protect trade secrets; and
  • respondents’ experiences regarding how trade secrets are used and enforced in practice.

WAB Comment:

Any action which the Commission may take following the Consultation to clarify, harmonise and strengthen the laws on protecting trade secrets within the EU is likely to be welcomed by multinational companies wishing to exploit, protect and enforce their trade secrets within the EU. Harmonised laws would provide such companies with greater certainty and reassurance when considering whether to disclose trade secrets to potential business partners. In addition, they would help to place European industries on a level playing field with countries such as Japan and the US, where protection for trade secrets is seen as being more effective.

The commercial reality remains, however, that for many companies the use and disclosure of trade secrets is reciprocal. Any changes to EU law which make it easier for trade secret proprietors to enforce breaches will at the same time reinforce the need for users of trade secrets to implement and monitor rigorous internal procedures for handling such information to reduce the risk of intentional or inadvertent breaches.