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Trade Secrets in the EU

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Trade Secrets in the EU

This course introduces American lawyers to trade secret protections in the European Union. Trade secrets—broadly defined under E.U. law as information that derives commercial value from its secrecy, and for which reasonable protections have been taken by the holder to preserve that secrecy—have, since 2018, benefited from a uniform set of protections across E.U. Member States. This is thanks to a European Directive, “Directive (EU) 2016/943 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure.” The present course will discuss the Directive’s origins, it scope and purpose, and the primary exceptions to trade secret protections in the E.U.

Transcript

- Hello, everyone. I am pleased to be with you today to discuss trade secret protections in the European Union. My name is Johanna Schwartz Miralles. I am of council at Delcade, a boutique French business law firm with offices in Paris, Bordeaux, Lille and Biarritz. Today's course is designed to be a broad overview of general principles applicable to trade secret protection in the EU. As we'll see in today's discussion, it is possible to discuss general principles applicable to trade secret protection within the European Union because the EU has enacted a directive that requires member states to adopt a common set of rules governing trade secrets. So while the specific legal rules that govern the acquisition, use, and disclosure of trade secrets within the EU will be found in each member states' national laws which all vary in some ways. Those rules will also exhibit a high degree of uniformity, a common core, if you will of baseline rules and principles across EU member states. The goal of today's discussion is to review those common rules and principles which come from the EU Trade Secrets Directive. To that end, today's discussion first will cover the directives origins. We'll then talk about the directives contents, including what constitutes a trade secret, what constitutes a trade secret violation, and what remedies exist for violations. So just by way of background to the directive, the legal regime that is currently in place dates from 2016, and that is when the EU passed the trade secrets directive whose official name is Directive Number 2016 943 of eight June, 2016 on the protection of undisclosed knowhow and business information trade secrets against their unlawful acquisition use and disclosure. That's quite a mouthful. Prior to 2016, each of the EU member states as well as the EU itself were party to the agreement on trade related aspects of intellectual property rights better known as the TRIPS Agreement. And TRIPS established some basic baseline obligations for signatory states in terms of trade secret protections. These obligations are found in Article 39 of TRIPS which basically does three things. So first, Article 39 defines trade secrets. The definition which we'll see is essentially retained in the European directive, establishes that a trade secret is any "information that 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." So that's part one, A. 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. So there's the TRIPS' definition of a trade secret. Second, Article 39 requires signatories to put into place legal protections for trade secrets, but the agreement is not particularly specific regarding the extent of these legal protections nor the manner in which member states must approach their implementation or enforcement. Article 39 merely provides that, "natural and legal persons "shall have the possibility of preventing trade secrets "from being disclosed to, acquired by, "or used by others without their consent "in a manner contrary to honest commercial practices." So you might think of breach of contract or breach of confidence. Third and finally, Article 39 requires signatory states to provide effective protection for trade secrets that have been disclosed to government entities in connection with certain regulatory approval or oversight activities. But of course these obligations regarding trade secret protections are not particularly onerous nor are they very detailed. And the result in Europe is that member states' laws displayed wide divergences in the nature and scope of trade secret protections, including divergence regarding the definition of trade secrets, remedies available for their unlawful attention use and disclosure, and then procedural protections for trade secrets during litigation. Moreover in the last decade, European legislators like their American counterparts have become increasingly concerned about trade secret theft and in particular misappropriation by foreign entities. As the directives drafters put it in the texts' preamble, "Innovative businesses are increasingly exposed "to dishonest practices "aimed at misappropriating trade secrets, such as theft, "unauthorized copying, economic espionage, "or the breach of confidentiality requirements "whether from within or from outside of the Union. "Recent developments such as globalization, "increased outsourcing, longer supply chains, "and the increased use of information "and communication technology "contribute to increasing the risk of those practices." That's the end of the quote. The misuse of trade secrets is obviously a problem for economic growth because again, as the drafters of the directive put it, trade secrets allow creators and innovators to derive profit from their creation or innovation and therefore are particularly important for business competitiveness as well as for research and development and innovation related performance. Moreover, the unlawful acquisition use or disclosure of a trade secret compromises the legitimate trade secret holders' ability to obtain first mover returns from their innovation related efforts. As a consequence of these concerns, the importance of trade secrets to business growth and economic prosperity, the increasing frequency and effectiveness of attacks targeting confidential business information, and then the lack of harmonization of EU member states laws in this area