Today, companies are increasingly exposed to the unauthorized use of their trade secrets (following theft, unauthorized copying, espionage, etc.). This is due to longer supply chains, increased outsourcing and external storage of data, the phenomenon of job hopping, etc.
Given the detrimental effects on innovation, creativity and investment, action was taken at European level with a Directive (2016/943) to protect undisclosed know-how and business information. This was recently transposed into the Belgian Code of Economic Law (Articles XI.332/1-5 WER). The existing regulations to combat the disclosure and misuse of trade secrets (referred to in the Employment Contract Act, the Criminal Code, the regulations on fair trade practices and general liability law) were thus supplemented.
It did not create any new intellectual property rights, but a number of standards of conduct and prohibitions regarding trade secrets were registered in law.
What is a trade secret?
A trade secret is understood as information that (i) is secret, (ii) has a (potential) commercial value because it is secret and (iii) is subject to reasonable measures to keep it secret.
The information must not be generally known or easily accessible to persons ordinarily concerned with the information in question, must have a monetary value and be subject to reasonable steps to maintain confidentiality.
This can, for example, concern customer and supplier lists, formulas and recipes, price lists, production processes, algorithms, market strategies, etc.
What is not allowed?
The law includes a number of standards of conduct regarding the acquisition, use and dissemination of trade secrets.
Thus, there is an illegal acquisition of a trade secret if you consult, copy or appropriate any documents or materials containing a trade secret without permission.
The usage and the disclosure of a trade secret is unlawful if this follows from its unlawful acquisition or when (contractual) confidentiality obligations are thereby violated.
Furthermore, there is a indirectly unlawful acquisition, use or disclosure of a trade secret where a third party knew or should have known that the trade secret was obtained directly or indirectly from someone who unlawfully used or disclosed it. Goods resulting from the misuse of a trade secret may not be produced or marketed. It is therefore possible to act against third party acquirers of trade secrets.
What is allowed?
Independent development and reverse engineering (decompilation) are permitted, however, to the extent that the research is based on a product or object that has been lawfully obtained and not prohibited by contract.
What can you do against abuse?
The rightful holder of a trade secret can take action against the infringer to stop the unlawful acts, and/or obtain compensation.
For example, the court may be asked to order the cessation or prohibition of the unlawful acquisition/use/disclosure of the trade secret or to impose a prohibition on producing and commercializing infringing goods. In addition, the recall and destruction of the infringing goods or the documents containing the trade secret may be requested.
Compensation can be claimed for both the economic damage suffered (such as loss of profit) and the non-economic damage (moral damage).
The law also provides for an obligation of confidentiality for all participants in the legal proceedings and for those who have access to its documents (the parties, their lawyers or other representatives, court officers, experts, witnesses, etc.), even after the proceedings have ended. In addition, the court may impose specific measures to preserve the confidentiality of the information, including limiting access to the documents/hearings/reports to certain persons and the editing of a non-confidential version of the court decisions for persons other than these persons (whereby the parts containing the trade secrets are deleted or edited).
Do you need to react quickly?
Anyone who finds that the trade secrets are being misused or threatened will of course act quickly if it is to be efficient.
Legal action will be taken without delay if it concerns an injunction. Other legal claims have a customary limitation period. In employment matters, it is admittedly a maximum of one year after the end of the employment contract.
Deciding
The protection of trade secrets offers important advantages in that it provides immediate protection without overly strict conditions or formalities (no registration requirement), that no disclosure is required (unlike the protection provided by a patent) and that it provides indefinite protection. expensive. The other side of the coin is that there is no exclusive right to trade secrets and they are only protected against a unlawful acquisition/use/disclosure. The holder of a trade secret cannot therefore prohibit a third party from lawfully obtaining or discovering the secret.
It is advisable for companies to:
- take stock of their business secrets
- take the necessary physical, technical and contractual protective measures to ensure its secrecy, including, for example:
- access restrictions
- cybersecurity
- confidentiality clauses
- non-compete clauses
- internal confidentiality policy
- labeling information as “confidential”
- develop an action plan for its enforcement
You may disclose and share this tip with impunity.
