Protecting your Confidential Information

22 Apr 2016

The European Parliament has approved a new Trade Secrets Directive. Its purpose is to harmonise the protection of trade secrets across the EU and help businesses obtain redress against the theft or misuse of their secret information.

UK law recognises that a trade secret may be much more than a secret formula. So does the Directive which defines a trade secret as:

“… Information which meets all of the following requirements:

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;

It has commercial value because it is secret;

It has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information to keep it secret…”

The Directive also provides that it will be unlawful to sell infringing goods.  This means:

“…goods, the design, characteristics, functioning, production process or marketing of which significantly benefits from trade secrets unlawfully acquired used or disclosed.”

Remedies include the seizure and destruction of infringing goods.

The Directive has had a difficult journey to this point and at one time attracted a 300,000 signature petition complaining that it was too friendly to business. However it’s due to be adopted by the Council of Ministers in the next couple of weeks following which Member States will have two years in which to implement it.

There’s some good stuff in the directive but its implementation in the UK is bound to be tricky. It will require a subtle blend of the nuances of existing UK law with the spirit of the European instruction. Foreseeable flash points are the exception for whistleblowing which seems to be wider than the recently amended UK law, a broad exception for journalistic freedom which looks like a nascent loophole and the suggestion that lack of intent may protect a negligent leaker.

Fingers crossed that BIS gets it right – to my eye the directive grapples bravely with a serious issue on which a high degree of harmony across the EU will benefit businesses.