inspired EU legislators to adopt the 2016 Trade Secrets Directive. It's probably worthwhile to take a few minutes to talk about what a directive is under EU law because this kind of legal instrument may not be familiar to the American lawyer. A European directive is essentially a statute adopted by the EU that sets forth baseline rules in a particular field, but leaves some amount of discretion to member states in determining exactly how to give effect to those rules. So said another way, a directive is a legislative instrument that is binding on member states as to the result to be attained, but that leaves member states free to determine the form and methods of attaining those ends. So in a way, a directive is kind of like a model law, but it's different from a model law because it must be adopted by the EU member states and it can be modified similarly to a model law, I suppose, but it can be modified, but so long as any modifications don't contravene the terms of the directive. So that's where it differs again from a model law. A model law can be amended in any way, you know, that state legislators would like, whereas the directive contains provisions that must be adopted, must be implemented by the member states. Now one other point and this is important. Countries are free to adopt rules that are more protective than what's required by a directive, but the rules that the member states adopt must be at least as stringent as those the directive sets forth. So a directive sets a floor, not a ceiling. And as the preamble to the trade secrets directive puts it, the rules set forth in the directive are, "without prejudice to the possibility for member states "of providing for more far reaching protection "against the unlawful acquisition, use, "or disclosure of trade secrets "as long as the safeguards explicitly provided for "in this directive for protecting "the interests of other parties are respected." And we'll talk a bit later on about what the drafters are referring to when they reference certain safeguards protecting the interests of other parties. Also by way of background, with respect to directives, EU member states are responsible for what's called transposing a directive. Transposing means adopting legislation and or regulations that make the baseline rules set forth in the directive part of the member state's domestic law. Each European directive sets a deadline for its transposition, and in the case of the Trade Secrets Directive, member states were supposed to transpose it on or before June 9th, 2018. So about four years ago. So essentially when you are trying to figure out what a particular European country's legal rules are on trade secret protections, you're going to look at the provisions of that country's domestic law, but those provisions should be consistent with the directive and there are sometimes effective remedies that can be sought in case there aren't. Also domestic law provisions can be interpreted in light of a directive where they might be ambiguous or not entirely facially consistent with a directive. So I hope that helps us to understand the relationship between a directive and the member states' law that has resulted from the transposition of a directive. With that background, I'd like to turn now to the Trade Secret Directives specific provisions. And it makes sense of course to begin with the definition of a trade secret, which is found in article two of the text and which is identical to the definition of trade secret in the TRIPS Agreement that we discussed several minutes ago. Again, that definition provides that a trade secret is information that is a secret in the sense that it's not generally known or readily accessible to persons within the circles that normally deal with information of that type, B, has commercial value because of its secrecy, and then C, has been subject to reasonable steps under the circumstances by the person lawfully in control of the information to keep it secret. The definition, oh, sorry. The preamble to the directive explains that this definition should be construed broadly, "so as to cover knowhow 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." So what is the legitimate interest in keeping information confidential? Well, it's the one set forth in the second prong of the definition of trade secrets. That is the commercial value of the non-public information. The directive's preamble explains that information could have commercial value due to its secrecy when, for example, its unlawful acquisition use or disclosure is likely to harm the interests of the person lawfully controlling it in that it undermines that person's scientific and technical potential, business or financial interests, strategic positions, or ability to compete. This does not include however, trivial information nor, "the experience and skills gained by employees "in the normal course of their employment." So the drafters of the directive wanted to be careful not to place restrictions on undue restrictions on employees in their ability to go and work for other companies. An employee's own skills and experience cannot be protected as a trade secret. So what then constitute reasonable steps to keep this information, this valuable information secret? The notion of reasonable steps is not defined in the directive nor is it really given any meet in the directive's preamble, but there are a few general principles that I think courts are likely to apply. So access to information should be limited to those who have a need to know. Internally this means only distributing physical or electronic copies of sensitive information to those whose roles within the organization require them to have access. It also means probably password protecting and encrypting this information internally and then keeping any physical copies of the information in locked storage. Trade secrets should also be shared with third parties parsimoniously and always obviously subject to confidentiality, thorough confidentiality agreements. Precautions should also be taken if trade secrets need to be shared with judicial or administrative authorities including requesting appropriate non-disclosure undertakings and then