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EU set for harmonised rules on trade secrets

The European Commission has today proposed a directive on trade secrets to replace the patchwork of rules across the EU

The draft directiveintroduces a common definition of trade secrets, sets out procedures for victims of trade secret misappropriation to seek redress and introduces measures that courts may use to avoid leakage of trade secrets submitted to it in the course of civil litigation on trade secrets theft.

The proposed rules come after officials in Brussels commissioned a studyand held a public consultationon the issue. It concluded that businesses find it hard to understand the rules on trade secrets across the EU and are reluctant to sue alleged infringers for fear that the courts will not keep their trade secrets confidential.

The Commission says that one in five European companies has been the victim of trade secret misappropriation, or attempts at misappropriation, at least once in the past 10 years.

Vice-President Antonio Tajani said that protecting trade secrets is particularly important for smaller businesses, which rely more heavily on trade secret protection than larger companies – in part because of the cost of patenting and protection against infringement.

At the moment, 18 EU member states have laws on misappropriation of trade secrets, although some, including Germany and Spain, do not define what trade secrets are. In Belgium, France, Ireland, Luxembourg, Malta, the Netherlands and the UK there are no specific provisions on trade secrets in civil law. Trade secrets are only protected by contract in Cyprus, while in France misappropriation of manufacturing secrets is a criminal offence if committed by employees.

The Commission says that the new proposal will align the rules in the EU with civil law rules in Japan and the US.

The draft directive will now go before the Council of Ministers and the European Parliament for adoption.

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