The Belgian Act on the protection of trade secrets, transposing the EU Directive 2016/943, was adopted by the Parliament last week. It aims at protecting undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure. The Act introduces specific provisions on trade secrets in existing legislations (namely the Code of Economic Law, the Judicial Code and the Employment Contracts Act of 3 July 1978). Amongst other provisions, the Act introduces new legal actions and an increased protection of the confidentiality of trade secrets in the course of legal proceedings.
Which trade secrets are granted protection?
The Act will be applicable to information which meets all of the following requirements:
- it is secret, in the sense that it is not generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
- it has commercial value because it is secret; and
- it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret (e.g. contractual confidentiality duties, physical or virtual protections, etc.).
Cease and desist orders under summary proceedings
Trade secret holders victims of a breach of their rights may seek from the President of the Commercial Court (without prejudice to the competence of the President of the Labour Court for labour disputes), under summary proceedings, the following orders against the alleged infringer:
- the cessation of or, as the case may be, the prohibition of the use or disclosure of the trade secret;
- the prohibition of the production, offering, placing on the market or use of infringing goods, or the importation, export or storage of infringing goods for those purposes;
- the recall of the infringing goods from the market;
- the modification of the infringing goods in order to deprive them of their infringing quality;
- the destruction of the infringing goods or, where appropriate, their withdrawal from the market, provided that the withdrawal does not undermine the protection of the trade secret in question;
- the destruction of all or part of any document, object, material, substance or electronic file containing or embodying the trade secret or, where appropriate, the delivery up to the applicant of all or part of those documents, objects, materials, substances or electronic files; and/or
- the publication of the Court’s decision in the press and its display at the infringers’ outlets and premises.
Orders resulting from a decision on the merits of the case
The Commercial Court has jurisdiction over the merits of the case (without prejudice to the competence of the Labour Court for labour disputes). Where the Court finds that there has been unlawful acquisition, use or disclosure of a trade secret, it may, at the request of the trade secret holder, order against the infringer the measures available to the President of the Court in the framework of cease and desist proceedings.
In addition, trade secret holders have the right to be compensated for their prejudice. Where the extent of the prejudice cannot be determined, the Court may render a decision ex aequo et bono. At the trade secret holder’s request, the Court may also order, by way of compensation, the delivery of the infringing goods, as well as the material and tools used for their manufacturing, to the trade secret holder.
Preservation of confidentiality of trade secrets in the course of legal proceedings
A court may declare in any procedure that specific information meets the standards of a trade secret and must be treated confidentially. In such case, all the persons involved in the proceedings (including the parties, their respective lawyers or other representatives, court officials and witnesses) are prohibited from using or disclosing the trade secret under fines of EUR 500 to EUR 25,000 (in addition to potential damages).
In order to protect the trade secret’s confidential nature, courts may also:
- restrict access to any document containing trade secrets or alleged trade secrets submitted by the parties or third parties, in whole or in part, to a limited number of persons;
- restrict access to hearings, when trade secrets or alleged trade secrets may be disclosed, and the corresponding record or transcript of those hearings to a limited number of persons; and/or
- make available to any person (other than those comprised under the first two bullets) a non-confidential version of any judicial decision, in which the passages containing trade secrets have been removed or redacted.
Entry into force
The new Act will enter into force 10 days after its publication in the Belgian State Gazette, which is likely to take place in the next few weeks. It will not apply to proceedings launched before its entry into force.