European Council directive promises to protect trade secrets and whistle blowers

The directive lays down common measures against the unlawful acquisition, use and disclosure of trade secrets but will also “fully ensure” that investigative journalism can be practised without any new limitations.

It also complies with the EU’s Charter of Fundamental Rights, which preserves freedom and pluralism of the media.

Under the new measures, whistle-blowers will enjoy “adequate protection” but it will be up to national competent judicial authorities to judge whether the disclosure of a commercial secret was necessary to denounce a misconduct, wrongdoing or illegal activity.

In accordance with the new legal framework, EU member states will have to provide for the measures, procedures and remedies necessary to ensure the availability of civil redress against illegal acquisition, use and disclosure of trade secrets.

The limitation period for claims will not exceed six years.

After the directive is published in the Official Journal of the EU and comes into force, member states will have a maximum of two years to incorporate the new provisions into domestic law.

Gill Grassie, a partner in the IP and technology team at Brodies toldScottish Legal News that the directive was “long overdue”.

She said: “For the first time ever there will be a clear definition of what amounts to a trade secret. Clearly the information must be secret but this is qualified by a requirement for it to be not generally known or readily accessible within circles that normally deal with that information. Of course the information must have commercial value and there must have been reasonable efforts by the holder of it to keep it confidential.

“The vote in the EU Parliament came hot on the heels of the breaking of the Panama papers and this gave encouragement to the protestors against the Directive. The debate in the EU Parliament focused on the alleged chilling effect of the Directive on press freedoms, whistle blowers and employee mobility etc.

“However these objections were met in the form of exceptions to protection where the disclosure is for the purposes of freedom of expression and information, revealing misconduct, wrongdoing or illegal activity if the party concerned is acting in the public interest.”

She added that the directive will “raise the profile of trade secrets and confidential information as a valuable alternative form of IP protection”, saying: “This is especially so if the information is just outside the realms of being patentable.

“It should also encourage IP-rich technology companies to take the regime seriously in their overall IP policy and strategy planning and should represent a viable tool and incentive for them in cross-border sharing and exploitation of these valuable and secret ideas.”