Introduction

The EU Trade Secrets (Enforcement, etc) Regulations 2018 came into effect in June 2018. They implement the EU Trade Secrets Directive (2016/943) in Ireland.(1)

The regulations contain strong protections for IP holders by way of civil redress and criminal offences where a trade secret is unlawfully disclosed.

As a result, Section 7 of the regulations has amended the Protected Disclosures Act 2014 so that in instances where it is alleged that a disclosure of relevant information relates to a trade secret, it will constitute a protected disclosure only where the worker can demonstrate that the purpose of the disclosure was to protect the general public interest.

Cause and effect

This is a high standard that is likely to be unattainable by most workers because employees, in arriving at their decision to make a disclosure, can often be motivated by other causes or reasons which are ancillary to the public interest. These can include situations where they have had issues with their employers or co-workers.

Prior to the regulations, a whistleblower's motivation for making a protected disclosure was irrelevant in deciding whether it was a protected disclosure. However, the regulations now provide for the examination of a whistleblower's motivation where the disclosure or use of a trade secret is involved.

Criminal offence

According to the regulations, a whistleblower who makes a protected disclosure of a trade secret and cannot prove that they were motivated by the public interest can be liable to a criminal offence, which is punishable by up to three years imprisonment and a fine of up to €50,000.

Comment

Arguably, the key to the effectiveness of the Protected Disclosures Act since its enactment was that the whistleblower's motivation was irrelevant. This change in the law is significant because it is likely to deter whistleblowers from coming forward.

Employers should be aware of this change to the law and should, when receiving a protected disclosure, consider whether the protected disclosure contains information which might qualify as a trade secret.

If it does, the whistleblower must prove that they were motivated by the public interest in order to gain the protections of the Protected Disclosures Act. In addition, employers now have a range of options available to them if a trade secret is used contrary to the regulations (eg, civil claims for damages and potentially injunctive relief).

In addition to the protections contained in the regulations, employers should consider taking steps to protect their trade secrets generally by, for example, establishing comprehensive non-disclosure and confidentiality agreements.

For further information on this topic please contact Sarah Browne or Elizabeth Ryan at Mason Hayes & Curran by telephone (+353 1 614 5000) or email (sbrowne@mhc.ie or eryan@mhc.ie). The Mason Hayes & Curran website can be accessed at www.mhc.ie.

Endnotes

(1) More information on what constitutes a trade secret is available here.

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