requesting that court filings be made ex parte where available or under seal. And of course these best... These are best practices. They should be adapted to the needs of the particular organization, but they should be implemented worldwide because a European court is going to look at the policies and procedures that have been put into place by a company organization wide, and so even if some of these issues are dealt with in Europe. So I'm just thinking for example and we'll see this later on in the presentation of the procedural protections that are available during litigation within the EU, those tend to be automatic. In some jurisdictions outside the EU they may not be automatic and so a litigant would want to be very careful to request the kinds of procedural protections that would keep the confidential information secret in the context of litigation anywhere in the world. Now these best practices, these factors that a court in Europe will likely consider in determining whether reasonable steps have been taken to preserve a trade secret. They have born out in some cases, decided by courts in EU member states. So in the Spanish case, civil judgment number 441 of 2016, decided by the Provincial Court of Madrid, the court held that insufficient steps had been taken to preserve a trade secret. And the court added that sufficient steps would have included measures to prevent access by third parties and limitation of internal access to those within EU to know. So some of the factors we discussed. And the Austrian Supreme Court invoked similar principles in its decision number four of 25th, October, 2016, but actually reached an opposite outcome finding that the party seeking trade secret protection had taken sufficient steps to protect its confidential information where the information had been password protected and an access log had been maintained and the information was shared on a need-to-know basis only. Just a very quick final note on the reasonable steps prong of the definition before moving on. So you'll notice that the text of the third prong requires that to be considered a trade secret information has to be, "subject to reasonable steps "under the circumstances "by the person lawfully in control of the information "to keep it secret." This definition is similar, but not identical to the one under 18 USC Section 1839, which extends the scope of trade secret protections only if, "the owner of the information has taken reasonable measures "to keep such information secret." So it's the owner of the information. And so one difference between the European definition and the operative definition under US federal law is who is responsible for taking reasonable steps. Under US law we look to whether the owner has taken reasonable steps, but the directive requires those reasonable steps by the person "lawfully in control of the information." And so in my mind, this could be read to extend the requirement that reasonable steps actually be taken to any third person to whom the information has voluntarily or otherwise lawfully been disclosed by the trade secret holder. So for example, business partners, government authorities, contractors. So I think it's particularly important in Europe to make sure that safeguards are in place and are being followed by third parties before making any disclosure of trade secrets to them. And, you know, regular follow up depending on the how sensitive the trade secret is, regular follow up could be warranted. So just to go a little deeper on the use of confidentiality clauses and agreements. If you choose to protect a trade secret via a confidentiality agreement or clause, one issue to look out for is how the duration of the confidentiality obligation affects the enforceability of that obligation. So in some continental legal systems, including under French law, for example, confidentiality agreements that are not somehow limited in time are likely to be held unenforceable. And so what this means is that, in drafting your confidentiality agreement in support of trade secret protections, you will want either to include a specific time limit for example, 10 years or if not a specific time limit, then a triggering event that will put an end to the party's obligations. So a clause that would have the effect of reasonably protecting trade secrets while avoiding the kinds of unenforceability problems that might arise out of obligations of an indefinite duration would be one that would put an end to the duty of confidentiality at such time as the confidential information became known to the public. So that could be the event that triggers the end of the confidentiality obligation such that that obligation would then be enforceable in these jurisdictions that dislike indefinite duties of confidentiality. Just to add to that point, in order to avoid losing protections if a trade secret should be stolen, leaked or otherwise wrongfully disclosed, it is useful to include language to the effect that this confidentiality duty continues until such time as the information becomes publicly known other than through a breach of law or contract. So now that know what a trade secret is, we need to know what protections trade secrets receive. And this in turn requires asking ourselves two questions. First, what conduct is prohibited with respect to trade secrets and second, what are the remedies for a violation? Now in terms of prohibited conduct, the Trade Secret Directive does not include a catchall term like misappropriation to describe what is prohibited. For those of you who are familiar with The Defend Trade Secrets Act and the Uniform Trade Secrets Act, you'll recall that this is the approach that the drafters of those texts took. Rather, the directive provides that the unlawful "acquisition, use or disclosure of a trade secret "is prohibited." Unlawful acquisition is defined under Article Four, paragraph two of the directive and that definition is as follows, "The acquisition of a trade secret "without the consent of the trade secret holder "shall be considered unlawful whenever carried out by "A, unauthorized access to, appropriation of, "or copying of any documents, objects, materials, "substances, or