By way of follow-up to earlier posts (here and here), we can report that the Council of the European Union has formally adopted the Trade Secrets Directive. This is the last step in the EU legislative process. The Directive must now be published in the EU Official Journal. It will come into force 20 days later. Each EU Member State must implement the Directive into national law. They will have two years to do this. So, Member States are likely to have laws in force on this by mid-2018. In the UK this is, of course, subject to the outcome of the referendum on EU membership.
The Directive aims to introduce a new, harmonised standard of protection for trade secrets across EU Member States, in an attempt to counter the increasingly widespread problem of trade secrets theft and to promote cross-border innovation. Currently, not all Member States have a national definition of “trade secret” which makes it very difficult for businesses to know what interests are protected in each territory. Also, there is currently little consistency across Member States on the remedies available to businesses where their trade secrets have been misappropriated. Broadly, the Directive introduces a statutory definition of ‘trade secret’, harmonises the circumstances in which the misappropriation of a trade secret will be unlawful and provides a common set of remedies. True harmonisation will, however, be jeopardised by the fact that the Directive is a minimum harmonisation measure meaning that Member States may implement more far-reaching protection for trade secrets than provided by the Directive if they wish.
It has been suggested that the UK will not need to enact implementing legislation as the existing law protecting trade secrets adequately reflects the substance of the Directive. This is doubtful but we await the UK government’s view on this.
The Trade Secrets Directive has been adopted in Europe just weeks after the Defend Trade Secrets Act was signed into law in the US. The DTSA creates a federal civil cause of action – and federal subject matter jurisdiction – for trade secrets misappropriation that “occurs on or after the date of the enactment” of the law and that affects interstate or foreign commerce. For more information on the new US trade secrets law, please read the posts on our blog here and here.
We will post a more detailed analysis of the Directive, and the implications for businesses, when it comes into force. In the meantime, if you would like to discuss any aspect of the protection of trade secrets in the UK or EU, please feel free to call Carlton Daniel.