At the end of November, the European Commission published proposals to reform trade secrets law across Europe. These reforms should make it easier for trade secrets holders to protect their trade secrets and enforce their rights.

Background

The reforms are set out in a new EU Directive. The Directive will harmonise the law on trade secrets, and how it is enforced, across the EU.

The Directive is the result of a study by the Commission into how each EU Member State currently protects trade secrets. It found a patchwork of laws across Europe. In many Member States, the laws and enforcement procedures were inadequate.

The New Directive

The Directive will create a new minimum level of protection for trade secrets across the EU. The theme of the Directive is to prohibit the ”unlawful acquisition, disclosure and use of trade secrets”.

Amongst other things, the Directive:

  • Brings clarity as to what is protected as a trade secret, by defining what a trade secret is.
  • Introduces a common set of remedies where there has been unlawful acquisition, disclosure and use of trade secrets. These include interim and permanent injunctions, seizure and destruction of goods which result from the misuse of trade secrets and damages to compensate the trade secrets holder for losses suffered.
  • Establishes procedures to ensure that trade secrets remain confidential during legal proceedings. The fear of their trade secrets being released into the public domain during court action has often been a barrier to many trade secrets holders enforcing their rights.

Proceedings must be brought within two years of the trade secrets holder being aware that their secrets have been misused. Perhaps surprisingly, there are no new procedures in the Directive to make it easier for trade secrets holders to obtain evidence of misuse (such as a right to compel a defendant to produce documents, for example).

Next Steps

The Directive is not yet law. It has to be approved by the European Parliament and Council before it can come into force. It will then need to be implemented by each Member State. So, we are perhaps a year or two away from this being law.

This Directive is good news for businesses. The new minimum level of protection for trade secrets across the EU will give them greater certainty that their trade secrets will be protected and facilitate cross-border operations. It should also encourage innovation and investment in European businesses, putting them on an equal competitive footing with businesses outside Europe, particularly those in the US and Japan.

Read the new Directive.