Contrary to IP rights, trade secrets do not enjoy absolute and exclusive protection under Greek law. They are protected by means of confidentiality, non-use, non-disclosure agreements, and their protection is always “post factum”. Furthermore, civil proceedings do not offer an appropriate measure to preserve the secrecy of confidential information enforced in trade secret litigation. Nevertheless, trade secret protection is a company must-have, no less vital than protecting your patents, design rights or trademarks.
Trade Secrets Directive
The landscape is about to change. In 2016, the EU took steps to harmonize EU law, to ensure businesses can protect their innovative work and preserve competitive gains, by adopting the Trade Secrets Directive, which Greece should have transposed by June 9, 2018. The Directive contributes to the commitment to create a single market in the EU for intellectual property rights. Although the domestic legislative initiatives remain unclear, what is certain is that companies doing business in Europe must act now to ready themselves for this important reform.
The Trade Secrets Directive creates a baseline minimum level of protection which every member state must institute. It starts by setting out a uniform definition of a trade secret: any information that is secret (not generally known among or readily accessible to persons within the relevant circles of trade) and has commercial value because it is secret. The definition thus extends beyond more classic trade secrets like construction drawings or recipes and may include negative information like known product defects or company code of conduct violations.
Intent will no longer suffice. Companies must actively take reasonable steps to protect their trade secrets – and be able to show they did in court. A company failing to take such steps, or unable to prove it did so, could lose its trade secret protection.
When deciding on the scope of protection granted to a trade secret, courts will therefore consider the protective measures a company can show it employed. This makes it especially important for companies to implement far-reaching protective steps.
Furthermore, the Directive strengthens the position of employees – most notably, their freedom to bring any knowledge and experience gained during their tenure with a company to their next employer. Companies should therefore take steps to contractually ensure confidentiality during an employee’s tenure.
The Way Forward
If applied correctly, trade secret protection can be a cost-efficient way to protect a company’s intellectual property. But companies need to actively shape their trade secret compliance strategy to properly protect their assets. Companies should hence consider following precautionary measures:
- Think about what information may qualify as trade secret and Include its protection as part of the corporate IP strategy.
- Identify risks to the trade secrets, either such risks arise from employees or business partners, especially in R&D projects.
- Apply effective protection of trade secrets, by resorting to: (a) practical protection measures, such as restricted access, password protection or decentralization; (b) contractual measures, especially with employees and business partners, by revisiting many of your agreements; and (c) legal measures, such as prosecuting known misappropriation before Greek courts.
Implementing a trade secret protection strategy now wards off a case of unexpected misappropriation and is in parallel the optimal way to properly protect a valuable asset in view of the forthcoming legislative changes.