The Act on the Protection of Trade Secrets is about to come into force. What does it mean?
By Reinier W.L. Russell, LL.M.
The Dutch government is currently in the process of implementation of the European Trades Secrets Directive. The Directive aims at protecting non–public company information & knowhow from being obtained, used or disclosed unlawfully.
The Act on the Protection of Trade Secrets (Wet bescherming bedrijfsgeheimen; WBB) will soon enter into force for the purpose of implementation of the Directive. Prior to the entry into force of this Act the European Trades Secrets Directive will have direct effect in the Netherlands.
Trade secrets
The Act on the Protection of Trade Secrets ensures better protection of trade secrets. A trade secret is considered information which is:
- Not known or easily accessible to persons that are usually dealing with the information concerned;
- Of commercial value, as it is secret; and
- Subject to reasonable measures in order to be kept secret.
A trade secret is not necessarily technical knowledge of models or products. Marketing strategies, business plans and trade information fall under trade secrets too.
Obtained, used or disclosed unlawfully
The Act on the Protection of Trade Secrets provides that obtaining a trade secret without the permission of the holder of the trade secret is unlawful if:
- A person has gained unauthorised access to the trade secret;
- A person has taken it unlawfully;
- A person has copied documents, files or suchlike including trade secrets or from which trade secrets can be deduced; or
- Obtaining them is in violation of fair trading.
The Act on the Protection of Trade Secrets stipulates that, the use or making known to the public of a trade secret could be unlawful if the trade secret is used or disclosed without consent of the holder of the trade secret by a person who:
- Has obtained the trade secret unlawfully;
- Violates a confidentiality agreement or another requirement regarding non-disclosure of a trade secret, or
- Violates an obligation restricting the use of the trade secret.
The Act on the Protection of Trade Secrets also refers to situations in which obtaining, use or disclosure of trade secrets can be lawful. For instance, in investigative journalism, which is protected by freedom of expression or regarding disclosure of misconduct, mistakes or illegal activities by whistleblowers.
Safeguarding trade secrets
If a trade secret is obtained, used or disclosed unlawfully, a civil procedure can be initiated in court. The Act on the Protection of Trade Secrets provides that the holder of a trade secret can either apply for measures to the court in interlocutory proceedings or to the ordinary court. That way, suspension of the unlawful use can be imposed or a ban on production issued. Also, the holder of a trade secret may claim damages and full reimbursement of court fees similar to other matters regarding intellectual property.
To be able to show that a trade secret was violated, the trade secret will have to be disclosed, which is not the intention of the holder of the trade secret. By the implementation of the Directive the court can, upon application, specify exhibits as confidential and limit the number of persons with access thereto. In addition, upon request a non-confidential version of the decision can be published online where the parts including trade secrets have been deleted or edited.
The new Act will not make the confidentiality clause in an employment contract dispensable, as this clause may have a broader scope than what is defined as a trade secret in the Act. In the event of theft of trade secrets a report can also be filed with the police in addition to a civil procedure of the Act on the Protection of Trade Secrets.
About the author:
Reinier W.L. Russell, LL.M.
managing partner
Reinier Russell advises national and international businesses on all facets of their day-to-day business operations. He has a broad range of specializations in questions regarding businesses, personnel, real estate, and government. He has been a lawyer since 1990. In addition, Reinier is certified as a mediator.
@: reinier.russell@russell.nl
t: +31 20 301 55 55
