Protecting trade secrets in the modern commercial world can be difficult. Across the EU there is discord as to what counts as a trade secret. While some member states have concrete definitions on the statute books, others have no clear legislative rules.

 Protection of trade secrets to strengthen under EU plans © ferkelraggae-Fotolia
Protection of trade secrets to strengthen under EU plans © ferkelraggae-Fotolia

Trade secret protection

While European Union member states differ on the definition of trade secrets, there is consensus that current levels of protection are insufficient.

The current lack of protection has consequences for cross-border trade and the uncertainty as to the definition of trade secrets leads businesses to shy away from bringing court claims to assert their rights.

Draft legislation published

To provide better protection of trade secrets in the future and to increase the efficiency of sanctions in infringement cases, the European Commission published a legislative proposal in November 2013.

Under the proposed directive, a trade secret is defined as confidential information not known to those who generally deal with information of such kind; that derives its commercial value from its secretiveness; and which is protected from unauthorised access through reasonable steps taken by the owner.

Protected information is unfairly obtained if it is unlawfully acquired, used or disclosed. This means that for protection of trade secrets to arise, the information must have been acquired through theft, bribery, deception or other reprehensible act.

An exception to this rule would exist for whistleblowers. If the publication of trade secrets is in the public interest, or if they concern criminal or administrative offences, the protection foreseen by the directive would be denied.

Better court protection

In addition to the legal remedies of injunctions and compensation, the proposed directive also prevents parties to legal proceedings from using or disclosing the trade secrets concerned. This ensures that, where necessary, sensitive information remains secret and therefore strengthens businesses’ position when bringing court claims against suspected perpetrators of infringements.