New legislation on trade secrets in The Netherlands

On 17 April 2018 The Dutch House of Representatives passed a new Bill (the Bill) implementing the EU Trade Secrets Directive (EUTSD). The Bill is now pending before the Dutch Senate. The implementation deadline of 9 June 2018 has been exceeded following several questions from the Senate to the government. The Senate does not have the power to amend the Bill, only to reject or accept it as a whole. It is expected that the Senate will eventually accept the Bill in its present form.

The EUTSD stipulates minimum harmonisation, so member states can opt for a broader protection for trade secrets than the EUTSD provides. The Netherlands made use of this to provide for broader protection with respect to the below topics:

Infringing goods

Infringing goods are defined in the Bill, as in the EUTSD, as goods of which the design, characteristics, functioning, production process or marketing significantly benefits from trade secrets unlawfully acquired, used or disclosed. The Explanatory Memorandum to the Bill states that due to the broad criterion of "significant benefit", the use of unlawfully obtained trade secrets for a part of the production can contaminate all goods and qualify them as infringing goods. As a result, the unlawful use of trade secrets by suppliers of semi-finished products may also mean that the products in which these semi-finished products are processed should qualify as infringing goods.

Seizure of evidence

The EUTSD does not force member states to allow the seizure of evidence without hearing the other party. The Explanatory Memorandum to the Bill states that the seizure of evidence in cases concerning trade secrets is already possible on the basis of a ruling of the Dutch Supreme Court in 2013. In addition, seizure of evidence is part of the currently pending modernization attempts of Dutch procedural law on evidence. So filing for seizure of evidence in trade secret cases in The Netherlands is certainly possible, but the legislator will implement this instrument for all civil litigation instead of only for trade secret litigation.

Protective order

The protective order system in the directive (Article 9 EUTSD) has been literally implemented in the Bill. This system only protects trade secrets in cases where trade secrets themselves are the subject of the proceedings. However, it is possible that parties will be obliged to share a trade secret with the court, but that the case itself is not specifically concerned with the protection of trade secrets. To this end, the Bill states that the court may rule in all civil cases but not in cases specifically about trade secrets (for example proceedings concerning infringement on a process patent) and that access to a trade secret is reserved to lawyers or representatives that have received special permission from the court.

Order for full legal costs

The EUTSD does not provide that the full costs of the procedure will be borne by the unsuccessful party, while the Enforcement Directive does. The Dutch Bill gives the court the ability to order the unsuccessful party to pay for the reasonable and proportionate legal costs and other expenses incurred by the successful party, unless reasonableness and proportionality preclude this.

This order to pay the full costs resembles the order from the Enforcement Directive implemented in Dutch law. The only difference is that the order in the Bill will not be compulsory. It is left to the court to order the unsuccessful party to pay reasonable and proportionate procedural costs. With this, the court can make tailor-made decisions, depending on the circumstances of the case.