Is It Secret? Is It Safe? The Trade Secrets Directive To Come Into Force On 5 July 2016

On 15 June 2016, EU Directive (2016/943) "On the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure" setting out rules for the protection of trade secrets and confidential information of EU companies was published in the EU's Official Journal. This means that the Directive will enter into force on 5 July 2016 (the 20th day following that of its publication in the Official Journal). EU Member States have to transpose the Directive into their national law by 9 June 2018, which means that there will be harmonised protection for trade secrets across the EU.

The Directive is intended to have a deterrent effect against the unlawful acquisition, use or disclosure of trade secrets and provide consistent protection for trade secrets across the EU. This will give businesses trading in the EU better cross-border protection of their trade secrets throughout the supply chain. The Directive also builds in safeguards to avoid undermining fundamental rights and freedoms or impacting on the public interest, including public safety, consumer protection, public health, environmental protection and mobility of workers.

Background

The concept of EU-wide measures against the unlawful acquisition, use and disclosure of trade secrets, was first proposed in November 2013. The EU Commission then set out a draft directive that aimed to align existing laws against the misappropriation of trade secrets across the EU. The overarching goal was to put companies, inventors, researchers and creators on equal footing throughout the EU so that there was a common, clear and balanced legal framework that discouraged unfair competition and facilitated collaborative innovation and the sharing of valuable know-how. Following comments, the draft was heavily revised and received approval after the inclusion of safeguards for the media, workers and whistle-blowers.

What is a trade secret?

The Directive provides a definition for "trade secret":

Article 2(1) 'trade secret' means information which meets all of the following requirements:

(a) it is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

(b) it has commercial value because it is secret;

(c) it has been subject to reasonable steps under the circumstances...