Special Issue: The EU Trade Secrets Directive

It is with sincere pleasure that the European Committee of LES International presents this Special Edition of LES Nouvelles dedicated to Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (better known as the Trade Secrets Directive) and its implementation throughout the European Union and beyond.

1.Trade Secrets Protection: Legal Framework With its publication in the Official Journal of the European Union on 8 June 2016, the European Parliament and the Council of the European Union adopted Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (“the Directive”).

For historical reasons, the legal provisions protecting trade secrets can mainly be found in the Austrian Unfair Competition Act (UCA). The UCA protects trade secrets both with civil (Sec 26a to 26j UCA) and criminal law provisions (Sec 11 to 12 UCA). Additionally, the Austrian criminal code contains criminal offences protecting trade secrets (Sec 122 to 124 Austrian Criminal Code). Whereas the civil law provisions have been completely redrafted due to the implementation of the EU Trade Secret Directive (TSD) by introducing a separate subsection into the UCA (Sec 26a ss), the criminal law provisions were not changed.

On 30 July 2018, the Belgian legislature transposed the EU Directive 2016/943 on trade secrets (hereafter, “Directive”) by adopting the law on the protection of trade secrets (hereafter, “Trade Secrets Law”), which entered into force on 24 August 2018. Considering that some provisions on trade secrets already existed in different pieces of legislation, the Belgian legislature did not consider it appropriate to provide for any autonomous legislation and decided to transpose the Directive by amending different existing texts, mainly: the Belgian Code of Economic Law (hereafter, “CEL”) and the Belgian Judicial Code (hereafter, “J.C.”).

Protection of trade secrets in the Czech Republic is spread across three statutory laws: Act No. 89/2012 Coll., the Civil Code; the Act No. 40/2009 Coll., Criminal Code; and the Act No. 221/2006 Coll., on the Enforcement of Industrial Property Rights and Protection of Trade Secret. The EU Directive 2016/943 on Trade Secrets (the “Directive”) has been implemented in the Czech Republic through the adoption of the Act No. 286/2018 Coll. (the “Amendment”) which contained not only implementation of the Directive but primarily concerned the trademark reform. The Amendment came into effect on 1 January 2019, with the exception of Part Two of the Amendment that deals with trade secrets, which came into force already on 28 December 2018.

The protection of trade secrets is governed by both the Danish Act on Trade Secrets and the Danish Criminal Code. The Danish Act on Trade Secrets entered into force on 9 June 2018 and is an implementation of the Trade Secret Directive. The protection of trade secrets under the Danish Criminal Code is found in Section 263 and Section 264.

In Finland, the protection of trade secrets is governed by both the Finnish Trade Secrets Act (595/2018, the “FTSA”) and the Criminal Code of Finland (39/1889). The FTSA which implements the Trade Secrets Directive (2016/943) entered into force on 15 August 2018 and contains the provisions of the civil framework of trade secret legislation in Finland, while criminal provisions remain in Chapters 30 and 38 the Criminal Code of Finland (39/1889).

The Directive on the protection of undisclosed know-how and business information 2016/943 has been implemented by the French Trade Secret Act of July 30th, 2018 (loi n° 2018-670 du 30 juillet 2018 relative à la protection du secret des affaires), into force since July 31st, 2018, and by an implementation decree of the French Conseil d’Etat (décret n° 2018-1126 du 11 décembre 2018 relatif à la protection du secret des affaires) on procedural aspects.

The EU Directive 2016/943 on Trade Secrets has been implemented in German law just recently on 26th April 2019. The German legislature decided to implement the Directive in a separate law, the Law on the Protection of Trade Secrets (Gesetz zum Schutz von Geschäftsgeheimnissen “GeschGehG”). Prior to this, the protection of trade secrets has often been described as a “stepchild of intellectual property” as numerous problems of detail and basic questions were not clarified. German law regulated the protection of trade secrets only through criminal law norms to which accessory civil law claims were linked. The central regulations for the protection of trade secrets were §§17ff. Act of unfair competition (UWG). The Directive has given the German legislature the opportunity to change the way such a protection of trade secrets is realized in German law.

Civil protection of Trade Secrets is provided by Act LIV of 2018 (Trade Secret Act), effective from 9th August 2018, which implemented Directive (EU) 943/2016 (Trade Secrets Directive) with the Civil Code and the Code of Civil Procedure applicable in a subsidiary manner. The Trade Secret Act follows the concept of other intellectual property sectoral laws, such as the Patent Act, the Trademark Act, etc. in terms of providing protection for trade secrets. In this structure, the property law character of trade secret is dominant as opposed to its the earlier dogmatic position as a type of personality rights.

Traditionally, in Ireland trade secrets were protected insofar as they fell within the scope of the law of confidence which is an equitable remedy applied by a court on a case-by-case basis (the principle of stare decisis applies in Ireland). The law of confidence in Ireland protects information which is confidential in nature and which is disclosed in circumstances importing an obligation of confidence. Case law has expanded the law of confidence over the years to apply it to different types of information and to disclosures in different types of circumstances.