electronic files lawfully under the control "of the trade secret holder containing the trade secret "or from which the trade secret can be deduced "or B, any other conduct which under the circumstances "is considered contrary to honest commercial practices." Now unlawful use or disclosure is defined under article four, paragraph three, which provides "the use or disclosure of a trade secret "shall be considered unlawful whenever carried out "without the consent of the trade secret holder "by a person who is found to meet "any of the following conditions, "A, having acquired the trade secret unlawfully, "B, being in breach of a confidentiality agreement "or any other duty not to disclose the trade secret "or C, being in breach of a contractual duty "or any other duty to limit the use of the trade secret." Being an accessory to the unlawful acquisition, use or disclosure of a trade secret can also give rise to liability. So article four, paragraph four of the directive tells us that the acquisition use or disclosure of a trade secret shall also be considered unlawful whenever a person at the time of the acquisition use or disclosure knew or ought under the circumstances to have known that the trade secret had been obtained directly or indirectly from another person who was using or disclosing the trade secret unlawfully. Paragraph five of article four goes on to prohibit the production, offering, or placing on the market of infringing goods or the importation, export or storage of infringing goods for those purposes where the person carrying out such activities knew or ought under the circumstances to have known that the trade secret was used unlawfully. So we now know that the acquisition, use, or disclosure of a trade secret is unlawful where it was done via unauthorized access to the trade secret by subterfuge or other unsavory commercial practices in violation of law or contract or by someone who knew or reasonably ought to have known that the trade secret was acquired or was being used or disclosed unlawfully. But the directive is careful to carve out conduct from the scope of its prohibitions. This is for two reasons broadly speaking. First, so as not to stifle legitimate economic activity. And second, so as not to stifle legitimate forms of free expression. These carve outs are found in two articles, article three and article five. Article three deals primarily with legitimate competition. Whereas article five deals mainly with free speech concerns. So article three states that, "The acquisition of a trade secret "shall be considered lawful "when the trade secret is obtained "by any of the following means, "independent discovery or creation, "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 who is free "from any legally valid duty to limit the acquisition "of the trade secret." So engineering that's not in violation of a confidentiality or non-use obligation. The exercise of the right of workers or workers representatives to information and consultation in accordance with union law and national laws and practices or any other practice which under the circumstances is in conformity with honest commercial practice. Also the acquisition use or disclosure of a trade secret is lawful if it's required or allowed by union or national law. So I wanna pause for a minute to highlight a couple of exceptions in particular the ones under sub paragraphs 1 A and 1 B which protect independent discovery or creation on the one hand and reverse engineering on the other. These carve outs will be familiar to American lawyers because the same ones exist under the Defend Trade Secrets Act and the UTSA. The directive also carves out certain kinds of conduct under article five, this time with the objective of protecting freedoms of speech and association, indeed when European legislators began to draft the Trade Secrets Directive, they received substantial pushback from civil society groups who were concerned about the chilling effects of new protections for trade secrets on various forms of legitimate and socially desirable speech. Among the most vocal opponents of enhanced trade secret protections were first, journalists who worried that they would face increased risk of liability for publishing information that later was alleged to be a protected trade secret, and second, whistleblower protection advocates who opposed the legislative initiative on similar grounds relating to the risk of gagging legitimate whistle blowing. So as a result of these concerns and others, the directives drafters included article five which excludes from the directive's scope certain kinds of information namely, the directive tells us that member states must ensure that an application for the measures procedures and remedies provided for in the directive must be dismissed where the alleged acquisition use or disclosure of the trade secret was carried out for A, the purposes of exercising the right to freedom of expression and information as set out in the charter. So that's the European Charter of Fundamental Rights, including respect for the freedom and pluralism of the media. So that's the kind of press exception. B, for revealing misconduct, wrongdoing, or illegal activity provided that the respondent acted for the purpose of protecting the general public interest. So that's the whistleblower exclusion. C, disclosure by workers to their representatives as a part of the legitimate exercise by those representatives of their functions provided that such disclosure was necessary for that exercise. So that's a kind of union and labor representation exclusion. And then finally for the purpose, this is D, for the purpose of protecting a legitimate interest recognized by union or national law. And that's a kind of catchall provision. I think it's important to underscore the language of the first paragraph of this article. So in particular, the language that says, member states shall ensure that an application under the directive is "dismissed where the acquisition use "or disclosure of the trade secret falls within "one of those listed categories." This language is of course, subject to interpretation and to the particularities of each member state's rules of civil