There is a new trade secrets law
Since October 2018, we have a new law in the Netherlands about the Protection of Trade Secrets (in Dutch: Wet bescherming bedrijfsgeheimen; WBB), which is based on the European Trade Secrets Directive. This new law did not receive the public attention it deserves, due to the ‘hype’ surrounding the new European Privacy law (GDPR). However, in the latest trade wars between USA and China, trade secrets play a vital role. What are trade secrets exactly, and how can you protect them?
What are Trade Secrets?
A trade secret is considered information which is:
- Not known or not easily accessible;
- Has commercial value, because it is secret; and
- You should take reasonable measures in order to keep it a secret.
If one of these conditions is not met, then it does not qualify as a trade secret. In practice, it can be very difficult to identify trade secrets, because they can come in many different forms and shapes.
Some examples are:
- Technical knowledge;
- The newest product releases;
- Product specifications;
- Marketing strategies;
- Business plans;
- Customer information; and
- Price information.
And there is probably plenty more in your company. It can be anything that has value for your company, and for your competitors. You can see them as your company’s crown jewels, and you would protect your crown jewels very carefully, right?
There is no register for trade secrets, so it is up to yourself to decide what is a trade secret, and then to protect it. However, many companies do not even know what and where their trade secrets are, and do not treat it any different than any other information in their company.
So if you ask me: ‘How can I protect trade secrets’, the answer always starts with:
- Start with identifying your ‘crown jewel’ information,
- Then ‘tag’ that information as ‘strictly confidential’, and
- Protect that information, by treating it differently that all other information.
What is new?
The legal concept of trade secrets is nothing new. Before we had this new law, there was not much that you could do against third parties who were (suspected of) using your trade secret. It would be very difficult to prove the theft and the damage. Under the new law, there are more possibilities for legal actions.
Now, anyone who receives or uses a trade secret without the permission of its owner is acting unlawful if that person:
- gained unauthorised access to it;
- has taken it unlawfully;
- copied documents illegally; or
- obtained them unfairly.
There are some exceptions to this rule, for example for investigative journalism, or disclosure of misconduct, mistakes or illegal activities.
What to do if someone is using your trade secret?
If someone is illegally using or disclosing your trade secret, then you can start legal proceedings. You can, for example, ask a court to order the other party to stop the use. But you can also seize products, claim damages and full court costs. The level of protection has therefore become quite similar to the protection of intellectual property (IP) rights, although it is not the same.
Before you start a court case, you should know that all court cases are in principle public, and can be published online. In a court case, you have to disclose your trade secrets to the court to some extent. Under the new law, the court can treat certain exhibits as confidential, and limit the number of people who have access to it. In addition, certain parts of the court decision can be edited, before it is published. These measures should be requested by the owner of the trade secret.