Trade Secrets- Proposal for a directive on the protection of undisclosed know-how and business information (trade secrets).

The proposal follows on from an initial public consultation on the protection against misappropriation of trade secrets and confidential business information carried out on the 11/12/2012 which further prompted the EC to contract Baker & McKenzie to carry out a study on the role of trade secrets in the E.U. and its effect on innovation, competitiveness and economic growth. The review incorporated 27 member states (MS) with existing trade secret protection including, amongst others America and Japan with both have existing criminal and civil statutory protection for Trade Secrets.[1]

This has resulted on a general approach from the EC’s perspective to draft directive (9870/14) with a view to reaching an agreement with the European Parliament (EP). The legal framework sets out to harmonize the following

Civil law regimes
Principles, definitions and safeguards
Limitation period
Confidentiality during court proceedings
It is common knowledge that other forms of Intellectual Property Rights (IPR) such as Copyright, Patents and Trademarks are important not only to the proprietor of these intangible rights but are also essential to the country’s economy. Trade secrets are generally the lead up to the resulting IPR, hence the importance to provide valid protection. For example patent laws require absolute novelty but there are exceptions for trialling the subject matter and, for when an unauthorised disclosure is made.

A logical presumption follows then that MS should provide protection not only at civil law but at a criminal level too since the benefits of its protection directly impacts on a countries economy. America and a few other countries protect trade secrets through a legislative approach on a criminal and civil level. Whilst the civil law has been adopted at state level, 47 of the 51 States have adopted variants of the Uniform Trade Secrecy Act, whilst the criminal protection is protected through federal law i.e. Economic Espionage Act.

America takes their intellectual property seriously and is seen as “Our single greatest asset is the innovation and ingenuity and creativity of American people. It is essential to our prosperity and it will only become more so in this century”.[2]
Trade secret protection in America stretches back to the 19th Century in the form of common law which has afforded the Country considerable time to adopt and perfect protection in this area. However with the birth of the World Wide Web comes jurisdictional issues as well as Cyber warfare and therefore the protection of Trade Secrets is more important than ever.

The directive couldn’t come soon enough. With cyber-theft an ever increasing problem. The Transatlantic Trade and Investment Partnership discussions between the E.U. and U.S. Businesses are going to be asking the question, how will I be protected?

This and other articles will be posted by Daniel Selby of Southampton Solent University.Â

[1] http://ec.europa.eu/internal_market/iprenforcement/trade_secrets/index_en.htm ‘Trade Secrets and Confidential Information Business Information’ EU Single Market, European Commission,

[2] President Barack Obama

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