New EU Commission Study on the legal protection of Trade Secrets

On September 13, the EU Commission has published its study on the legal protection of trade secrets in the context of the data economy:

https://op.europa.eu/en/publication-detail/-/publication/c0335fd8-33db-11ed-8b77-01aa75ed71a1/language-en/format-PDF/source-268790874

It is an empirical study focusing on the automotive, pharmaceutical/life sciences, energy and utilities; and financial services sectors. The authors have investigated the extent to which the EU Trade Secrets Directive applies to data that companies share with each other in practice and how these companies apply trade secrets in practice.

As a result, the actual and economic importance of data sharing has been and will be increasing, while the protection and exploitation of shared data with trade secrets continues to significantly lag behind. There is a lack of expertise in companies regarding the handling of trade secrets. The Directive has created new law; moreover, appropriate IP management practices are only now developing. Many companies are uncertain about the interpretation of key provisions of the Directive, such as the requirements for "reasonable steps“ to maintain confidentiality. The same applies to the possibilities of enforcement, also because judicial decisions are lacking.

The findings are in line with our experience. They have prompted us to make a contribution to this with this series.

The authors of the study came up with three recommendations for action:

1. Companies should increase their knowledge of in the application of trade secrets to shared data and invest in measures and training for this purpose.
2. Possible ambiguities in the interpretation of the EU Trade Secrets Directive should be reduced, for which the authors propose explanations or an amendment of the Directive.
3. Finally, the legal framework relevant to the practical application of trade secrets should be improved. In this context, the authors focus on labor law, criminal law and competition law.

We do not expect the study to replace the overdue EUIPO report mentioned in Art. 18 of the Directive, which we all eagerly await.