New Opposition to the EU Trade Secrets Directive

Orrick - Trade Secrets Group

Not everyone is happy about the proposed EU Trade Secrets Directive.  When we last touched on this topic a couple of months ago, the European Union looked poised to enact a sweeping new legal regime that would harmonize trade secrets law across all member states.  The new framework was supposed to be a single, clear, and coherent legal regime for the protection of trade secrets.   And it was aimed at making it easier for national courts to deal with the misappropriation of confidential business information, remove trade-secret-infringing products from market, and facilitate compensation for illegal actions.

Not so fast.  It now appears that the initiative is being met with some resistance.   Recently, the European Public Health Alliance (EPHA), a multi-sectoral NGO coalition, issued a public statement opposing “the hasty push by the European Commission and Council for a new European Union (EU) directive on trade secrets” and called it a “threat to health, environment, free speech and work mobility.”  A link to the EPHA’statement can be found here.

Brief history and current status of the Directive:

In November 2013, the European Commission published proposals for a Directive on Trade Secrets.  In May 2014, the Council of the European Union agreed on a revised draft Directive.  The Directive is currently being negotiated by the European Parliament and the Council.  If adopted, member states will have two more years to implement the proposals.

The opposition:

The EPHA is made up of public health NGOs, patient groups, health professionals, and anti-disease groups working together to build public health capacity and to address public health challenges.  One of its main objectives is to monitor the policy-making process within the EU institutions and support the flow of information on health promotion and public health policy developments.  Last month, the EPHA expressed its opposition to the Directive and criticized the Directive for containing:

  • An unreasonably broad definition of “trade secrets” that enables almost anything within a company to be deemed as such;
  • Overly broad protection for companies, which could sue anyone who “unlawfully acquires, uses or discloses their so-called “trade secrets”; and
  • Inadequate safeguards that will not ensure that EU consumers, journalists, whistleblowers, researchers and works have reliable access to important data that is in the public interest.

According to the EPHA, a main concern is the potential abuse by companies in refusing compliance with transparency policies even when the public interest is at stake.  For example, the EPHA points to the danger that trade secret protection may be invoked by companies to hide information on chemicals in products that can cause severe damage to the environment and human health.  The EPHA also argues that the proposed Directive can undermine mobility of workers by creating situations where an employee may feel locked in, or will avoid jobs in the same field as his or her former employer, rather than risking not being able to use his or her own skills.

Ultimately, the EPHA urges the Council and the European Parliament should amend the Directive by limiting the definition of what constitutes a trade secret and strengthening safeguards and exceptions to ensure that data in the public interest cannot be protected as trade secrets.  In light of this opposition, it will be interesting to see how the Directive takes shape and if it strikes the appropriate balance between protecting trade secrets and recognizing the right to freely use and disseminate information.


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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Orrick - Trade Secrets Group

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