EU Trade Secrets Directive – European Parliament starts discussions

19 January 2015

The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement), which came into force in 1995, requires the WTO members to take appropriate steps to protect trade secrets. The US have done so in the Uniform Trade Secrets Act, but protection in Europe has remained shattered and often below TRIPs standards. At the same time, protection of trade secrets is very important for the innovative industry to protect valuable knowhow. In Europe, business methods as such cannot be protected by patents, so the professional services sector has to rely on trade secrets.

After careful research and consultation with experts, the European Commission developed a draft Directive, which was presented in November 2013. This was further discussed with experts (including Bird & Bird's Bruno Vandermeulen, Natalia Zebrowska and Wouter Pors) and with the Member States, leading to a new Council proposal, published 19 May 2014. This proposal, which is a considerable improvement that deals with most industry comments, is now being debated by the European Parliament. The Committee on Legal Affairs will hold a hearing with industry representatives on 20 January 2015 at 15:00. At that hearing, Wouter Pors will give a practitioner's view. The plenary hearing in parliament is indicatively scheduled for 28 April.

The Trade Secrets Directive will bring a harmonized system throughout the European Union. Any confidential information that has commercial value will be protected, provided reasonable steps have been taken to keep it confidential. This may range from the Coca Cola recipe to yet unpublished results of investigative journalism. Next to unlawful acquisition and disclosure of trade secrets, also unlawful use will constitute an infringement. This allows for an effective protection of research and development, at a level at least comparable to the US.

Of course, there is still room for improvement, which will be discussed at the hearing. Defendants in litigation need to be able to properly discuss the case with lawyers and experts, but this should not result in the trade secret becoming public. The tools for enforcement are still not as good as for patents, which can easily be repaired by bringing trade secrets under the umbrella of the existing Enforcement Directive. Hopefully, the parliament will take the last steps to achieve an optimal result.

Certainly, the Trade Secrets Directive will provide an improved climate for investment in innovations in Europe and will thus be essential for anyone involved.

Links to further information:

European Commission webpage on the Trade Secrets Directive:
http://ec.europa.eu/internal_market/iprenforcement/trade_secrets/index_en.htm

May 2014 EU Council proposal:
http://register.consilium.europa.eu/doc/srv?l=EN&f=ST%209870%202014%20INIT

European Parliament procedure file:
http://www.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2013/0402(COD)

Hearing of the Committee on Legal Affairs:
http://www.europarl.europa.eu/committees/en/juri/events.html#menuzone

Broadcast of the hearing on 20 January:
http://www.europarl.europa.eu/ep-live/en/committees/video?event=20150120-1500-COMMITTEE-JURI

Authors

Pors-Wouter

Wouter Pors

Partner
Netherlands

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