A harmonized trade secrets protection regime is coming to Europe and the U.S. Until now, the approach to trade secrets across Europe has been fragmented, with some countries having specific trade secrets legislation and others relying on unfair competition, tort, or contract law. Trade secret protection in the U.S. has been somewhat less fragmented, as almost every state (New York and Massachusetts being notable exceptions) has adopted some version of the Uniform Trade Secrets Act (“Uniform Act”). On May 11, 2016, President Obama signed into law the Defend Trade Secrets Act (“US DTSA”), which creates a federal cause of action with substantive elements that are very similar to the Uniform Act. For practical considerations regarding the US DTSA, see our recent publication.
In November 2013, the European Commission proposed a new trade secrets directive with the aim of harmonizing the law in the EU and thereby encouraging European cross-border investment, competition, and innovation. Following much debate, the “Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure” (the “EU Directive”) entered into force on 5 July 2016. EU Member States must implement the EU Directive into their national laws by 9 June 2018.
In this alert, we outline the EU Directive’s key provisions and discuss its potential impact on companies operating in Europe (with a particular focus on implications for Germany and the UK). We also provide recommendations for companies doing business in Europe and compare the EU Directive with the US DTSA.