One year has passed since the EU has ratified the EU Trade Secrets Directive (full name: "Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure"). The Directive introduces a European Union-wide definition of "trade secret" and also provides minimum standards on trade secret protection and legal remedies among the Member States. Its aim is to improve legal protection of trade secret holders and thereby enhance the competitiveness of European businesses and research bodies and ultimately increase the European Union' s competitiveness in the global economy. The Directive is not directly effective in the individual Member States but has to be implemented into national legislation by 8 June 2018. The full text of the Directive can be found on the EUR-Lex website here. Recap - Why the Directive matters Simply put: ensuring a minimum degree of protection across the entire EU will enable businesses to pursue trade secret theft more easily across borders, particularly in a landscape where those secrets can be spread across the globe in an instant, such as by e-mail or upload through the Internet. In the current landscape, where trade secret protection varies wildly from jurisdiction to jurisdiction, multinational businesses have found it hard to combat infringements efficiently and to take a uniform approach to protecting their secrets. Creating a safer environment will encourage collaborative innovation and sharing of valuable knowhow between businesses throughout the European Union. It is rare for a piece of legislation to directly touch as many industries as this Directive: food and drink, IT and telecommunications, oil and gas, automotive, engineering, pharmaceuticals and perfumery, chemical, rubber and plastics, electrical and electronic components, financial services, including fintech and hedge funds. The list goes on… The Directive provides for a minimum standard of EU-wide trade secret protection, aligning the current system of disparate levels of protection in the individual EU Member States. Trade secrets protection thereby fills a legislative gap and is well attuned to protecting the soft skills of our information-driven society and of the ever-larger service economy. It also makes it easier for businesses to make an informed choice of whether they should opt for patent protection for a piece of novel technology, or whether there is more value in keeping it a secret. 2 Client Alert July 2017 The Directive in a nutshell: provides a uniform definition of the term "trade secret" provides rules for the protection of trade secrets and confidential information of EU companies includes common measures against the unlawful acquisition, use and disclosure of trade secrets is meant to have a deterrent effect against the illegal disclosure of trade secrets will not impose any limitation to employees' use of the experience and skills honestly acquired includes special rules for "whistle-blowers" - who in 'good faith' reveal trade secrets for the purpose of protecting the general public interest includes rules to ensure freedom of expression and investigative journalism in this context provides rules for civil redress and damage. The Directive provides a clear benefit in defining a trade secret and how to protect it. But it requires the taking of reasonable steps to protect it. Corporations or individuals must carefully choose and document these steps to benefit from protective measures or they will not have enough evidence to prove that something is a trade secret in a litigation case. Perhaps long overdue, trade secret protection is being improved and harmonized in the EU and elsewhere. However, trade secret protection comes with a clear instruction: you must treat your trade secrets as valuable and secret, and ensure you can prove you have done so. National implementation by EU Member States None of the EU Member States have so far officially informed the EU Commission of any concrete draft proposals. One year into the process, Member States will have to be speedy and effective in order to meet the implementation deadline. By way of example, the current German government has not yet released a draft proposal before its summer break and the upcoming elections in September 2017. Consequently, it remains to be seen how the to-be elected government will implement the necessary changes. It is possible that the current German laws on unfair competition will be amended. However, the legislator may as well introduce a new act on trade secrets. In Austria, the Directive is expected to be amalgamated into the existing Unfair Competition Act, according to information provided by the Austrian Federal Ministry of Science, Research and Economy. In France, it is likely that the Directive will be codified into an existing code, probably the Commercial Code or the Intellectual Property Code. Despite the UK 3 Client Alert July 2017 electorate's vote to leave the EU, it is likely that the UK will implement the Directive prior to leaving the EU to allow for harmonized trade secret protection. We will continue to report on this issue. You can also go to our Global Trade Secrets Handbook to review specific laws on trade secrets in over 30 jurisdictions. (Log in details are required and can be requested from the website).