Protecting Trade Secrets: What Should You Know? Image

Protecting Trade Secrets: What Should You Know?

The Trade Secrets Act (Wbb) has applied in the Netherlands since 2018. This Act implements the European Directive on the harmonization of the rules on the protection of undisclosed know-how and business information. The aim of the introduction of the European Directive is to prevent the rule fragmentation in all Member States and thus to create legal certainty for the entrepreneur. Before that time, no specific regulation existed in the Netherlands to protect undisclosed know-how and business information and the solution had to be sought in contract law, or more specifically in confidentiality and non-competition clauses. Under certain circumstances, the doctrine of tort or the way of criminal law also offered a solution. With the entry into force of the Trade Secrets Act, you as an entrepreneur will have a legal right to initiate legal proceedings when your trade secrets are unlawfully obtained, disclosed or used. What exactly is meant by trade secrets and when and what measures you can take against a breach of your trade secret, you can read below.

Protecting Trade Secrets: What Should You Know? Image

What is a trade secret?

Secret. In view of the definition in Article 1 of the Trade Secrets Act, the business information should not be generally known or easily accessible. Not even for experts who usually deal with such information.

Trade value. In addition, the Trade Secrets Act stipulates that the business information must have commercial value because it is secret. In other words, unlawfully obtaining, using or disclosing it could be detrimental to the business, financial or strategic interests or the competitive position of the entrepreneur who lawfully has that information.

Reasonable measures. Finally, business information must be subject to reasonable measures to keep it confidential. In this context, you can think of, for example, the digital security of your company information by means of passwords, encryption or security software. Reasonable measures also include confidentiality and non-competition clauses in employment, collaboration contracts and work protocols. In this sense, this method of protecting business information will continue to be important. Law & More’s attorneys are experts in contract and corporate law and are happy to help you draft or review your confidentiality and non-competition agreements and clauses.

The definition of trade secrets described above is quite broad. In general, trade secrets will be the information that can be used to make money. In concrete terms, the following types of information can be considered in this context: production processes, formulas and recipes, but even concepts, research data and customer files.

When is there an infringement?

Does your business information meet the three requirements of the legal definition in Article 1 of the Trade Secrets Act? Then your company information is automatically protected as a trade secret. No (further) application or registration is required for this. In that case, obtaining, using or making public without permission, as well as the production, offering or marketing of infringing goods by others, is unlawful, according to Article 2 of the Trade Secrets Act. When it comes to unlawful use of trade secrets, this could also include, for example, a violation of the non-disclosure agreement related to this or another (contractual) obligation to limit the use of the trade secret. Incidentally, the Trade Secrets Act also provides in Article 3 exceptions to the unlawful acquisition, use or disclosure as well as the production, offering or marketing of infringing goods. For example, the unlawful acquisition of a trade secret is not considered to be the acquisition by means of an independent discovery or by ‘reverse engineering’, i.e., observation, research, disassembly or testing of a product or object that has been made available to the public or on has been obtained lawfully.

Measures against trade secret infringement

The Trade Secrets Act offers entrepreneurs options to act against the infringement of their trade secrets. One of the possibilities, described in Article 5 of the aforementioned Act, concerns a request to the preliminary relief judge to take interim and protective measures. The interim measures concern, for example, a prohibition on a) the use or disclosure of the trade secret or b) to produce, offer, place on the market or use infringing goods, or to use those goods for those purposes. to enter, export or save. The precautionary measures in turn include the seizure or declaration of goods suspected of being infringed.

Another possibility for the entrepreneur, according to Article 6 of the Trade Secrets Protection Act, lies in the request to the court of the merits to order judicial tremors and corrective measures. This includes, for example, the recall of the infringing goods from the market, the destruction of goods containing or applying trade secrets and the return of these data carriers to the holder of the trade secret. Furthermore, the entrepreneur can claim compensation from the infringer on the basis of Article 8 of the Soil Protection Act. The same applies to the conviction of the infringer in the reasonable and proportionate legal costs and other costs incurred by the entrepreneur as a party assimilated, but then via Article 1019ie DCCP.

Trade secrets are therefore an important asset for entrepreneurs. Do you want to know whether certain company information belongs to your trade secret? Have you taken sufficient protective measures? Or are you already dealing with a breach of your trade secrets? Then contact Law & More. At Law & More we understand that infringement of your trade secret can have far-reaching consequences for you and your company, and that adequate action is required both before and afterwards. That is why the lawyers of Law & More use a personal yet clear approach. Together with you, they analyse the situation and plan the next steps to be taken. If necessary, our attorneys, who are experts in the field of corporate and procedural law, are also happy to assist you in any proceedings.

Law & More