and criminal procedure. But I think it is reasonable to interpret the language as inciting member states to put into place a kind of anti slap procedure that allows for expedited consideration and dismissal of lawsuits that allege trade secret violations where the use or disclosure of the claimed trade secret falls within one of the categories we've just discussed. It's also unclear whether member states can or cannot restrict the manner in which trade secrets can legitimately be disclosed. So said another way, can a member state's law legitimately require a whistle blower, for example, not to publicly disclose information that may constitute a trade secret instead requiring disclosures for example, only to government authorities. This latter question was actually addressed in a different text, the EU Whistleblowing Directive of 2019, and the answer that that text gives is that there is no absolute restriction on public disclosures so long as the whistleblower had reasonable grounds to believe that the whistle blowing was necessary for revealing a breach of EU law. So we've now covered the definition of a trade secret and what constitutes unlawful behavior with respect to those trade secrets. Now we can turn to remedies which include preliminary injunctions, damages, permanent injunctions, and the publication of judicial opinions. So let's turn to each of those one by one. With respect to preliminary injunctions, the directive requires member states to incorporate into their rules of civil procedure the possibility for courts to grant preliminary injunctions in trade secret actions. The directive refers to such injunctive relief as "provisional and precautionary measures." So when you read provisional and precautionary measures, you can think preliminary injunction. The types of preliminary injunctive relief that can be afforded pursuant to the directive are broad. So they include injunctions temporarily prohibiting the use or disclosure of a trade secret, injunctions against producing, selling, or offering to sell, importing, exporting or storing goods produced in violation of trade secret protections, and the seizure of infringing goods so as to prevent their entry into or circulation on the market. Member states must also give their courts authority to issue orders requiring an alleged infringer to give security in order to continue using a trade secret pending a final decision on the merits. This is in article 10, paragraph two which provides member states shall ensure that judicial authorities may as an alternative to the various kinds of injunctive relief we just talked about, make the continuation of the alleged unlawful use of a trade secret subject to the lodging of the guarantees intended to ensure the compensation of the trade secret holder, but disclosure of a trade secret in return for the lodging of guarantees shall not be allowed. So this procedure is only available for continued use not for new disclosure of a trade secret. To secure a preliminary injunction, the plaintiff has to make out a kind of prima facie case that a trade secret exists and has been violated. And this is a kin, you can think of this as like a showing of a likelihood of success on the merits. And this is pursuant to article 11 paragraph one of the directive which reads as follows, "Member states shall ensure that judicial authorities have "in respect of the measures referred to in article 10." So these preliminary injunctions. "The authority to require the applicant to provide evidence "that may reasonably be considered available "in order to satisfy themselves "with a sufficient degree of certainty that, "A, a trade secret exists, "B, the applicant is the trade secret holder, "and C, the trade secret has been acquired unlawfully, "is being unlawfully used or disclosed "or unlawful acquisition use "or disclosure of the trade secret is imminent." The directive also sets up a balancing test for determining whether the interests at play properly weighed support granting a provisional or precautionary measure. So the factors that are to be weighed in the balancing test are set forth in article one, paragraph two. And that provision says that, "Member states shall ensure "that in deciding on the granting "or rejection of an application for a preliminary injunction "and assessing its proportionality." So it's desirability, "The competent judicial authorities "shall be required to take into account "the specific circumstances of the case "including where appropriate "the value and other specific features of the trade secret, "the measures taken to protect the trade secret, "the conduct of the respondent in acquiring, using, "or disclosing the trade secret, "the impact of the unlawful use or disclosure "of the trade secret, "the legitimate interests of the parties "and the impact which the granting "or rejection of the measures could have on the parties, ""the legitimate interests of any third parties, "the public interest, "and finally the safeguard of fundamental rights." So that's a multifactor balancing test. The possibility of seeking interim relief is obviously a boon to trade secret holders and important in context where secrecy could be compromised or other irreparable harms could result. So all of these procedural... All these procedural mechanisms that we've just discussed are important obviously to trade secret holders and to the protection of their interests. But the directive also takes into account the interests of the defendant and the possibility that trade secret actions could be affirmatively brought as a means of suppressing legitimate competition. And so the directive enshrines a set of procedural protections for defendants in injunctive relief actions. These procedural protections include a requirement that courts lift the injunction if the plaintiff has not filed a complaint on the merits within a set period of time or so again, a requirement that courts lift the injunction if the information ceases to meet the definition of a trade secret. The directive also requires member states to authorize their courts to order plaintiffs to post security in order to obtain an injunction and courts have the authority to award damages