Europe has taken a step closer to the adoption of the Trade Secrets Directive. The Council of Ministers and the European Parliament reached a “provisional agreement” on 15 December 2015 over the contents of the proposed Directive. Although the full text of the Directive on which agreement has been reached is not yet available, a press release has been issued which gives a few pointers to the issues which have been resolved.
The purpose of the Directive is to provide a level playing field for companies doing business in Europe by laying down common measures against the unlawful acquisition, use and disclosure of trade secrets. Currently there is a great diversity of systems and definitions in EU member states as regards the protection of trade secrets.
The press release notes at the outset that the Directive is to have a deterrent effect against the unlawful disclosure of trade secrets without undermining fundamental rights and freedoms or the public interest, such as public safety, consumer protection, public health, environmental protection and mobility of workers.
The Directive will not impose any restrictions on workers in their employment contracts, where national law will continue to apply. Therefore there will be no limitation to employees' use of their experience and skills honestly acquired in the normal course of their employment. In addition workers’ rights to enter into collective agreements will not be affected.
“Whistle-blowers”, or persons acting in good faith who reveal trade secrets for the purpose of protecting the general public interest, are to have adequate protection. It will be up to national judicial authorities to determine whether the disclosure of a commercial secret was necessary to denounce a misconduct, wrongdoing or illegal activity.
Compensation to trade secret holders
In accordance with the new legal framework, EU member states will have to provide for the measures, procedures and remedies necessary to ensure the availability of civil redress against illegal acquisition, use and disclosure of trade secrets.
These will have to be fair, effective and dissuasive; not unnecessarily complicated or costly; and should not entail unreasonable time-limits or unwarranted delays. The limitation period for claims will not exceed six years.
Trade secret holders will be entitled to apply for remedies following cases of illegal appropriation of documents, objects, materials, substances or electronic files containing the trade secret or from which the trade secret can be deduced.
Protection of trade secrets during court proceedings
Where necessary, confidentiality of trade secrets will also be preserved during the course of and after legal proceedings.
The original proposal for the Directive was submitted in November 2013. The Council and the Parliament still have to formally approve the new text before the Directive comes into force and the Parliament is expected to vote on the issue in March 2016. After publication of the Directive in the Official Journal of the EU and its entry into force, member states will have a maximum of two years to incorporate the new provisions into domestic law.