Although the implementation should have been enacted by 9 June 2018, Luxembourg has finally published, on 13 August, the first draft bill implementing Directive 2016/943 on the protection of undisclosed know-how and business information.
The Directive will grant EU Member countries a coherent legal protection which was not the case to date as there was a discrepancy in the legal arsenal available to the judge.
The draft bill has opted for a literal implementation as it was decided to implement all the Directive but only the Directive. In this regard, the Luxembourg draft bill is closer to the Belgian law than to the French one. Indeed, the French law goes beyond the European Directive.
Although the text may be amended, we may still take a closer look at a few points such as the definition (art 1) of a trade secret, which is identical to the one stated in the Directive, meaning:
- it is a secret in the sense that it is not (…) generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
- it has a commercial value because it is a secret;
- it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.
The Directive also states that the acquisition, use and disclosure of trade secrets shall be considered lawful when it is obtained by any of the following means (art 3):
- 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;
- exercise of the right of workers or workers' representatives to information and consultation in accordance with Union law and national laws and practices;
- any other practice which, under the circumstances, is in conformity with honest commercial practices.
On the contrary, the acquisition, use and disclosure of trade secrets, without the consent of the trade secret holder, shall be considered as unlawful (art 4) whenever it was carried out by:
- unauthorised 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;
- any other conduct which, under the circumstances, is considered contrary to honest commercial practices.
It will be also considered as unlawful when, without the consent of the trade secret holder, a person:
- has acquired the trade secret unlawfully, or
- is in breach of a contractual or any other duty to limit the use of the trade secret, or
- is in breach of a contractual or any other duty to limit the use of a trade secret.
Furthermore, 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.
Finally, the production, offering or placing on the market of infringing goods, or the importation, export or storage of infringing goods for those purposes, shall also be considered an unlawful use of a trade secret where the person carrying out such activities knew, or ought, under the circumstances, to have known that the trade secret was used unlawfully.
The Luxembourg draft bill also provides certain exceptions (art 5) to protect the acquisition, use or disclosure of trade secrets when it is linked to the freedom of expression and information and whistle-blowers. It is important to note that the protection of whistle-blowers under Luxembourg law is not affected and remains guaranteed.
The Luxembourg judge will have the possibility, notably though interim orders or penalty payments, to stop the use or prevent the use or disclosure of trade secrets. As for the applicant, it will have to initiate proceedings within twenty working days.
The Luxembourg draft bill also plans a limitation period of two years as from when the trade secret holder knows or ought, under the circumstances, to have known about the acquisition, use or disclosure of the trade secret and knows or ought, under the circumstances, to have known the identity of the infringer. In its article 8, the Directive mentions a limitation of six years which is more favourable to trade secret holders. This may be a point of discussion for the Luxembourg MEP’s.
The implementation process has just started and we hope that it will be completed soon since such a law is very useful in today’s business world.