in the event that an injunction is granted, but ultimately found not to have been warranted. Turning now to... Turning now to remedies for a judgment on the merits. As mentioned before, there are several remedies that the directive puts in place and we'll list them here first and then go into a little bit greater detail over the course of the next few slides. So the directive's remedies in case of a final decision on the merits are as follows damages, permanent injunctions, and then the publication of judicial decisions. So with respect to damages, the directive leaves member state's substantial discretion in determining what kinds of damages can be awarded in trade secret actions. There are however a few baseline rules that the directive sets up. The first is that any damages award must fully compensate the plaintiff for the plaintiff's loss. So that's the general principle, full compensation. Courts can however use a variety of measures to calculate damages. These could include, for example, a plaintiff's lost profits or loss of opportunity, the defendant's gain so like a discouragement type remedy or the approximate amount of royalties or fees that would've been owed by the defendant had the use of the trade secret been authorized. So licensed, for example. A damages award should also take into account, must also take into account other incidental or consequential damages that the plaintiff may have sustained. Now, if the general principle under the directive is full compensation, there is one instance where that general principle gives way and that is in cases where the infringer, the defendant is an employee of the plaintiff. And in such cases, the directive allows member states to authorize their courts to reduce a damages award so long as the employee acted, "without intent" but the directive doesn't specify a standard for intent here. So one might ask oneself whether this means simply an intent to use or disclose the information in question or whether without intent means the intent to use or disclose information that the employee knew or reasonably should have known, for example, to be a trade secret. And so the kind of intent that is required has to be resolved by member state's domestic legislation and courts. And just briefly to conclude on damages. Again, the only hard and fast damages rule is that the damages award has to be adequate to compensate the plaintiff for the plaintiff's losses. And then again, with this exception we just discussed for damages awards rendered against employees who acted without intent. And so because of this broad discretion that's given to member states in terms of the manner of calculating damages, figuring out what measure of damages a particular court will use will depend on the provisions of that member state's domestic law and that will be where you'd want to look to figure out how damages will be calculated in a particular lawsuit. So turning now to permanent injunctions. The kinds of permanent injunctive relief that are available include the ones we saw when we discussed preliminary injunctions. So that is injunctions prohibiting the use or disclosure of a trade secret and injunctions against producing, selling, offering to sell, importing, exporting, storing goods produced in violation of trade secret protections. So those are the first set of types of injunctive relief that were available both in the preliminary and in the permanent injunctive context, but permanent injunctive relief can also include the following and this is... This differs from the preliminary injunction rules. So recall of the infringing goods from the market, depriving the infringing goods of their infringing quality. So for example, modifying goods to remove an offending component, destruction of the infringing goods or where appropriate their withdrawal from the market provided that the withdrawal does not undermine the protection of the trade secret in question, and finally, destruction of all or part of any document, object, material, substance or file containing or embodying the trade secret or where appropriate the delivery up to the applicant of all or part of those documents, objects, materials, substances or electronic files. And the infringing party generally bears the costs associated with carrying out these measures. In deciding whether to award permanent injunctive relief, courts are to apply a balancing test using the same factors as under the preliminary injunction balancing test. And like in the preliminary injunction context, any permanent injunctive relief can extend in time only so long as the trade secret remains a trade secret. So it has to continue to meet those three criteria in the definition of trade secret and the order granting permanent injunctive relief has to impliedly or expressly come to an end if any of those three criteria are no longer met, except through no fault of the trade secret holder. Just one final point with respect to permanent injunctions. Article 13, paragraph three of the directive specifies that courts should have the discretion to award damages in lieu of permanent injunctive relief if the defendant can make a certain showing, and here's the showing that the defendant would have to make. So the defendant, first of all, has to make a request that the court award damages rather than an injunction and then the defendant has to establish that A, the person concerned at the time of use or disclosure neither knew nor under the circumstances ought to have known that the trade secret was obtained from another person who was using or disclosing the trade secret unlawfully. So this only applies to people who we called accessories to a trade secret violation not to the person who originally used or misappropriated the trade secret knowingly and kind of approximately. So B, the execution of the measures in question would cause that person disproportion at harm and see a pecuniary compensation to the injured party appears reasonably satisfactory. So of course, in challenging this kind of request a plaintiff would want to establish that the defendant knew or ought to have known that the use disclosure was unlawful and probably assert, you know, strongly argue that