European and International

Intellectual Property Law

Trade secrets

Dr. Ana Ramalho, LL.M.

29.11.2023
 Definitions
• Definitions differ
• Usually 4 characteristics
üinformation
üsecret
ücommercial value
üsteps to keep information
secret

• Examples: manufacturing processes; formulas; software; customers lists;

marketing, development and research plans; etc
 Trade Secrets and other IP
• Protected without registration
• Novelty and invention not required
• Broad definition of subject-matter (e.g., patentable & non-patentable)
• But limited scope of protection:
- unauthorised disclosure and use
-obtaining by improper means
not:
-independent derivation
-reverse engineering
Trade Secrets and other IP

Patent Trade Secret

The new chemical compound The inventor is the only one
was made in a reaction vessel who knows that the optimal
operated at 700° to 800° Celsius yield (i.e. best productivity)
and between 5 and 6 occurs at 766°Celsius and 5.43
atmospheres pressure atmospheres pressure
INTERNATIONAL FRAMEWORK
 Paris Convention - art. 10bis
Unfair Competition
1. The countries of the Union are bound to assure to nationals of such countries effective
protection against unfair competition.
2. Any act of competition contrary to honest practices in industrial or commercial matters
constitutes an act of unfair competition.
3. The following in particular shall be prohibited:
1. all acts of such a nature as to create confusion by any means whatever with the
establishment, the goods, or the industrial or commercial activities, of a competitor;
2. false allegations in the course of trade of such a nature as to discredit the establishment,
the goods, or the industrial or commercial activities, of a competitor;
3. indications or allegations the use of which in the course of trade is liable to mislead the
public as to the nature, the manufacturing process, the characteristics, the suitability for
their purpose, or the quantity, of the goods.
 Paris Convention - art. 10bis
• Trade secrets not named
• Different concepts of unfair competition
• Different concepts of “act of competition”
• Countries free to decide how the protection is granted
• Protection against (unfair) disclosure of trade secrets
possible, but not mandatory
TRIPS Agreement - art. 39
Protection of undisclosed information
1. In the course of ensuring effective protection against unfair competition as provided in
Article 10bis of the Paris Convention (1967), Members shall protect undisclosed information in
accordance with paragraph 2 and data submitted to governments or governmental agencies in
accordance with paragraph 3.
2. Natural and legal persons shall have the possibility of preventing information lawfully within
their control from being disclosed to, acquired by, or used by others without their consent in a
manner contrary to honest commercial practices so long as such information:
a. is secret in the sense that it is not, as a body or in the precise configuration and assembly of
its components, generally known among or readily accessible to persons within the circles
that normally deal with the kind of information in question;
b. has commercial value because it is secret; and
c. has been subject to reasonable steps under the circumstances, by the person lawfully in
control of the information, to keep it secret.
TRIPS Agreement - art. 39
• [10]For the purpose of this provision, “a manner
contrary to honest commercial practices” shall mean
at least practices such as breach of contract, breach of
confidence and inducement to breach, and includes
the acquisition of undisclosed information by third
parties who knew, or were grossly negligent in failing
to know, that such practices were involved in the
acquisition
TRIPS Agreement - art. 39.2a
Secret – when is information not confidential?
ü It is in the public domain
ü It has entered the public domain other than through the fault of the
receiving party
ü At the time of disclosure, the receiving party already had it in its
possession
ü The disclosing party has been able to disclose it to another party
without restriction
ü It is or was independently developed by the receiving party
ü It is disclosed as required by law or governmental rules or regulations
TRIPS Agreement - art. 39.2.b
Commercial value
ü Negative know how?
ü Actual or potential commercial value?
TRIPS Agreement - art. 39.2.c
Reasonable steps to keep secret
Examples:
ü locking doors
ü using passwords
ü placing appropriate confidentiality
blocks on documents
ü employee badge policies
ü employment agreements
ü confidentiality or non-disclosure
agreements with third parties
TRIPS Agreement - art. 39
•No defined time limit
•Weakness: once disclosed, no
protection
• No property protection for
undisclosed information
•No requirement for specific form
Are trade secrets IP?
• Art. 1(2) TRIPS
“For the purposes of this Agreement, the term "intellectual
property" refers to all categories of intellectual property that
are the subject of Sections 1 through 7 of Part II.”

