INTERNAL MARKET : COMMISSION PROPOSES TO DEFINE AND PROTECT TRADE SECRETS.

A common definition of trade secrets and means of redress for victims of trade secret misappropriation are the key elements of the directive proposed by the European Commission, on 28 November, with the aim of protecting undisclosed know-how and business information.

The proposal concerns information developed by companies, researchers, inventors or creators that can give them a competitive advantage as "first movers". Information can be technical (manufacturing process or software) or commercial (client or client list) in nature. It can be strategic over the longer term (recipe or chemical compound) or more short-lived (results of a marketing study, name, price and launch date of a new product, price offered in a bidding procedure, etc). Contrary to the holder of a patented invention or the author of a novel protected by copyright, the holder of a trade secret - also referred to as confidential business information or undisclosed information - does not own an exclusive right over the creation. Competitors and other third parties may therefore discover, develop and freely use the same formula. Trade secrets are consequently substantially different from intellectual property rights (IPR), which confer exclusivity.

The Commission notes that, according to a survey carried out in April 2013, one in five companies has been a victim of at least one attempt to steal trade secrets in the last ten years. Another recent poll shows that these figures are going up, with 25% of companies having reported theft of information in 2013 compared with 18% in 2012.

Laws in force in EU states vary widely in terms of the protection they offer against trade secret misappropriation. This fragmentation has a negative impact on cross-border cooperation between business and research partners and is an obstacle to using the EU single market to boost innovation and economic growth.

The directive is intended to give businesses an adequate level of protection and effective means of redress against...