August 2018 – Romanian lawmakers are preparing new legislation designed to strengthen the protection of trade secrets. The draft Trade Secrets Law (“the Draft Law”) is currently under public consultation and once approved it will implement EU Directive 2016/943/UE (the “Trade Secret Directive”) into local legislation. Generally, the Draft Law reflects the requirements provided under the Trade Secret Directive, while detailing specific Romanian law procedures vis-à-vis the damages that may be sought through court proceedings and sanctions that may be imposed on claimants for passivity during court proceedings.
Under the current wording of the Draft Law, legal entities may file claims in relation to the protection of their trade secrets within a period of six years from the moment they knew or should have known about any illegal obtaining, use or disclosure of their trade secrets (the standard cases for suspension of the statute of limitation provided by the Civil Code remains applicable).
We summarise below the main local law specifics under the Draft Law in the event of court proceedings in Romania involving trade secrets, in addition to changes introduced by the Trade Secrets Directive.
Temporary prohibitions for the protection of trade secrets
- Types of temporary prohibitions: Temporary prohibitions mentioned in the Trade Secrets Directive (e.g. prohibition to use or disclose trade secrets, restrictions on selling certain assets that are allegedly breaching trade secrets protection) may be imposed on the defendant;
- Bond submitted by the claimant: To impose a temporary prohibition, courts may request that the claimant purchase a bond in order to cover damages incurred by the defendant or any other third party; and
- Cease of temporary prohibition: At the request of the defendant, in addition to the other situations mentioned under the Trade Secrets Directive, courts in Romania may decide to lift any such temporary prohibitions if the claimant does not file a claim on the merits of the case within 30 calendar days from the date on which the temporary prohibition was imposed by the court.
Measures taken by courts in proceedings involving trade secrets
- Confidentiality: Throughout the duration of court proceedings, individuals with access to alleged trade secrets (e.g. the parties to the case, their lawyers, witnesses, experts, court staff) are not permitted to use or disclose such secrets. In addition, the court may decide to hold hearings without public access if it considers this measure useful for the case;
- Bad-faith claims: Courts may dismiss any claims that are clearly unfounded or filed in bad-faith. In such cases, the court may decide to impose damages against the claimant to be paid to the defendant;
- Breaches through negligence: In the event of a breach of the protection of trade secrets by an employee through negligence, the court may impose on the employee a reduced amount of damages than it would normally do in cases of a wilful breach of trade secrets; and
- Damages imposed on the defendant: In response to a claim of a breach of trade secrets by a claimant, the court is obliged to impose fair, equitable, proportionate, efficient and timely reparatory measures on the defendant, as per the general principles in the Trade Secret Directive and following the relevant local legislation in terms of the amount of damages.
Sanctions for the passivity of claimants
Among the sanctions mentioned in the Draft Trade Secrets Law, the following should be kept in mind:
- Lack of compliance with temporary prohibitions or the final decision imposed by the court may result for legal entities in a fine between 0.1% and 1% of their turnover for the previous fiscal year (but not less than around EUR 2,200).
- Further, courts may impose damages against legal entities for the lack of compliance with its temporary prohibitions or final decision in the amount of 1% of their annual turnover for the previous fiscal year, per day.
We are monitoring the progress of the Draft Law and will advise you of any changes.