Trade Secrets Directive receives European Parliament’s vote of approval

On 14 April 2016 MEPs voted in favour of the proposed Trade Secrets Directive (the Directive), approving the text in its current form. The press release issued by the European Parliament can be found here.

The compromise text of the Directive, published in December last year, was the result of extensive trilogue¹ negotiations between the European institutions. The negotiations focused on the protection of whistle-blowers and ensuring that the Directive achieves the right balance between adequately protecting trade secrets but at the same time not supressing key fundamental rights principles such as freedom of expression and freedom of information.  

The Directive will set a minimum standard of harmonisation across the Member States, countering the fragmented approach to trade secrets protection that currently exists in the European Union. For example, for the first time, there will be a definition of ‘trade secret’, which in brief, is information that is secret, has commercial value because it is secret and has been subject to reasonable steps to keep it secret.

Another aspect of the Directive is the introduction of the concept of infringing goods and a cause of action for dealing in infringing goods. There will be no need to show that the person dealing in infringing goods knew that an unlawful use of a trade secret was made, it is sufficient to show that they should have known under the circumstances.

The Directive also provides for the preservation of confidentiality during court proceedings, alleviating the concern that the very act of bringing a case to protect trade secrets will in itself disclose the trade secrets. Although this is already provided for in some jurisdictions it is not currently a procedure used across the whole of the European Union.

Now that the text of the proposed Directive has been approved by the European Parliament, it is likely to be approved by the Council. Once approved, Member States will be given a period of time (two years) to implement any laws necessary to comply with the Directive.