The European Parliament is voting on new trade secret legislation.
As stated by the European Commission,
A trade secret is a valuable piece of information for an enterprise that is treated as confidential and that gives that enterprise a competitive advantage. European companies are increasingly exposed to the misappropriation of trade secrets. The European Commission is working to harmonise the existing diverging national laws on the protection against the misappropriation of trade secrets so that companies can exploit and share their trade secrets with privileged business partners across the Internal Market, turning their innovative ideas into growth and jobs.
The new law was seen as needed because the laws of some EU member states do not define what a trade secret is. Only 2/3 of EU states even have specific trade secret laws. Also, remedies available for the owners of trade secrets, when those secrets were misappropriated, are seen as inconsistent and ineffective.
In the US, trade secrets are protected on a state-by-state basis, but many states follow the model Uniform Trade Secrets Act.
The proposed new EU law does not provide for criminal sanctions, as are available in the US in some cases of trade secret theft, as we recently discussed here. Some EU member states, including France and Germany, do provide for criminal sanctions for trade secret theft.
The proposed law would:
- Stop the unlawful use and further disclosure of misappropriated trade secrets
- Remove from the market goods manufactured using trade secrets that were illegally acquired
- Give victims of trade secret theft the right to seek compensation for damages caused by the unlawful use or disclosure of their trade secrets
More information and copies of the relevant documents are available here.
The law, if passed, will be good news for US companies with operations in the EU, or which are considering doing business there.
US companies already doing business in Europe will want to review their information protection policies to assure that they are taking “reasonable steps,” as defined by the new law, to protect their trade secrets.
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Photo Attribution: “EU flags” by Maycoll F. Vieira – Own work. Licensed under Public Domain via Wikimedia Commons .