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Express recognition and clarification of the protection of trade secrets in Belgium

25/01/2019
Express recognition and clarification of the protection of trade secrets in Belgium
Photo: Tashatuvango/Shutterstock.com

On 30 July 2018, with a few weeks’ delay, the Belgian legislator transposed the EU Directive 2016/943 on trade secrets (hereafter, the “Directive”) by adopting the law on the protection of trade secrets (hereafter, the “Trade Secret Law”), which entered into force on 24 August 2018.

As expressly stated in the preparatory works, the Trade Secret Law “does not create any new intellectual property rights” (hereafter, “IP rights”), but “only” aims to provide a clear(er) regulatory framework defining the measures, procedures and remedies available to the trade secret holder whose secret has been unlawfully acquired, used and/or disclosed.

Considering that some provisions on trade secrets already existed in different pieces of legislation, the Belgian legislator did not consider it appropriate to provide for any autonomous legislation and decided to transpose the Directive by amending different texts, namely: the Belgian Code of Economic Law (hereafter, the “CEL”), the Belgian Judicial Code and the Belgian Law on Employment Contracts of 30 July 1978. This article will be limited to the review of the main amendments made to the CEL.

Definition of core concepts

One of the notable points of the Trade Secret Law is, in accordance with the Directive's requirements, to have adopted definitions for the core concepts of trade secrets protection:

  • According to Article I.17/1 CEL, a trade secret means not only technical know-how, but any type of information (relating to goods or services) that:
  1. is secret (i.e. is not generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question);
  2. has commercial value because it is secret;
  3. has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.
  • A trade secret holder is defined as any natural or legal person lawfully controlling a trade secret. This person does not necessarily correspond with the initial holder and/or the proprietor of the trade secret, but can for example also be a licensee.
  • An infringer is any natural or legal person who has unlawfully (i.e. without the trade secret holder’s consent and contrary to honest commercial practices) acquired, used or disclosed a trade secret.
  • Infringing goods means goods, the design, characteristics, functioning, production process or marketing of which significantly benefit(s) from trade secrets unlawfully acquired, used or disclosed.

While the adoption of the definitions above is more than welcome, it will probably not end all uncertainties. One may ask, for example, at what point should a good be considered to have “significantly” benefited from a trade secret? The assessment of the accessibility of a trade secret may also raise questions: can any information present on the Internet be considered as “readily accessible”? Thus, many questions are likely to keep the Court of Justice of the European Union busy in the coming years.

(Un)lawful acquisition, use and/or disclosure of a trade secret

The acquisition, use and/or disclosure of a trade secret may only qualify as unlawful when, in addition to taking place without the trade secret’s consent, it falls within one of the situations defined in Article XI.332/4 CEL:

  • direct acquisition, use and/or disclosure contrary to honest commercial practices;
  • indirect acquisition, use and/or disclosure by a third party who “knew or ought, under the circumstances, to have known”;
  • production, placing on the market, etc., of infringing goods by a third party who “knew, or ought, under the circumstances, to have known”.

The Trade Secret Law also defines a number of situations in which the acquisition, use and/or disclosure of a trade secret must be considered lawful and/or, in any event, must not give rise to restrictive measures and/or penalties (Art. XI.332/2 and XI.332/3 CEL), thus confirming that, unlike IP rights, trade secrets do not confer an exclusive right of prohibition.[1]

Tools for enforcement

An important innovation is that the Trade Secret Law explicitly provides for measures, procedures and remedies to ensure the protection of a trade secret (hereafter, the “Measures”), which are largely inspired by, but not identical to the measures, procedures and remedies available to IP rights holders:

  • As IP rights holders, the trade secret holder may request a number of provisional (cessation, seizure or delivery of suspected infringing goods, etc.) and/or “permanent” (cessation, prohibition of production, recall from the market or destruction of infringing goods, etc.) measures. Moreover, the trade secret holder can also obtain damages[2] (Art. XI. XI.336/5 CEL).
  • Unlike IP rights, the Trade Secret Law does not provide for the right for the trade secret holder to opt for a descriptive seizure procedure,[3] nor does it provide for measures against intermediaries and/or for specific remedies in the event of the infringer’s bad faith.[4]

The Measures established by the Trade Secret Law are available to any person who may be qualified as a trade secret holder. Given the relatively broad definition of a trade secret holder (i.e. any person lawfully controlling the secret), it is advisable to clearly (de)limit the possibility for each lawful holder (as, for example, a licensee) to exercise or not the Measures.

Finally, all claims arising from a trade secret infringement are time-barred at 5 years following the day the trade secret holder becomes aware of the infringing activity and of the infringer’s identity. The claim is in any case time-barred at 20 years following the day on which the unlawful acquisition, use and/or disclosure occurred.

Conclusion

The Trade Secret Law is welcomed, as no general regulatory framework regarding trade secrets previously existed in Belgium. It remains to be seen how the Trade Secret Law will be used and applied in practice, but it is in any case an essential means in effectively appropriating, protecting and exploiting results of innovation by providing a trade secret holder with the tools, similar to an IP rights holder, to protect a valid trade secret. Identifying and keeping track of your company’s trade secrets by means of effective company directives and providing for the necessary contractual, physical and technical measures to protect secrecy are in any case necessary for optimising trade secret protection.

 

[1] In this respect, it can, amongst other things, be referred to the acquisition of a trade secret by means of an independent discovery/creation; the study/testing of a product lawfully made available to the public; any practice which is in conformity with honest commercial practices. More generally, the acquisition, use and/or disclosure of a trade secret will be considered lawful if required or allowed by Union or national law and, in any event, it will not be penalised if justified to protect a legitimate interest recognised by Union or national law.

[2] Contrary to the Directive (which provides for minimum harmonisation), the Trade Secret Law does not subject the possibility to obtain damages to the proof that the infringer knew that the condemned acquisition, use and/or disclosure was unlawful.

[3] See Preparatory works of 12 June 2018, Doc 54 - 3154/001, p.9. The legislator’s choice in this respect has already given rise to some discussion amongst practitioners.

[4] See Preparatory works of 12 June 2018, Doc 54 - 3154/001, p.17 and 21.

Contact

Joris Swennen

Associate

Sophie Lens

Counsel

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