On 15 December 2015, Members of the European Parliament (MEPs) came to a preliminary agreement over new rules against the theft or misuse of trade secrets. The rules, which are set out in the draft Trade Secrets Directive, aim to address inconsistent national laws and deter the unlawful acquisition, use and disclosure of know-how and business information.

The draft Directive:

  • Lays down an EU-wide definition of trade secrets.
  • Sets out common measures against the unlawful acquisition, use and disclosure of trade secrets. Such measures include the removal of goods from the market that have been manufactured on the basis of a trade secret that was illegally acquired.
  • Entitles trade secret holders to claim compensation for damages caused by misappropriation of a trade secret.
  • Requires Member States to put in place the measures, procedures and remedies necessary to ensure the “availability of civil redress” for a trade secret holder.
  • Preserves the confidentiality of trade secrets during and after legal proceedings.
  • Imposes a six-year limitation period in which claims can be brought.

MEPs have been careful to balance the protection of trade secrets with fundamental freedoms (such as freedom of expression) and the promotion of innovation. The European Council has, for example, made it clear that the Directive will not prevent legitimate use by investigative journalists, or restrict employee use of experience and skills honestly acquired in the normal course of their employment. Whistle-blowers will also be protected provided they act in good faith.

What happens next?

The wording of the Directive will be reviewed from a legal perspective, with the European Parliament expected to carry out its first reading on 8 March 2016, and the Council thereafter. If approved, Member States will have two years to incorporate the new rules into domestic law, following the Directive’s publication in the Official Law Journal of the European Union.