EU Says Yes to Trade Secrets Directive

EU Says Yes to Trade Secrets Directive

view inside filing cabinet with brown file folders, green folder with

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.

The information shared in the article gives general information only, and not a professional advice. If you want specific support or details about EU, please write to us at contact@globalupside.com or call +1-408-913-9130 to speak to our experts.

Global Upside supports international businesses with world-class Accounting, Tax, Legal, HR, Compliance and Staffing support when and where Clients need us. We provide support in 150+ countries with clients including both established multinationals and high growth companies like Zillow, Uber, Rhapsody, SGI, Real Networks, 8×8, A10 Networks, and Enphase Energy among others.