Widened protection of trade secrets
For a lot of companies, trade secrets and knowhow is the key to success. It’s the knowledge and expertise that gives them a head start on the market and separates them from the competitors. It’s the recipe for Coca Cola; the ingredients in the Big Mac sauce; the secret to Google’s search algorithm.
But trade secrets can be a tricky thing – because knowhow, ideas and concepts can generally not be protected, and there’s no way to prevent others from copying a good idea.
In Denmark, trade secrets are protected under article 19 of the Danish marketing act. The law determines that it is illegal to obtain trade secrets unjustifiably – but also illegal to abuse trade secrets obtained legally.
But with a new EU directive, the scope of protection for trade secrets is broadened. The proposal for the directive was accepted by the European Council in May 2016, and the member states are now obligated to implement the directive in their national legislation within two years.
The directive contains a line of improvements compared to the current rules under Danish law. First of all, the directive contains a wide, yet concrete, definition of what is to be understood from the term “trade secrets”. Secondly, the directive contains several rules on when a concrete action must be categorized as a violation of a trade secret – and which acts are not categorized as such.
Furthermore, the directive makes it easier to prevent abuse of trade secrets, as the companies can make use of several legal remedies to protect their rights, including issuing fines, demanding damages and obtaining interim injunctions. Should a company have their trade secrets abused, they can thus fight back with more power than before.
Compared to the current regulations, the EU directive broadens the scope of protection of trade secrets and the scope of what can be categorized as a trade secret, and the Danish marketing act will most likely have to be amended. Exactly how this will be done is yet to be determined, but the law will probably be supplemented with additional rules on the subject.
With the passing of the directive, innovative companies within the EU are offered better protection, as the new definition of trade secret is not only broader, but also clearer than the current regulation. At the same time, given the legal remedies, the companies will have a better chance to fight against abuse and protect their business.
By Mia Storm