Legislative Decree no 63/2018, (the “Decree”), implemented the trade secret directive (the “Directive”). In Italy, trade secrets are intellectual property rights (“IPRs”) and are protected both under the civil law (art. 98, 99, 120, 124, 126, 128, 129, 131 of the Italian Code of Industrial Property, “ICIP”) and under criminal law (art. 623, Italian Criminal Code, “ICC”).

The main protection of trade secrets in the Netherlands is by means of the implementation of the Trade Secrets Directive through the Act on the protection of trade secrets (Wet bescherming bedrijfsgeheimen) of 17 October 2018, Stb 369. This Act is an almost literal copy of the Directive. The Netherlands therefore have not relied on existing law that would supposedly cover the topics of the Directive, but have chosen to include virtually the full text of the Directive in new legislation.

The Ministry of Justice and Public Security (“Ministry of Justice”) in Norway has drafted a proposal for a new act on the protection of trade secrets (hereinafter “Proposal”). The proposal has been on a public consultation and the Ministry of Justice is now reviewing the results of the consultation. The main purpose of the Proposal is to implement the EU Directive 2016/943 on the protection of trade secrets (hereafter, “Directive”). Norway does currently not have a specific act for trade secrets. Instead rules on trade secrets exist in various legislations, particularly in sections 28 and 29 in the Norwegian Marketing Control Act and sections 207 and 208 of the Norwegian Criminal Code. The Proposal compiles and clarifies these rules, and on some points the protection of trade secrets is strengthened. The Proposal will be described in more detail below. Please note that citations from the Proposal are not official translations.

The EU Directive 2016/943 of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (the “Directive”) was implemented into Polish law by the Law of 5 July 2018 on amendment of the Law of 16 April 1993 on Suppression of Unfair Competition (further the “UC Law”), and certain other laws, which was published in Journal of Laws (Dziennik Ustaw) no. 1637/2018 dated 27 August 2018 and came into force as of 4 September 2018.

The transposition of Directive (EU) 2016/943 on trade secrets (the “Directive”) into Portuguese law was done through Law-Decree no. 110/2018, of December 10th (“Law 110/2018”), which simultaneously transposed Directive 2015/2436 on trademarks and brought about a new Industrial Property Code (“NPIPC”). The new provisions regarding trade secrets came into force on 1 January 2019. As a consequence of the recent reform, the regulation of trade secrets in Portugal has gone from a single discreet entry in the 2003 Industrial Property Code to a whole legal regime.

The Slovak Republic transposed the EU Directive 2016/943 on trade secrets (hereinafter the “Directive”) by Amendment No. 264/2017 Coll. amending the Slovak Commercial Code No. 513/1991 Coll. (hereinafter the “Commercial Code” or “CC”), with the effective date on 1. January 2018. Instead of implementing the Directive as a single Trade Secret Act, Slovakia decided to amend the existing provisions of Commercial Code protecting the trade secrets together with protection against unfair competition. Slovakia has kept this structure and also the measures, procedures and remedies for protecting trade secrets have not been implemented in Civil Litigation Procedure Act (No. 160/2015 Coll.) but have been included in the Commercial Code wording. Thus, the Directive’s provisions are included in one section of the Commercial Code governing Unfair Competition.

Under Spanish law, trade secrets are protected under both civil and criminal law. If the legal conditions are met, obtaining, using or disclosing trade secrets without the consent of the rights holder is considered as an act of unfair competition. The Spanish Unfair Competition Act provides in article 13 that: “the infringement of trade secrets, which shall be governed by the trade secrets legislation, is considered unfair”. The trade secrets legislation applicable in Spain is that contained currently in the Spanish Trade Secrets Act (“STSA”). The STSA implements Directive (EU) 2016/943 of 8 June 2016 on the protection of trade secrets (the “Directive”). The STSA provides a complete new legal framework with significant improvements regarding the legal framework applicable to trade secrets protection, the definition of lawful and unlawful acts, legal remedies and enforcement aspects and the contractual aspects of trade secrets as an object of property.

The Swedish Act on Trade Secrets can be used both in civil or criminal proceedings. The Act contains criminal penalties, such as fines and/or imprisonment, while at the same time providing for civil actions claiming prohibitive injunctions under penalty of a fine and compensation for damages. Anyone who intentionally and unlawfully prepares to access trade secrets shall be sentenced for corporate espionage to a fine or imprisonment for two years or, if the crime is severe, to jail for a minimum of six months up to six years. When assessing whether the crime is considered severe, particular consideration should be given to if the act has been of a particularly dangerous nature, has been of significant value or has meant very much noticeable damage. (section 26)

UK laws have provided remedies against breach of confidence in some form since the 13th century, although the more modern forms of protection date from the mid-19th century and further evolved after the second world war with the development of a sui generis form of action. Protection has historically been effected through a combination of common law and equity. This body of law is known as the law of “confidence”, which provides remedies for “breach of confidence”. There are also separate criminal laws protecting confidential information, notably those in the Official Secrets Act and the Prevention of Corruption Act.

Implementation of Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (hereinafter the “Directive”) requires organizations to take various measures to ensure their trade secrets can enjoy the protection provided for by the applicable member state. In the accompanying articles in this issue, various commentators have made recommendations for actions to take to claim that protection. This article seeks to gather and summarize those recommendations in a coherent fashion, so that organizations may maximize the possibility of securing such protection for their trade secrets.