Protection of Trade Secrets

Protection of Trade Secrets


The European Commission has proposed new rules on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use, and disclosure.

The draft directive introduces a common definition of trade secrets, as well as means through which victims of trade secret misappropriation can obtain redress. It will make it easier for national courts to deal with the misappropriation of confidential business information, to remove the trade secret infringing products from the market, and make it easier for victims to receive damages for illegal actions.
The Commission’s proposal will be transmitted to the Council of Ministers and the European Parliament for adoption under the ordinary legislative procedure.

There are substantial differences in the laws in place in EU countries on protection against trade secret misappropriation. Businesses find it difficult to understand and access the systems of other Member States and, whenever they become victims of misappropriation of confidential know-how, they are reluctant to bring civil court proceedings as they are not sure the confidentiality of their trade secrets will be upheld by the courts. The current fragmented system has a negative effect on cross-border cooperation between business and research partners and is a key obstacle to using the EU single market as an enabler of innovation and economic growth.

Unlike patented inventions or novels protected by copyright, the holder of a trade secret, such as a formula, business process, recipe, or marketing concept, is not the owner of an exclusive right over its creation. Competitors, and other third parties, may, therefore, discover, develop and freely use the same formula. Trade secrets are only legally protected in instances where someone has obtained the confidential information by illegitimate means, for example, through theft or bribery.

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