The legal framework in Ireland around trade secrets is fairly disjointed and companies and employers have had to rely on a mixture of the following:
- the contract in place with the employee/supplier and its provisions on confidentiality
- express clauses in a confidentiality or non-disclosure agreement
- common law jurisprudence on trade secrets and confidentiality
- implied duties of trust and confidence in particular relationships
On Friday the European Council formally adopted the EU Directive on Trade Secrets. The Directive aims to harmonise the law across the EU Member States by establishing a common definition of trade secret and by creating avenues of recourse where trade secrets have been misappropriated, used and/disclosed. Its further aim is to bring EU law on trade secrets in line with Japan and the US as part of the much criticised TRIPS initiative.
Under the Directive, in order to be considered a trade secret the information must:
1. Be confidential;
2. Have commercial value because of its confidential nature; and
3. The holder of the trade secret must have made reasonable efforts to keep it confidential
While it is unlikely that the Directive will significantly change how companies and employers in Ireland seek to protect their trade secrets it will provide comfort for exporters and multi Member State companies when dealing with other jurisdictions. It is also important for companies to ensure they have carried out Step 3 and ensure the measures they have in place to seek to protect their trade secrets and confidential information are sufficient. Businesses should also make sure they have accurately identified the information that should be classified as a trade secret and that a process is in place to review that information classification on a regular basis to keep up with business changes.
Member States now have 2 years to implement national legislation in line with the Directive. The main areas that the Member States will be able to vary on is in the areas of what will be deemed infringement and how evidence of breach can be obtained.
For more information please contact the Employment Team:
Paying for patenting and then monitoring breaches and following up with legal action for compensation across 28 different legal systems within the EU, even before tackling further afield, is just not affordable for these companies. The European Commission surveyed Irish industry and across the EU in relation to trade secrets and found that “one in five companies had suffered at least one attempt at misappropriation within the EU, whereas nearly two in five respondents stated that the risk of trade secret misappropriation had increased during the same period.”