New Trade Secrecy Laws for the EU

Contact: Colin Hulme; Burness Paull LLP (Scotland)

In the words of Bono, "A secret is something you tell another person". If that is your inclination, then you will need to reconsider, at least when the secret is a commercial one. New trade secret laws originating from the EU are being introduced this year which will clarify and reinforce existing laws of confidentiality for business information.

 

Those companies which are innovating and developing ideas should be rewarded with an ability to exclusively exploit those ideas, for a period at least. This is especially important in the Internet Age, where material can be downloaded and transferred at the push of a button, and in seconds the world can be made aware of a company's latest initiative before any first-mover advantage can be realised.

These laws are not just protecting your business information from Mission Impossible type industrial espionage or cyber-criminals hacking into your IT systems. The risk of losing confidential information is much more common-place. This will protect your business from employees who remove information on iPods or by sending it to personal email accounts, something that happens every day, innocently or otherwise.

The European Commission has recently recognised the growing importance of protecting confidential business information, in particular trade secrets. It estimates that 25% of companies reported theft of information in 2013, a 7% increase on the previous year. I think that is a gross underestimate of the problem. This growing issue, coupled with the varied and inconsistent approach taken to trade secrets across Member States, led to the Commission's introduction of their draft Directive in November last year.

As matters stand, trade secrets can be protected in the UK by a combination of implied and express contractual rights and by the common law of confidentiality. The Directive will raise the profile of this as a form of intellectual property and should bring consistency across the EU as to the extent to which action can be taken against the theft of trade secrets.

Fully entitled the 'Directive on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure', the proposals aim to implement a statutory framework which will provide an equal level of protection throughout the EU.