• Includes the protection of undisclosed information

EUROPEAN FRAMEWORK
TRIPS Agreement - art. 39.3
Trade Secrets Directive - Background
• Different mechanisms to regulate trade secrets
• Different definitions of trade secrets
• Need for incentives for cross-border innovation
• Reduced business competitiveness
 Trade Secrets Directive - General
• Directive from 2016, implementation till June 2018
• No (intellectual) property approach: trade secrets as an alternative to
IP protection:
– Recital 1: “Businesses have recourse to different means to appropriate the results of
their innovation-related activities (…) Use of intellectual property rights, such as
patents, design rights or copyright, is one such means. Another means of
appropriating the results of innovation is to protect access to, and exploit, knowledge
that is valuable to the entity and not widely known. Such valuable know-how and
business information (…) is referred to as a trade secret
– Recital 16: “In the interest of innovation and to foster competition, the provisions of
this Directive should not create any exclusive right to know-how or information
protected as trade secrets.”
• However: IP terminology (“right holder”; “infringer”)
 Trade secrets - definition
• Same definition as in TRIPS (Art. 2.1): secret + commercial value +
reasonable steps to keep secrecy
ØCovers: know-how, business information and technological information
where there is both a legitimate interest in keeping them confidential and
a legitimate expectation that such confidentiality will be preserved
(Recital 14)
ØBut: excludes - trivial information; experience and skills gained by
workers in the normal course of employment; information generally
known or readily accessible to persons within the circles that normally
deal with the information (Recital 14)
ØMore protection possible, provided that provisions limiting scope of
protection are respected (Art. 1.1)
Trade Secret?
• Wedding information commercially
valuable because it is a secret
• Security measures and notices to keep it
a secret

But:
Business information? Technological
information? Know-how?
(Non-) Trivial information?
Trade secret’s holder
• Article 2(2): any natural or legal person lawfully controlling a
trade secret – no property considerations
üPersons who are commissioned to create the TS for
someone else?
üJointly created TS?
üLicensees?
Trade secret protection – art. 4
Unlawful acquisition, use and disclosure
Ø Unlawful acquisition = unauthorised access, appropriation or copying +
any other conduct contrary to honest commercial practices
Ø Unlawful use and disclosure = unlawful acquisition of trade secret;
breach of confidentiality agreement or non-disclosure obligation;
breach of contractual duty to limit the use of the trade secret
Ø Unlawful acquisition, use or disclosure = when the person knew or
ought to have known that the trade secret was obtained from another
person who unlawfully used/disclosed it
Outside of trade secret protection – art. 3.1
Lawful acquisition
Ø independent discovery or creation
Ø observation, study, disassembly or testing of a product or object that
has been made available to the public or that is lawfully in the
possession of the acquirer of the information
Ø exercise of the right of workers or workers' representatives to
information and consultation in accordance with Union law and
national laws and practices;
Ø any other practice which, under the circumstances, is in conformity
with honest commercial practices.
Outside of trade secret protection – art. 3.2
Lawful acquisition, use and disclosure
Ø“The acquisition, use or disclosure of a trade secret shall be
considered lawful to the extent that such acquisition, use or
disclosure is required or allowed by Union or national law.”
ØExample: statutory audits (Recital 18)
ØWithout prejudice to confidentiality obligations (Recital 18)
Exceptions – art. 5
ØExercising the right to freedom of expression and information
ØWhistle-blowing (may include cases of “wishful whistle-blowers”)
ØDisclosures by workers to their representatives to exercise their
rights
ØProtecting a legitimate interest recognised by law
 Balance of trade secret protection with other
interests
(1)Freedom of expression and information (Recital 19, Arts. 1.2.(a) and 5(a)): not
to be restricted, “in particular with regard to investigative journalism and the
protection of journalistic sources.”
(2)Innovation and competition (Recital 16 ): “In the interest of innovation and to
foster competition, the provisions of this Directive should not create any
exclusive right to know-how or information protected as trade secrets.”
• Independent discovery of the same know-how or information
• Reverse engineering of a lawfully acquired product (except when
otherwise contractually agreed, but the freedom to enter into such
contractual arrangements can be limited by law)
Balance of trade secret protection with other interests
(3) General public interest (Art. 5(b)): no sanction when acquisition, use or
disclosure of TS reveals revealing misconduct, wrongdoing or illegal activity for
purposes of protecting the general public interest (“whistle-blowers”)
(4) Mobility of workers (Art. 1.3): not to be restricted; employees use of
experience and skills honestly acquired cannot be limited
(5) Other workers rights (Art. 5(c)): disclosures by workers to their
representatives are allowed, if necessary to exercise their rights
(5) “Honest commercial practices” (Art. 3(d)): any practice which, under the
circumstances, is in conformity with “honest commercial practices” will be a
lawful acquisition.
REVISIONS AND Q&A
Your client Rogier Sol is the owner of a video production
company called “Better Call Sol”, based in Amsterdam. In
his website, he has the following disclaimer:

