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MEPs vote to approve new trade secrets laws


New laws that will offer businesses protection against the unlawful acquisition, disclosure and use of their trade secrets have been endorsed by MEPs.

The European Parliament voted to approve the proposed new Trade Secrets Directive on Thursday. The Directive still needs to be approved by the Council of Ministers, a body made up of representatives from the governments of the 28 countries that make up the EU. Political agreement on the reforms was reached by the Parliament and Council late last year.

According to the draft Directive a trade secret is information that is secret, has commercial value because it is secret and has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

Information is only considered secret if it is "not … generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question".

It would be unlawful for anyone to acquire a trade secret without permission of the trade secret holder through a variety of means specified in the draft Directive.

Unlawful acquisition of trade secrets could occur through appropriation of, or copying of any documents, objects, materials, substances or electronic files, lawfully under the control of the trade secret holder, containing the trade secret or from which the trade secret can be deduced, or through any other conduct that could be considered contrary to honest commercial practices, according to the proposals backed by MEPs.

New protections against the unlawful use or disclosure of trade secrets are also planned. The unauthorised use or disclosure of trade secrets will be prohibited if that activity occurs where the trade secret was unlawfully acquired, if it breaches a confidentiality agreement or other duty not to disclose the trade secret or breaches a contractual or other duty limiting the use of the information.

The proposals also seek to provide protections against the second-hand sharing of trade secrets. They state that it will be considered unlawful for businesses to acquire, use or disclose a trade secret if they knew or ought to have known at that time that the trade secret had been obtained directly or indirectly from someone else who was using or disclosing the trade secret unlawfully.

Businesses that produce or offer infringing goods, or that place them on the market, including importing, exporting or storing infringing goods for those purposes, will also be considered to be an unlawful user of trade secrets if they knew or ought to have know that the trade secret was used unlawfully.

The draft Directive also seeks to enable innovation and competition by permitting "reverse engineering", other than where prohibited under contract.

Acquisition of a trade secret would be considered lawful, under the Directive, where it is obtained through independent discovery or creation.

Similarly, the acquisition of a trade secret through observation, study, disassembly or testing of a product or object will also be considered lawful where the product or object is publically available or in the lawful possession of the acquirer and where that acquirer is not bound by any legal duty to limit acquisition of the trade secret.

More generally, acquiring a trade secret through any honest commercial practice will also be considered lawful, whilst employees will also be said to lawfully acquire trade secrets when exercising their right to information and consultation, according to the draft Directive.

The proposals also seek to protect the media and whistleblowers from being the subject of claims relating to unlawful acquisition, use or disclosure of trade secrets. People that acquire, use or disclose a trade secret to exercise rights to freedom of expression, or to reveal misconduct, wrongdoing or illegal activity when seeking to protect the public interest, will have a defence against such claims.

Each EU country implementing the Directive will be able to set the limitation period within which claims relating to the unlawful acquisition, use or disclosure of trade secrets would need to be lodged before the courts.

National law makers will also be able to determine when the limitation period would be considered to start and the circumstances under which the limitation period would be considered to be interrupted or suspended. Limitation periods will not be allowed to exceed six years, according to the Directive.

"With one company out of every five a victim of theft of trade secrets every year, harmonisation should allow the creation of a safe and trustworthy environment for European companies, which will see their intangible assets and know-how secured," said Constance le Grip, a French MEP who is a rapporteur to the European Parliament on the Trade Secrets Directive.

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