Following the adoption of the Directive (EU) 2016/943 of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure, EU Member States are now putting in place reforms aiming to establish a legal protection upon the principles laid down by the TRIPS Agreement (part of the WTO Agreement signed in 1994 at Marrakech).
Adopting a decision n° 2018-768 DC on July 26th, 2018, the Conseil Constitutionnel validated the new regulation protecting trade secrets in France. The Law n° 2018-670 adopted on July 30th, 2018, and related to the protection of trade secrets therefore modify some dispositions of the Code de commerce and sets up a clear definition of information protected by trade secret.
Consequently, any piece of information shall be protected as a trade secret if:
- The information is not generally common knowledge or easily accessible for people familiar to this type of information per their line of business; or
- The fact the information is secret gives it a commercial value, actual or potential; or
- The owner of the information has set up reasonable measures in order to keep it secret.
The information protected as a trade secret can be legally or illegally obtained. Therefore, the new Law introduces a notion of a legitimate holder who de facto is legally controlling such a protected information. Since then, a trade secret can be legally obtained thanks to an independent discovery or creation or also subsequently to the analysis of a product available to the public or, at least, legally available, except any contractual prohibition to disclose such a trade secret.
Conversely, a trade secret is illegally obtained if the legitimate holder did not express any consent (e.g. a non-authorized access to a support carrying the trade secret or elements allowing to discover it, or any illegal copy of any of these elements). Furthermore, any behavior which may be seen as unfair or breaking commercial usages shall constitute the acquisition of a trade secret by illegal means.
However, the fact that a trade secret has been legally obtained does not grant any right of use or disclosure. Any use or disclosure of a trade secret must be done by a person who legally obtained it and had a specific consent from the legitimate holder to use or disclose it. Also, a legally-obtained trade secret used or disclosed despite a contractual limitation breaks the Law. Any operation of production, release or exportation of any product significantly resulting from a breach of trade secret regulation is an illegal use is the person was aware this use was actually illegal.
At last, any acquisition, use or disclosure of a trade secret is also illegal if the person knew or should have known regarding circumstances that such a trade secret had been directly or indirectly obtained from another person who was using or disclosing it illegally.
Nevertheless, this protection is not absolute. The new Law also introduces some exceptions. Trade secret protection is not granted if to acquire such an information, use it or disclose it is required or authorized by European or national law. Moreover, during a judicial proceeding, a trade secret cannot be used if use or disclosure of a trade secret has been done in good faith and according to the freedom of expression, in order to reveal an illegal activity to protect public interest. Similarly, trade secret protection cannot be used to bar early warning rights or in the context of protection of legitimate interest acknowledged by European or national law.
Lastly, trade secret cannot be used regarding specific right of information and consultation allowed to employees or unions. Likewise, disclosure of a trade secret by employees or unions cannot be interpreted as a breach if done in the context of professional responsibilities of some employees or unions. In this case, the information remains a trade secret for the rest of the staff or unions.
Because trade secrets are now formally protected by law, judicial actions can be started in order to prevent, end or get damages for breach of trade secret, as a civil liability. Also, the court can prescribe any adequate measure to avoid or end the breach.
This reform is a major evolution for French law regarding trade secret protection. This new legal protection is crucial, especially for businesses involved in innovation or strategic activities.
