EU Says Yes to Trade Secrets Directive
The European Parliament, in April, approved a new directive on the protection of trade secrets that will provide common minimum statutory standards for all member states and most importantly provide a clear definition of what constitutes a trade secret.
As per the directive, a trade secret is:
- Information that is not generally known among or readily accessible to persons within circles that would normally deal with the kind of information in question
- Has commercial value and
- Reasonable steps have been taken to keep it secret.
Businesses will need to prove that active steps are taken to keep their sensitive data confidential for it to classify as a trade secret. Additionally, the directive will consider a person liable for breach of trade secret confidentiality only if that individual had clear prior notification or at least have knowledge that use or disclosure of the information is prohibited.
It is critical for companies to draft clear internal policies and confidentiality agreements with regards to trade secrets and educate/inform employees and all relevant parties about these policies.
The directive does not limit employees from using experience and skills they have acquired in their normal course of a job and has a provision for the protection of whistle-blowers.
The directive protects individuals who breach the law when exercising their right for freedom of expression and information, acting for the protection of the general public interest, and/or protecting a legitimate interest that is recognized under national or EU law.
The directive is expected to be approved by the European Council on May 17th after which member State will have two years to implement its provisions into domestic legislation.
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