The implementation of Trade Secret Directive in the Czech Republic

By Vojtech Chloupek

05-2019

The Czech Republic has implemented the Directive (EU) 2016/943 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure by way of introducing an amendment to the Act on Enforcement of Industrial Property Rights ("Act on EIP"). Until then the protection of trade secrets was enshrined solely in the Czech Civil Code, under which the violation of trade secrets is considered to be an act of unfair competition.

The transposition of the Directive into national law was a bit delayed as the amendment to the Act on EIP transposing the Directive came into force on 28 December 2018 (i.e. more than 6 months after the deadline).

What are the key changes?

In case of unlawful acquisition, use or disclosure of a trade secret the authorized person may seek the infringer to refrain from acts infringing/endangering the rights and to remove the consequences of such endangering or infringement.

In particular, the authorized person may request:

  • the infringing/endangering products to be recalled from market;
  • the infringing/endangering products to be permanently removed/destructed;
  • the materials, tools or equipment intended for/used in the course of activities endangering/infringing the rights to be recalled, permanently removed or destructed.

Alternatively, the court may order (upon the request of infringer) the payment of a pecuniary compensation to the authorized person, namely where the infringer neither knew nor was able to know that his acts constitute an infringement, where the above measures would cause him an inadequate injury and the pecuniary compensation to an authorized person proves to be sufficient.

Other highlights

The Czech legal system does not explicitly regulates the whistleblowing to which is referred by recital 20 of the Directive. Therefore, there is a certain risk that the whistleblowing could be misused as an excuse for the violation of the trade secret.

Finally, under the Directive, the duration of the limitation period shall not exceed 6 years. The Czech civil code determines the limitation period to be 3 years.

Conclusion

As the Czech legal system had been, with minor exceptions, in compliance with the majority of the Trade Secrets Directive prior to its transposition, no major changes within the national were needed.

 

Authors

Chloupek-Vojtech

Vojtech Chloupek

Partner
Czech Republic

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