On 30 July 2018, with a few weeks' delay, the Belgian legislature transposed the EU Trade Secrets Directive (2016/943/EC) into domestic law via the Trade Secret Law, which entered into force on 24 August 2018.
As expressly stated in the preparatory works, the Trade Secret Law "does not create any new intellectual property rights", but instead aims only to provide a clearer regulatory framework that defines the measures, procedures and remedies available to trade secret holders whose secrets have been unlawfully acquired, used and/or disclosed.
Considering that some provisions on trade secrets already existed in different pieces of legislation, the legislature did not consider it appropriate to provide for autonomous legislation and instead decided to transpose the EU Trade Secrets Directive by amending different texts – namely:
- the Code of Economic Law;
- the Judicial Code; and
- the Law on Employment Contracts of 30 July 1978.
This article reviews the main amendments made to the Code of Economic Law.
The Trade Secret Law has notably adopted the EU Trade Secrets Directive's core concepts of trade secret protection as follows:
- According to Article I.17/1 of the Code of Economic Law, a 'trade secret' means not only technical know-how, but any type of information (relating to goods or services) that:
- is secret (ie, not generally known among or readily accessible to persons within circles that normally deal with the kind of information in question);
- has commercial value because it is secret; and
- has been subject to reasonable steps taken by the person lawfully in control of the information to keep it secret.
- A 'trade secret holder' is defined as any natural or legal person who lawfully controls a trade secret. This person does not necessarily correspond with the initial holder and/or the proprietor of the trade secret but can, for example, also be a licensee.
- An 'infringer' is any natural or legal person who has unlawfully (ie, without the trade secret holder's consent and contrary to honest commercial practices) acquired, used or disclosed a trade secret.
- 'Infringing goods' are goods whose design, characteristics, functioning, production process or marketing significantly benefit from trade secrets unlawfully acquired, used or disclosed.
While the adoption of the definitions above is more than welcome, it will probably not end all uncertainties. For example, at what point should goods be considered to have 'significantly' benefited from a trade secret? The assessment of a trade secret's accessibility may also raise further questions. Can information available on the Internet be considered 'readily accessible'? Thus, many questions are likely to keep the European Court of Justice busy in the coming years.
The acquisition, use and/or disclosure of trade secrets may only qualify as unlawful when, in addition to taking place without the trade secret holder's consent, they fall within the scope of one of the following situations set out in Article XI.332/4 of the Code of Economic Law:
- direct acquisition, use and/or disclosure contrary to honest commercial practices;
- indirect acquisition, use and/or disclosure by a third party who "knew or ought, under the circumstances, to have known"; or
- the production or placing on the market of infringing goods by a third party who "knew, or ought, under the circumstances, to have known".
The Trade Secret Law also defines a number of situations in which the acquisition, use and/or disclosure of a trade secret must be considered lawful or, in any event, must not give rise to restrictive measures or penalties (Articles XI.332/2 and XI.332/3 of the Code of Economic Law), thus confirming that, unlike IP rights, trade secrets do not confer an exclusive right of prohibition.(1)
The Trade Secret Law explicitly provides for the following innovative measures, procedures and remedies to ensure the protection of trade secrets, which are largely inspired by, but not identical to, the measures, procedures and remedies available to IP rights holders:
- As IP rights holders, trade secret holders may request a number of provisional (eg, cessation, seizure or delivery of suspected infringing goods) and/or permanent (eg, cessation, prohibition of production, recall from the market or destruction of infringing goods) measures. Further, trade secrets holders can also obtain damages (Article XI. XI.336/5 of the Code of Economic Law).(2)
- Unlike IP rights, the Trade Secret Law does not provide for:
The measures established by the Trade Secret Law are available to any party that qualifies as a trade secret holder. Given the relatively broad definition of a trade secret holder (ie, any party that lawfully controls a secret), it is advisable to clearly (de)limit the possibility for each lawful holder (eg, a licensee) to exercise these measures.
Finally, all claims arising from a trade secret infringement are time-barred at five years following the day on which the trade secret holder becomes aware of the infringing activity and the infringer's identity. Claims are time-barred at 20 years following the day on which the unlawful acquisition, use or disclosure occurred.
The Trade Secret Law is welcomed, as no general regulatory framework regarding trade secrets previously existed in Belgium. It remains to be seen how the law will be used and applied in practice, but it is an essential means in effectively appropriating, protecting and exploiting innovation by providing trade secret holders with the tools, similar to IP rights holders, to protect valid trade secrets. Identifying and keeping track of trade secrets by means of effective company directives and providing for the necessary contractual, physical and technical measures to protect secrecy are in any case necessary for optimising trade secret protection.
For further information on this topic please contact Sophie Lens or Joris Swennen at ALTIUS by telephone (+32 2 426 1414) or email (email@example.com or firstname.lastname@example.org). The ALTIUS website can be accessed at www.altius.com.
- the acquisition of a trade secret by means of an independent discovery/creation;
- the study/testing of a product lawfully made available to the public; and
- any practice which conforms with honest commercial practices.
More generally, the acquisition, use and/or disclosure of a trade secret will be considered lawful if required or allowed by EU or national law and, in any event, action will not be penalised if justified to protect a legitimate interest that is recognised by EU or national law.
(2) Contrary to the EU Trade Secrets Directive (which provides for minimum harmonisation), the Trade Secret Law does not subject the possibility to obtain damages to the proof that the infringer knew that the condemned acquisition, use and/or disclosure was unlawful.
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