The EU countries have implemented new legislation on Trade Secrets. Now we are looking forward to the European Court’s interpretation of these rules. Will Swedish practise, based on the only previous separate national law in Europe, and quite similar to the new European legislation, give advice. These are the 5 most interesting issues we are looking forward to learning more about.
5 questions we want the European Court
to answer on Trade Secrets
1) What will a court consider as a Trade Secret?
From Swedish practice, which is an interpretation of a previous Swedish legislation resembling the new EU harmonized law based on the European directive, Trade Secrets very often has a mixture of compiled information, i.e. a set of information which is not obtainable on the market, often requires qualified knowledge when conducting the compilation and in its compiled form gives the user a competitive advantage. Common examples are lists with client information, technical drawings of new products and financial information. Will the European Court confirm this interpretation?
2) Is access to information the same as a consent?
If an employee or an external co-worker is given access to specific information as part of their assignments, this is normally considered as a consent for use and disclosure in line with the assignment. However, if the employee or external partner obtains more information than expected by the company and is using it to an extent beyond what is required for conducting the assignment or discloses it beyond what is part of the assignment, it is considered as an unauthorized act prohibited by the Trade Secret legislation. Is this interpretation going to be changed?
3) Who has the burden of proof?
Initially, the plaintiff has to prove that the former employee etc. unauthorized has obtained, used or disclosed a Trade Secret. However, when the information presented to the court shows a distinctive similarity between the Trade Secrets and the material collected by the former employee etc., the burden of proof turns to the defendant. This is a general rule of procedure applied by the Swedish courts. Will the European Court balance the burden of proof in the same way?
4) How can we find out if someone has unauthorized access to Trade Secrets?
Normally, an infringement investigation is a sufficient tool for obtaining the right to search the premises of a suspected infringer in order to collect evidence about the suspected violation of the Trade Secrets Act. Will infringement investigations be as useful under the new Trade Secrets legislation?
5) Is all critical information considered as Trade Secrets? Quite often, when a third party is obtaining, using or disclosing critical information it might be harmful to the person or the business being exposed in this information but yet without beeing classified as a violation of the Trade Secrets Act. Many of these situations have their own legal regulation in other legislations, e.g. a doctor or nurse looking into information on other patients than their own, a developer checking in on a colleague’s work or an accountant leaking financial information to the client’s bank is most likely committing a breach of trust (crime) rather than a breach of the Trade Secrets Act. How will the European Court look at this type of critical information?
By Anders Hansson & Maria Frödin
Anders Hansson is a Senior Partner, Head of Patents, MSc(E). Anders is one of the founders of the company. He has worked with the University of Lund and a major IP firm. Anders is a Swedish authorized patent and Intellectual Property attorney and he has a vast experience in strategic discussions and international patent prosecution. He is a member of SPOF, the Swedish Patent Attorney Association, FICPI, the International Federation of Intellectual Property Attorneys and AIPPI, the International Association for the Protection of Intellectual Property.
Maria Frödin is a Senior Advisor, Attorney at law, mainly focusing on litigation on patents, trademarks, design, copyright and marketing law. She is also specializing in contracts and international strategic advice on Intellectual Property. Maria held for several years the position as Senior Group Legal Counsel with a global business group, then focusing on coordination of multinational IP litigations. She is a Swedish authorized patent attorney and an authorized European trademark and design attorney, and she is a deputy director of the official Board of Swedish Patent Attorneys.