An appraisal of the EU Directive on Trade Secrets

Abstract

The EU Trade Secrets Directive (‘the Directive’)2 has standardized EU member states’ national laws on the protection of trade secrets. For the first time, a harmonized definition of what constitutes a ‘trade secret’ is established, as well as common measures aimed at preventing the misappropriation of trade secrets and rules for procedures and sanctions. The adoption of the Directive reflects the growing importance of trade secrecy protection internationally. Trade secrets offer protection even for knowhow and business information that cannot be protected by conventional intellectual property rights (IPRs). This could, for instance, be an invention that does not fulfil the requirements to obtain patent protection, such as the eligibility, novelty or nonobviousness criteria or nontechnical business information such as price or customer information. Another advantage of trade secrets is that the protection can in principle last in perpetuity, while conventional types of IPRs offer protection only for a limited period of time. Since it is not the information as such which is being protected, the trade secret holder cannot, however, object to the fact that a third party independently develops identical products, processes, algorithms and so on. Protection lapses as soon as the information protected as a trade secret becomes publicly available or loses its commercial value. As is well known from IPRs, protecting information comes with strings attached. National experiences have shown that protecting trade secrets may give rise to special concerns about defining the protectable subject matter and the scope of the protection. One example includes the many instances where secrets are being developed or used as part of an employment contract. Here an overly