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EU Directive on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure.
The European Commission considers there to be three main problems:
A trade secret is a valuable piece of information for an enterprise that is treated as confidential and that gives that enterprise a competitive advantage. This may include technical information such as manufacturing processes and chemical compounds as well as commercial information such as lists of customers or results of marketing studies amongst others.
The European Commission is working to harmonise the existing national laws with the aim that companies should be more easily able to safely exploit and share their trade secrets with privileged business partners across the Internal Market, which in turn should enable growth.
The draft Directive seeks to help businesses protect their trade secrets by:
The draft Directive also seeks to preserve freedom of expression and right to information and deals only with unlawful conduct by which someone acquires or discloses trade secrets, without authorisation and through illicit means.
The main features sought by the Council include the harmonisation of different law regimes which will allow member states to apply stricter rules if they so choose and establishing a set of common principles, definitions and protections which are in line with international agreements.
The Council also put forward a limitation period of six years for bringing claims for infringements of the rules. Other features include the preservation of confidentiality in legal proceedings, and ensuring a favourable regime to employees in respect of their liability for damages in case of violation of a trade secret if they are acting without intent.
The Committee’s approach added a provision stating that the legislation should not affect the freedom of the media, and a clause stating that the rules do not affect the disclosure of business-related information by EU institutions and national public authorities.
The Committee also voted in support of amendments to the Commission plans that will ensure there are no unjustified barriers to workers’ mobility and that experience and skills honestly acquired by employees in the normal course of their employment shall not be considered a trade secret.
The Committee further proposed an amendment to the limitation period which, if introduced into the final version would mean that claims for infringements of the rules would need to be brought within three years rather than six.
The concept of minimum harmonisation allows member states to impose stricter regimes than that set out by the Directive and as such, businesses operating in more than one member state must be aware of this potential variance in the rules and requirements.
The Directive should provide additional protections for businesses, particularly smaller ones who may not have gone to the lengths of registering their intellectual property. There is also an overlap here with Data Protection - in theory, this Directive should result in increased protection for personal data as it would further discourage others from taking such information.
This article was written by Tanya Wilkie.
For more information please contact Tanya on +44 (0)20 7203 5058 or email@example.com