As of October 2018, we have a new Dutch law on the protection of trade secrets (WBB).(1) This law is based on the European Trade Secrets Directive.(2) Unfortunately, this new law did not receive the public attention it deserves, due to the "hype" surrounding the new European privacy law General Data Protection Regulation (AVG). However, in the recent trade war between the U.S. and China, trade secrets are playing a leading role. What exactly are trade secrets and how can you protect them?
A trade secret is considered information that:
Not publicly known or not easily accessible;
Has commercial value because it is secret; and
You must take all reasonable measures to keep it secret.
If certain information does not meet any of these conditions, then it is not a trade secret. Sounds simple, right? In practice, it is often difficult to identify trade secrets because they come in many different forms.
Some examples are:
Technical knowledge;
The latest product releases;
Product specifications;
Marketing strategies;
Business plans;
Customer lists; and
Pricing information.
And there's probably a lot more. Anything of value to your company and to your competitors can be a trade secret. You can think of them as your company's "crown jewels.
There is no "registry" for this, so it is up to you to decide what your trade secrets are and protect them.
Many companies don't even know what their trade secrets are and treat this information no differently than any other information. So when you ask me, "How can I protect my trade secrets," I say:
First, start by identifying the trade secrets,
Then you "earmark" that information as "strictly confidential," and
Only then can you protect that information effectively, by treating it differently from all other information. You need to secure this information as much as possible, by technical means (passwords, encryption) or other means (think storage in a safe).
The concept of "trade secrets" is nothing new. Before the new law existed, there was often little that could be done against theft of trade secrets. The theft and damages were often difficult to prove. Enforcement has been made easier by the Trade Secrets Protection Act.
Anyone who uses a trade secret without the owner's permission is acting unlawfully as that person:
gained unauthorized access to the trade secret;
took it unlawfully;
copied documents without permission;
is in breach of a contract; or
obtained this information dishonestly.
There are some exceptions to this rule, such as for investigative journalism or the disclosure (by whistleblowers) of misconduct or illegal activities.
If someone has used or disclosed your trade secret, you can take legal action. For example, you can ask the court to order that the other party stop using the trade secret. You can also seize products, seek damages and recover full litigation costs. The protection of trade secrets is therefore almost equal to the protection of intellectual property rights (such as copyrights and trademark rights).
Here it is good to know that all lawsuits are basically public and all court decisions can be published. In litigation, you have to reveal your trade secrets to some extent to the court, which you want to limit as much as possible. Under the new law, the court can keep certain attachments confidential and restrict access to these documents. In addition, certain portions of the court order can be "redacted" before it is published. These measures must be expressly requested.