*Not based in Albuquerque, but in Amsterdam.

Better Call Sol is in no way related to the Netflix show
‘Better Call Saul’, but we really wish we were. If you have
some time off, love good filmmaking, and want to binge-
watch one of the best series ever made; go watch Better
Call Saul on Netflix tonight.

He wants to apply for an EU trademark in Class 41

(Education; providing of training; entertainment; sporting
and cultural activities). He wants to register both a word
mark (“Better call Sol”) and the logo of his company,
depicted above.

Assess the likelihood of success of these

registrations, considering that the producers of the
show Better Call Saul are already the owners of a
valid EU trademark in several classes (including class
41) for the sign “Better Call Saul” and for the logo
depicted below.
Learn English Inc. is an American company that publishes the Learn English
World Report – a compilation of more than 1000 names and contact
details of British Schools operating in several countries of the world,
including the US, Canada, China, Japan, Singapore, and all the Member
States of the European Union.

My Favourite School Inc is also an American company, which has copied

around 100 entries from the Learn English Inc. Compilation to make its
guide entitled “The best places to learn English in the EU”.

Both companies have registered offices in Ireland.

Advise Learn English Inc as to its legal position

Julian is a software engineer who created a computer programme that translates
about 90 languages into emoticons. He sells the programme on his website.
Against the payment of 200 Euro, users can download the programme. The
terms of the license say that the right to use the programme is valid for 80
years, and that for the rest legal provisions shall apply.
Anne, a visual designer, downloads the programme and pays the 200 Euro fee. She
is a bit disappointed that the programme only runs on her Microsoft-operated
desktop, but not on her Macbook. She then decides to adjust the programme so
that it runs on her Macbook as well (a practice also known as “porting”).
Moreover, she uploads a copy of the programme onto a reserved area of her
website that she shares only with close friends and family. She asks them all to
download the programme, so that they can start communicating in Emoticon.

Is any of Anne’s actions infringing under the Software Directive and/or case law of
the CJEU?
Gelateria Candiero, an Italian ice-cream shop based in Maastricht,
is growing in popularity – its creamy, rich-flavoured products have
become known in the city and abroad, especially in the Belgian
towns of Liège and Visé, and in Aachen (Germany). Indeed,
people from Liège, Visé and Aachen come to Maastricht during
the weekend with the sole purpose of buying icecream.
Underlying Candiero’s success is undoubtedly the natural and
fresh ingredients used in their products; but also a secret recipe
known only to the owner, Helena Sanvicente, and to two highly
trained employees: Giuseppe and Giancarlo. Giancarlo however
quit his job and decided to open his own ice-cream shop in Visé.
To Helena’s dismay, Giancarlo is using her secret recipe, and
clients from Visé and Liège have shifted to Giancarlo’s shop
because it is more geographically convenient.