Protecting the P&C Industry’s Intellectual Assets
infringing products (including software
and data type products) to remove the
trade secret violating features; force the
destruction of infringing good / removal
from market, unless such action would
undermine the trade secret’s protection;
deliver to the trade secret holder and/or
destroy of any or all parts of electronic
files, documents, substances, materials, or
objects containing or implementing the
trade secret; and publish the courts declaration of infringement. In other words,
you can really drop the hammer once you
establish misappropriation. But to qualify as an “infringing good” “design, quality, manufacturing process or marketing”
must “significantly benefit” from the
trade secret. That undefined term “
significantly benefit” raises an eyebrow, as its
meaning seems open to much interpretation. Your authors suggest that this is a
problem that will raise its head more than
once in the current form of the Directive.
Another noticeable difference relative
to U.S. trade secret laws (i.e., the Economic
Espionage Act) is the lack of criminaliza-
tion of trade secret theft. However, similar
to the U.S. where some states (e.g., Texas,
California) have done so, a few EU mem-
ber states (e.g., Germany) presently have
criminal statues for this behavior. A recent
amendment to a bill in France to criminalize
trade secret theft to discourage corporate
espionage was quickly withdrawn due to
outcry from political, civil and journalist
groups as impeding investigative journal-
ism and freedom of information.
Which brings us to additional pitfalls
that may be put into play by the Directive.
In particular, there are exceptions made
in the Directive for the quote/unquote
lawful disclosure of trade secrets. Given
the backlash in France and other opposition groups, this may even be reworded
to be broader before the new law is voted
on. These exceptions include:
1. “independent discovery or creation;”
2. “observation, study, disassembly or
test of a product or object that has
been made available to the public or
that it is lawfully in the possession
of the acquirer of the information;”
3.“exercise of the right of workers
representatives to information and
consultation in accordance with
Union and national law and/or
practices;”
4.“any other practice which, under
the circumstances, is in conformity
with honest commercial practices.”
The first two are pretty straightfor-
ward, and don’t seem out of line with how
things work in the U.S. But the last two
seem ripe for individual member states to
draft local law loopholes that could cause
big headaches for a trade secret holder.
Moreover, the Directive also include exclu-
sions that are a broadly worded invitation
to create nightmarish loopholes. Specifically,
“that there shall be no entitlement to the ap-
plication for the measures, procedures and
remedies provided for in this Directive … in
any of the following cases:”
1) “for making legitimate use of the
right to freedom of expression and
information;”
2) “for the purpose of revealing an applicant’s misconduct, wrongdoing
or illegal activity, provided that the
alleged acquisition, use or disclosure
of the trade secret was necessary for
such revelation and that the respondent acted in the public interest;”
3) “the trade secret was disclosed by
workers to their representatives as
part of the legitimate exercise of
their representative functions;”
4) “for the purpose of fulfilling a non-contractual obligation;”
5) “for the purpose of protecting a le-
gitimate interest.”
Yeah, terms like “right to freedom of
expression and information,” “revealing
misconduct, wrongdoing,” “public inter-
est,” “a non-contractual obligation,” a
“legitimate interest” sound upright and
positive, but what the hell do they mean?
Talk about broad, subjectively vague and
open to interpretation. And what will
those terms mean, say in Germany’s laws
vs. France’s vs. Italy’s and so forth.
Last month’s iPaint article clarified
that in the U.S., going to court can be
dangerous to your trade secret’s health.
And though the pending Directive has
clauses to restrict access to documents,
hearings, transcripts, and parts of decisions that may disclose trade secrets, how
this is implemented in each member state
and the effectiveness of court proceedings in protecting your secrets is still to
be evaluated. Litigant beware!
So, if we’re around when it is finally
passed, we will do a review of how things
are turning out given the strengths and
weaknesses of the Directive – in about
10+ years from now. Until then, que
sera, sera (Whatever will be, will be . . .
thanks Doris!). CW
