The UKIPO has published a consultation paper on the implementation of Directive 2016/943/EU concerning trade secrets (the "Directive") into UK law. The consultation invites comments from interested parties on the draft Trade Secrets (Enforcement, etc) Regulations 2018 (the "Regulations") that are proposed for this purpose.
The need for harmonisation
Trade secrets are valuable business assets and ensuring their protection in a consistent manner across the European Union is important to enhance growth within the internal market. However, in the European Commission's view, measures and remedies for the misappropriation of trade secrets currently vary across EU Member States and few Member States even include a definition of 'trade secret' in their legislation. A study carried out on behalf of the European Commission in 2013 identified that this could lead to inconsistency, making enforcement in other EU Member States more difficult and thus affecting the internal market.
The Directive came into force on 5 July 2016 and the deadline for its implementation into national law is 9 June 2018. It seeks to address the uneven protection of trade secrets in EU Member States and provides minimum standards for measures, procedures and remedies that trade secret holders should be able to rely on if their trade secrets are unlawfully disclosed, acquired or used.
The Directive is divided into four chapters:
- Chapter I, which contains key definitions, including the meaning of 'trade secret' and 'infringing goods';
- Chapter II, which defines lawful and unlawful behaviours and provides for exceptions;
- Chapter III, which sets out the measures, procedures and remedies that should be available to trade secrets holders for redress against unlawful acquisition, use and disclosure of trade secrets; and
- Chapter IV, which concerns reporting and sanctions for non-compliance.
For more detailed information on the provisions of the Directive, see our previous Synapse article.
The proposed Regulations
According to the UKIPO, the UK already has a robust and well-established legal framework that allows for the effective enforcement of trade secrets. Substantial changes in the law are therefore not required in order to implement the Directive into UK law. However, the existing regime in the UK comes mostly from the case law of breach of confidence and contract. The role of the proposed Regulations is therefore largely to codify existing UK case law and to ensure the adoption of a common, consistent definition of a 'trade secret' across the EU. As currently drafted the definition of 'trade secret' in the Regulations is identical to that in the Directive.
The proposed Regulations also implement some procedural changes in relation to the enforcement of trade secrets in the UK courts. These include prescribing time limits for bringing proceedings, introducing provisions relating to the preservation of confidentiality during and after proceedings and provisions relating to the various remedies available.
The consultation paper seeks the views of interested parties on the proposed Regulations which will transpose the Directive into UK law. The deadline for responses is 16 March 2018 and the government has indicated its intention to publish its response within six weeks of that date.