Perquisition Privée: France Ahead Of U.S. In Allowing Trade Secret Owners To Seize Property From Suspected Thieves

Can trade secret owners secretly petition a court to seize property from a competitor that they suspect of stealing trade secrets? In the United States, the answer is: “Not yet.” This is one of the issues that Congress is considering as it debates a myriad of proposed trade secret reform bills. But in France, ex parte seizure orders have been available for some time and can be a powerful tool for trade secret owners to preserve the status quo and prove a case of trade secret misappropriation.

In France, companies that suspect a competitor has stolen its trade secrets can bring an action for unfair competition before the “Tribunal de Commerce,” or Commercial Court. In these types of cases, trade secret owners can allege that their competitors are unfairly benefitting from the plaintiff’s research and development efforts. Although discovery in France is limited, Article 145 of the French Code of Civil Procedure can help plaintiffs obtain the necessary evidence through a pretrial investigative measure known as a “référé in futurum.”

This law provides:

“If there is a legitimate reason to preserve or to establish, before any trial, the evidence of the facts upon which the resolution of the dispute depends, legally permissible preparatory inquiries may be ordered at the request of any interested party, by way of a petition [ex parte proceedings] or by way of a summary procedure.”

This is the same law that French courts cited a few months ago when they ordered Twitter to provide data that could help identify the authors of anti-Semitic tweets.

A trade secret owner can seek a seizure order from the President of the Commercial Court through summary proceedings or, better yet, through ex parte proceedings. In ex parte proceedings, the unfair competitor is not aware of the order authorizing the investigation. This can be highly effective as it gives the trade secret owner an element of surprise.

The alleged victim must establish that the investigation (i) has legitimate grounds and (ii) is strictly required to protect its rights. The President of the Court will then appoint a Bailiff and empower him to seize from the unfair competitor’s premises any relevant electronic or hardcopy information and documents that could be used as evidence in a future unfair competition action (“perquisition privée”). The Bailiff generally keeps the seized documents or electronic files until a judicial and adversarial proceeding between the parties has taken place to decide what documents should be turned over to the plaintiff.

Competitors often oppose such seizure orders by asserting their own trade secret rights in the information seized. French courts will typically strike a balance between the necessity for the plaintiff to gather such information to sustain its action and preserve its rights, and the asserted rights of the competitor. Although there’s no guarantee that a court will grant a pretrial investigative seizure order, this can be an important mechanism for a victim of trade secret misappropriation in France to obtain the evidence needed to prove its case.

 


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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