Protecting trade secrets – recent EU and US reforms

The aims of the report are:

• Helping businesses understand what measures they have to take to benefit from the protection afforded by the EU Trade Secrets Directive and the US Defend Trade Secrets Act;
• Providing general guidance to businesses on internal practices for assessing risk, and for identifying and managing information that they wish to protect as trade secrets;
• Making recommendations to policy makers around the world considering establishing or reforming frameworks for the protection of trade secrets, based on lessons drawn from the experiences of the EU and US laws.

The ability to keep key information confidential plays an important role in business competitivity, and trade secret protection is an increasingly important legal tool for businesses to preserve such confidential information. However, it is only available when companies take appropriate measures to identify and safeguard the information they wish to protect. Doing this in practice is even more challenging in the digital environment.

Easier transmission of information due to digitisation has significantly increased the challenge of controlling unauthorised distribution of confidential information. The ubiquity of devices and appliances which can be used to access information on the Internet makes this challenge all the more formidable. The need for appropriate legal frameworks to help companies to protect their valuable confidential information in this new environment is therefore recognised by both businesses and governments.

Trade secret protection, however, remains weak in many countries, due partly to the lack of specific protective legislation and partly to the lack of awareness by the judiciary and other administrative bodies.

While improved rules may be important in several jurisdictions, they will not solve the problem of global trade secret abuse alone. Businesses need to carry out realistic risk assessments to determine the necessary level of information security to protect trade secrets. They also need to set up adequate information security policies, measures and training to effectively secure their intellectual property against the growing risks of trade secret misappropriation.

The substantive topics addressed in the ICC report include the legal status of trade secrets and specific exceptions, the identification of trade secrets and possible measures for protection of trade secrets, exceptions from protection, enforcement, and available civil and criminal remedies, as well as the scope of territorial jurisdiction.

As appropriate protection of trade secrets becomes widely recognised as a key instrument for increasing innovation, the report is a valuable tool to both businesses and policy makers in their efforts to better protect valuable confidential business information as trade secrets.