the providing damages would not be sufficient to compensate and or protect the trade secret holder. Just a final note on this special procedure, in a case where the court is being requested to award damages rather than a permanent injunction, if the court decides to award damages, the quantum of damages shall not exceed the amount of royalties or fees which would've been due had the defendant requested authorization to use the trade secret for the period of time for which the use of the trade secret could have been prohibited. So there's a cap there on the amount of damages that can be awarded. So finally, in our remedies section we covered damages, we covered permanent injunctions. So now with respect to our final remedy, which is the publication of judicial decisions. As you may or may not know in some European jurisdictions, there is a presumption that judicial decisions will be anonymized before publication. And the result of course, is that the public may not have, probably does not have access to information about the identity of the litigants involved. And this is obviously for reasons involving protecting reputations. You can... We can argue about whether it's socially desirable or socially undesirable, but this often confidential nature of legal judgements helps explain article 15 of the directive which provides that, judges must be authorized to order the publication of information about judgments holding that there has been a trade secret violation. This publication is to be at the expense of the infringer and the directive tells us that the publication can be of the entire opinion or excerpts of the opinion or even kind of summaries thereof. Now, the directive requires that in order to determine whether to order publication, judges have to engage in a balancing test and, you know, European legislators and courts are very, very fond of balancing tests proportionality. And this balancing test has to take into account "where appropriate the value of the trade secret, "the conduct of the infringer in acquiring, using, "or disclosing the trade secret, "the impact of the unlawful use "or disclosure of the trade secret, "and the likelihood of further unlawful use "or disclosure of the trade secret by the infringer." Moreover, and consistent with European practices which are much more protective of litigants identities than we are used to in the US, in determining whether to issue a publication remedy, judges have to take into account whether the publication would cause harm to the defendant. So the text says that the judge has to consider whether the publication could cause a natural person to be identified and if so whether the publication of that information would be justified in particular in the light of the possible harm that such measure may cause to the privacy and reputation of the infringer. So this is a added protection for defendants who are natural persons and would not on its face apply to legal persons only. So in the event that publication is ordered, then this obviously makes sense in light of the overall purpose of the directive to protect trade secrets. If a judge orders the publication of an opinion or excerpts or summaries thereof, the judge has to ensure that no trade secret is there by disclosed which leads us to our final point for today. So the drafters of the directive were solicitous of trade secret holders and understood that a disclosure risk can accompany filing affirmative litigation to protect trade secrets. So the drafters included in the directive requirements that trade secrets receive protection during litigation and this extends to disclosure by a number of people. So parties, their council, judges, their counsel, judges, court officials, court personnel, experts, and anybody else who may be participating in proceedings. And these protections have to be included again, in the domestic law, domestic procedural law of each member state. Now, the manner in which this protection is implemented can vary from member state to member state. It can include so a judicial order, this is... The directive specifies actually some of the mechanisms that could be used to affect this protection during litigation, and these include judicial orders limiting the sharing of confidential documents or information, holding hearings either in closed court or in camera, and redacting relevant parts of judicial opinions. Of course, these measures only apply... And this is... We saw this above with respect to permanent injunctions. These measures only apply so long as the information truly constitutes a trade secret. So if the information during the course of litigation should become generally known or readily accessible other than through no fault of the trade secret holder. Sorry, strike that. If the information should become publicly known or readily accessible during the course of litigation, then the protection cease to apply and also the measures will only apply as long as there's been no final decision. So as soon as a court has issued a final judgment on the merits saying that trade secret... That the alleged trade secret is not in fact a trade secret at that point these procedural protections that are in place during litigation become moot. So that concludes today's discussion of the EU framework for trade secret protections. Again, this framework can vary in its details that is in the manner in which it's been implemented across EU member states. So it's always advisable to get in touch with local council to determine the precise contours of trade secret protections in your specific jurisdiction. But my hope is that today's discussion has given you a broad background on trade secrets in the EU so that if you're approaching a legal question in an EU member state, you will understand that the general principles that are highly likely to govern trade secret protection and litigation in that member state. I was happy to spend this time with you. If you have any questions or comments, please feel free to reach out to me through my firm's website or by email. And my email is posted on the last slide of the stack. So thanks again, and have a great day.

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