UK Adopts New Trade Secret Regulations: Are Your Trade Secrets Protected?

Imagine you've just found out that one of your ex-employees has joined a competitor and has shared your most important trade secret with them. What legal protection do you have?

Recently, the Government of the United Kingdom added a new layer of statutory protection by enacting the Trade Secrets (Enforcement, etc.) Regulations 2018 (the Regulations). The Regulations took effect on June 9, 2018.

The new Regulations set out the remedies available when trade secrets have been unlawfully used or disclosed and provide measures by which courts can keep trade secrets confidential whilst such remedies are sought. This article highlights key points that employers with employees in the UK may need to know.

What is a trade secret?

A trade secret is a commercially valuable piece of information that gives an enterprise a competitive advantage. The quintessential example of a trade secret is the Coca-Cola recipe.

Under the new Regulations, a "trade secret" means information that is:

secret; has commercial value because it is secret; and has had reasonable steps taken to keep it secret by its owner. While a long-standing factor for trade secret protections in the United States, the third element (to take "reasonable steps" to protect a trade secret's confidence) is new in the UK as per the Regulations.

The Regulations allow for trade secret holders to enforce their rights through interim measures, injunctive relief, and other remedies.

What do the new Regulations mean for employers?

The Regulations provide an additional course of action available to employers that are seeking to act to protect their trade secrets. Employers can apply for remedies under existing breach of confidence rules in addition to or as an alternative to remedies under the Regulations where such actions provide wider protection than under the Regulations. It's not clear at this early stage how these actions will interrelate in practice. At the outset, we expect that most employers filing claims in the High Court will plead both actions to give themselves the best chance at success.

Since the Regulations implement an EU Directive that aims to provide better enforceability across the EU, employers should work to ensure that they can...