EU – Trade Secrets Law: practical implementation by businesses

Hogan Lovells

On 14 March, we organized alongside the Association française des juristes d’entreprise (AFJE) a workshop regarding the implementation of the Trade Secret Law in France, which was voted into force on 30 July 2018 and transposes the European Trade Secrets Directive of June 2016. Here are our key takeaways for international and French companies:

What’s the rationale behind the new law? It seeks to offer businesses protection and security over their “trade secrets.” In an increasingly competitive world, business confidentiality is a subject impacting companies of all sizes. In-house lawyers will have a central role to play in identifying and protecting their company’s assets.

What are Trade Secrets? For businesses, this law provides greater certainty over information;

(i) which is not, in itself or in the exact configuration and assembly of its elements, generally known or easily accessible to persons familiar with this type of information because of their field of activity;

(ii) which has commercial value, actual or potential, because of its secrecy; and

(iii) which is subjected by its legitimate holder to reasonable protective measures, taking into account the circumstances, to keep them secret.

A large array of material is impacted including: know-how, commercial strategy, economic, scientific or technological information, client or distributor documentation, databases, marketing or market studies, production procedures, commercial networks, strategy memos, recruitment plans and commercial agreements.

How to start? Companies may start by establishing a set of working groups to classify material in relation to its confidentiality, identify protection measures and raise awareness on how to manage shared information in a safe manner. These measures need to be easy to follow, in order to create a strong internal structure.

What can be protected by contracts? Having this in place, confidential information can be protected contractually through different types of contracts such as: confidentiality clauses and agreements, licenses, non-competition agreements as well as data exchange and research collaboration contracts.

How to protect your secrets through the judicial process? If there is a misappropriation or illegitimate use (there is an exception for whistle-blowers and journalists), it is possible to take a competitor or joint-contractor to court. Preliminary measures are available in case of imminent misappropriation or misuse. A trade secret holder may notably request ex parte that provisional or freezing measures be ordered if there is a risk of imminent disclosure or misuse of trade secret or to safeguard secrecy of information. Likewise, trade secrets can be protected during the course of a trial (eg. through hearings behind closed doors, redacted judgments and confidentiality clubs for reviewing exhibits).

For more information, see Stanislas Roux-Vaillard’s earlier video post which discusses the key points covered by the EU trade secrets directive.

[View source.]

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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