Brief introduction to the EU directive 2016/943 on the protection of trade secrets and definition of know-how

The EU directive 2016/943 of 8 June 2016 by the European Parliament and Council has given a common framework on the protection of confidential know-how and business information (trade secrets) to the member countries.

Such a regulation has become necessary to establish common rules in the field of trade secrets where member countries do not own a uniform standard of protection and then to avoid market fragmentation. In fact, small, medium and big enterprises give the same value of patents and other intellectual property rights to trade secrets. The aim of the directive is to develop a real culture of trade secrets protection, in order to increase the competitiveness and innovative ability of enterprises.

Member countries have to implement the directive by 9 June 2018. The way of implementation of EU directive 2016/943 in the various counties and in Italy in particular will be interesting to examine.

First of all, before analyzing changes introduced by the directive, it is better to remember what “know-how” means, both at European and at Italian level.

The main definition of “know-how” is in article 1, paragraph 1, let. i) of EC Regulation 772/04 on technology transfer agreements: a package of non-patented practical information, resulting from experience and testing, which is: i) secret, that is to say, not generally known or easily accessible, ii) substantial, that is to say, significant and useful for the production of the contract products, and iii) identified, that is to say, described in a sufficiently comprehensive manner so as to make it possible to verify that it fulfils the criteria of secrecy and substantiality. For completion and specification of the cited definition, the EU Commission specifies the necessity of having a physical mean of support where know-how is described or defined, that is in order to fulfil the requirement of individuality.

Such a definition of know-how is cited in the same manner also in other regulations (EC Regulation 2659/2000 on the research and development agreements, EC Regulation 330/2010 on vertical agreements).

Trade secret is regulated in Italy by art. 98 of Industrial Property Code (IPC). In particular, such a regulation provides for the protection of business information and technical-industrial experiences, including commercial ones, subjected to the holder’s lawful control. Therefore, art.98 IPC does not explicitly cite know-how. Nevertheless, according to Italian lines of decisions, know-how can be included in the field of confidential business information (cf. Companies Court of Bologna, Judgment n. 2340/2015). In fact, the Supreme Court of Appeal has declared that the disclosure of scientific and industrial secrets sanctioned by art. 623 Penal Code can include also business know-how, declaring that the regulation is applicable also to the particular case of disclosure of know-how by former employees of a company with advantage to another rival company (judgement n. 25008/2001).

The new EU directive 2016/943 on the protection of know-how and confidential trade secrets gives a real definition of trade secret. Such a feature will be dealt in detail in the next articles.

Chiara Morbidi

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