What does the guideline (EU) 2016/943 on know-how provide?

As described in the last articles, the guideline (EU) 2016/943 8 June 2016 of the European Parliament and Council – which must be acknowledged by the Member States within next 9 June – has provided for a common framework on the protection of know-how and confidential trade information (trade secrets).

The guideline is further described in detail.

First of all, the guideline describes trade secret as the combination of know-how and trade information, which is not disclosed and destined to be confidential. In particular, “trade secret” is made up of information meeting the following requirements:

a) they are confidential as they are not generally known or easily accessible, in their whole or in their precise configuration and combination of their elements, to people handling normally such a kind of information;

b) they own trade value because of their confidentiality;

c) they have been subjected to reasonable confidentiality efforts, according to situations, by people managing them lawfully.

Therefore, the guideline provides for the definition of “trade secret” which comprises trade information and technological information in the event of a lawful interest to keep the confidentiality thereof.

Moreover, such know-how and information should have trade value, either actual or potential. In other words, they should own trade value, for example, where unauthorized acquisition, use or disclosure thereof risk to damage the interests of the natural or legal person managing them lawfully, as they prejudge the scientific and technical potential, trade and financial interests, strategic posts or the competitive capability of said person. On the contrary, the definition of trade secret excludes irrelevant information, experiences and skills acquired by employees in the normal execution of their job and also information generally known or easily accessible to people in the sphere which deal normally with the kind of information at issue.

Then, the new guideline regulates the acquisition, use and disclosure of trade secrets, by identifying, in particular, lawful purchasing methods of trade secret. In particular, the independent detection of know-how itself and reverse engineering fall into lawful acquisitions according to the guideline. In particular, the guideline states that the acquisition of a trade secret is considered lawful when the secret is obtained by means of “observation, study, disassembly or trial of a product or object put at public disposal or lawfully owned by the subject who acquires the information”.

Moreover, the articles 4 and 5 of the guideline 2016/943 define the unlawful ways of acquisition, use and disclosure of a trade secret without the holder’s consent. The unlawfulness of use and disclosure of the trade secret is due to unlawful acquisition thereof.

It is relevant that the so-called whistleblowing is comprised among the exceptional events which allow the infringement of the law at issue (and therefore the lawfulness of disclosure of the trade secret), i.e. the event where the use and disclosure of trade secret occurred “for detecting a misconduct, an irregularity or an unlawful activity, provided that the defendant acted to protect the general public interest” (art. 5, par. 1, lett. b).

Eventually, the new guideline regulates measures, procedures, means of protections and penalties.

In particular, the guideline states that the means of protection must be fair, effective and cautionary as well as not expensive or complex. During the application, the protections must be proportional to the concerned interests and protect from possible misuses.

An essential part of the guideline concerns the protection of confidentiality of secrets during legal dispositions. Thus, it is relevant the provision of abuse of process (art.7 par.2), i.e. the event when the procedures and protections requested for the alleged infringement of a trade secret intend to prosecute unlawful intents. In such events, the guideline provides for measures such as the acknowledgement of a damage to the defendant, the enforcement of penalties to the plaintiff or the publication of the decision.

The guideline establishes in 6 years the limitation period of the infringement of rights and actions for requesting the application of protective measures (art.8).

Precautionary or provisional measures can be adopted (injunction with discontinuance order or prohibition to use and disclose the trade secret; prohibition to produce or merchandise “suspected” goods, as well as seizure or delivery of goods themselves) but they can be revoked in the event that the plaintiff initiates a proceeding about the infringement within a reasonable time.

After the proceeding on the merits – if the infringement of the law of trade secret – the judicial authority can order the mentioned injunction measures (relative to the use, disclosure and marketing of trade secret), in addition to the full or partial destruction of objects, materials, files containing or disclosing trade secret, or rather their delivery to its lawful holder.

Moreover, the guideline provides for further measures for the protection in favour of the plaintiff, such as the damages (art.14), as well as, at the expenses of the defendant, the publication of the decision of the judicial authority (art. 15).