Since the Trade Secrets Protection Act implemented the European directive, Dutch law protects confidential business information directly, without requiring a contract. Three conditions must be met cumulatively: the information is secret, in the sense that it is not generally known or readily accessible to people who normally deal with that kind of information; it has commercial value because it is secret; and the holder has taken reasonable steps to keep it secret.

That third condition is where most claims fail. Information circulated freely inside an organisation, stored without access control and shared with suppliers without a confidentiality clause is not protected, however valuable it is.

What counts as a trade secret

Recipes and formulations, manufacturing processes, source code, algorithms and models, customer and supplier lists with terms, pricing structures, margin data, and research results that have not been published. What does not count is an employee’s general knowledge, skill and experience – the law does not allow an employer to lock up what someone has learned by doing the job.

What is prohibited

Acquiring a trade secret through unauthorised access or copying, or by other conduct contrary to honest commercial practices, is unlawful, as is using or disclosing it in breach of a confidentiality obligation. Liability extends to a party who knew, or ought to have known, that the information reached it through such an act – which is how a competitor that recruits a team can find itself liable alongside the individuals.

Reverse engineering of a lawfully obtained product is in principle permitted, unless it has been validly excluded by contract. Independent discovery is always permitted.

Remedies

The court can prohibit use and disclosure, order the recall or destruction of infringing goods, order the delivery up of documents and files, and award damages. Where the infringer acted in bad faith, damages can be measured by the profit made rather than by the loss suffered. Interim relief is available, and in this field speed matters more than in almost any other: once information is public it is no longer secret, and no order restores that.

Proceedings themselves are adapted to the subject: the court can restrict access to documents and hearings so that litigating does not itself destroy the secret.

Practical protection

Because the legal protection depends on the measures you took, the measures are the strategy. Identify what actually is secret – a register of the categories, not a claim that everything is confidential. Restrict access on a need-to-know basis and log it. Use confidentiality clauses with employees, contractors and counterparties, reinforced by a penalty, because proving the loss from a disclosure is otherwise very difficult. Mark documents. And run a proper exit procedure: retrieving devices, disabling accounts and reminding departing employees of their obligations in writing.

Relationship with other clauses

A confidentiality clause and a non-competition clause do different work. The first protects information and can last indefinitely; the second restricts where someone may work and is subject to its own strict requirements, including in fixed-term contracts. Relying on a non-competition clause to protect information usually fails on both fronts.