Trade Secrets Litigation Trends in the EU

This report is produced in accordance with Article 18 of Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure. The report consists of three components: a quantitative analysis, a qualitative analysis, and a collection of case summaries. The quantitative analysis is based on statistical trends observed in approximately 700 judgements in the study period. It finds that trade secrets litigation diverges significantly across Member States in terms of case volumes and legal fora. European trade secrets litigation tends to be highly localised at the national level, with cross-border disputes remaining relatively rare. Disputes over trade secrets tend to be concentrated between employers and (former) employees; disputes with third-party businesses tend to be relatively less common. Unfair competition law also continues to be commonly used as a complementary field of law to enforce against actions where trade secrets rights are invoked. The analysis also reveals that, although the economic literature tends to focus on the role trade secrets play in technical innovation, trade secrets law tends more often to concern litigation over commercial information rather than technical information. While manufacturing is the sector most often implicated in litigation proceedings, the commercial sectors implicated specifically in litigation over commercial information are very diverse. This confirms the important role that trade secrets play in all sectors of the economy, particularly where commercial information is involved. The qualitative analysis provides a theoretical discussion on the interpretation of the definition of trade secrets, unlawful acts, the measures granted under the Directive, and the principle of proportionality. Three main trends are identified in this analysis. First, significant developments are noted in the interpretation of the ‘reasonable steps’ requirement for the definition of ‘trade secret’ under Article 2(1) of the Directive. These developments suggest that the requirement is to be understood as flexible and context-specific, based on the value of a trade secret, as well as the size and business sector of the trade secret holder. Second, litigation trends suggest that, for information to be protected under trade secrets law through contractual measures such as confidentiality agreements, it is crucial for the specific objects of protection to be clearly identified. This is an important finding, as it has direct implications for companies’ standard contractual practices, in particular between employers and employees. Third, the issue of procedural measures for preserving the confidentiality of trade secrets during litigation must be given due attention.