European Commission Publishes Studies on Protection of Trade Secrets and on Parasitic Copying

On 13 January 2012, the European Commission published two studies exploring the need for further harmonisation in the field of EU intellectual property rights. The first study addresses the protection of trade secrets (the “Trade Secrets Study”) while the second study relates to parasitic copying (the “Parasitic Copying Study”).

Trade Secrets

The Trade Secrets Study analyses the protection of trade secrets throughout the EU. The study reaches the conclusion that there is no uniform definition of what constitute “trade secrets” and that there are significant problems with the effectiveness of legal procedures for the protection of trade secrets in most Member States.

For Belgium, the Trade Secrets Study indicates that protection for trade secrets is found in different legal texts depending on the situation at hand. In particular, trade secrets are protected by general law of tort, unfair competition rules, criminal provisions and labour law. In addition, the Trade Secrets Study indicates that there are serious problems of enforcement of trade secrets in Belgium and that it is difficult or impossible in practice to obtain an injunction against the use of a misappropriated trade secret.

From its assessment of the laws of the various Member States, the Trade Secret Study distils a list of types of information that is typically capable of protection (although not every element is protected in each Member State) as well as a broad definition of what a trade secret is often accepted to be.

Although trade secrets are not regarded as intellectual property rights in most Member States, the Trade Secret Study points out that “undisclosed information” is protected under the TRIPS Agreement. According to TRIPS, the minimum remedies for the protection of “undisclosed information” must include injunctions, damages and other remedies such as the destruction of infringing goods.

Parasitic Copying

As regards parasitic copying, the Parasitic Copying Study finds that there are still significant differences between the legal regimes. These allow parasitic copies to flourish more in certain Member States. Trade mark law and unfair competition laws, which have both been harmonised to some extent at the EU level, provide protection against parasitic copying in most Member States. However, the level of harmonisation is insufficient to bridge the historic differences in how Member States address this issue. For instance, the Parasitic Copying Study suggests that the harmonisation of unfair competition rules focuses too much on consumer confusion to provide adequate, harmonised protection against parasitic copying.

The Trade Secret Study and the Parasitic Copying Study signal a need for harmonisation in the field of trade secrets and the protection against parasitic copying. It is expected that the European Commission will propose draft legislation to increase harmonisation. However, a timetable is not yet available.