The proposed Trade Secrets Directive came a step closer last week after the Council of Ministers came to a provisional agreement with the European Parliament on the draft legislation. The Council Press Release states: “Nowadays there is great diversity of systems and definitions in member states as regards the treatment and the protection of trade secrets. This new instrument will bring legal clarity and a level playing field to all European companies”.
Unfortunately the agreed text is not yet available. However, the press release specifically states that EU member States will need to provide the necessary measures, procedures and remedies for civil redress against illegal acquisition, use and disclosure of trade secrets. These will have to be fair, effective and dissuasive, not unnecessarily complicated or costly and should not entail unreasonable time-limits or unwarranted delays. Trade secret holders will be entitled to apply for damages following cases of illegal appropriation of documents, objects, materials, substances or electronic files containing the trade secret or from which the trade secret can be deduced. The limitation period for claims will not exceed six years.
The Press Release also hints at how some of the more controversial issues surrounding the proposed Directive have been resolved. For example, the new measures:
- will ensure that investigative journalism can be exercised without any new limitation on the protection of journalistic sources;
- will not include any limitations on employees using experience and skills honestly acquired in the normal course of their employment; and
- will include protection for “whistle blowers” who act in good faith and reveal trade secrets in order to protect the public interest. It will be left to national courts to decide whether such a disclosure was necessary.
Next steps
There will now be a “legal-linguistic” review of the text followed by a vote in the European Parliament, which is expected early next year. After publication in the Official Journal, Member States will have a maximum of two years to incorporate the new provisions into domestic law. We will continue to post on the Directive’s progress.