A European Commission draft directive is proposing fresh protection measures against the unlawful acquisition and use of confidential business information and trade secrets.

The directive introduces a common definition of commercial trade secrets, and simplifies the process of courts being able to deal with the misappropriation of private business information.  It also seeks to streamline businesses receiving damages for illegal actions in this area, and speeds up the process of removing trade secret-infringing products from EU marketplaces.  Confidential company information being stolen or misused can seriously affect the capacity of EU businesses to innovate and compete, the EC found.

A survey undertaken by the EC in July entitled the ‘Study on trade secrets and confidential business information in the internal market’ revealed that one in five companies had suffered an attempt to steal its trade secrets over the past decade.

The Commission’s findings follow a survey undertaken by Kroll in October – reported at the time by Wordbox – that showed rising numbers in this area, with 25 per cent of companies reporting theft of information in 2013 up from 18 per cent the previous year.

Laws governing information theft and trade secret misappropriation vary significantly between EU member states. Some EU member countries have no specific laws regarding the protection of business information at all.

One side-effect of this lack of uniformity is the difficultly cross-border businesses have in understanding foreign laws relating to the legality of information procurement.

Currently, when a company involved in cross border business experiences business information theft, they often decide not to litigate because they lack confidence in the offending company or individual’s home state in maintaining the confidentiality of the company information in question, during proceedings.  This fragmented business information landscape is creating a negative effect on cross-border cooperation between business and research partners, experts warn.  The issue has also become significant obstacle to businesses being able to use the EU market to further innovation and economic growth, they say.

With its draft directive, the EC hopes to help balance and harmonise the system of trade secret protection and give businesses a protected environment in which they can create, share and license valuable know-how and technology across the borders of the single market.

worldboxSource:  BIIA Member Worldbox