What is a trade secret?
Your business activity depends on how you
master your know-how and your sensitive information
A NEW CONTEXT
> IN FRANCE
Since the 30th of July 2018
- The French trade secrets act provides for a new legal framework for the protection of sensitive business information: loi n° 2018-670, 30 juillet 2018.
- Many decrees have been issued, many codes have been amended: the commercial code, the cinema and moving image code, the environmental code, the tax procedure code, the heritage code, the intellectual property code, the code of relations between the public and the administration, the rural and maritime fishing code, the public health code, the social security code, the transportation code, the public procurement code.
- Many court decisions have already implemented these new provisions.
Every company is affected
- Meanwhile, 94% of general counsels consider that the existing protective measures in place in their companies are inadequate (KBI survey)
- The average cost of sensitive date theft in a large company located in Europe amounts almost to 4M€ (IBM 2020 report)
New similar legislations are put in place
- The European Union, the United States, China
- With the adoption in 2016 of the U.S. federal Defend Trade Secrets Act (DTSA), the number of litigations, having as subject matter the theft of trade secrets, is increasing.
- This trend is reinforced by the consequences of the Covid-19 crisis: cyber attacks, turnover of employees and increased use of external service providers.
- They are a new issue in trade disputes and involve Europe-based companies.
- In the USA, the average damage award amounts to more than 10M$ among the main states hearing trade secret cases (2020 Trends in Trade Secret Litigation Report).
THE FRENCH TRADE SECRETS ACT
Trade secrets are to business information
what GDPR is to personal data.
WHAT IS THIS ABOUT?
The acquisition, use or disclosure of a trade secret shall be considered unlawful whenever carried out, without the consent of the trade secret holder.
WHAT IS A TRADE SECRET?
Undisclosed know-how and business information*. As per the law, a trade secret is:
1. Not generally known or readily accessible
2. Has a commercial value, actual or potential, because of its secret nature
* Information relating to R&D, marketing, commercial and growth strategies, manufacturing secrets, information covered by confidentiality obligations…
WHAT CAN YOU DO?
Deploy a trade secret governance program.
WHO IS CONCERNED? WHEN?
- Every company is concerned whatever its business area and size (large, medium and even small)
- Every function and department (operational, corporate)
- In the normal course of business such as: contract negotiation, access to and disclosure of documents, private or public tenders, employee turnover, conflict of interest, theft and misappropriation of documents…
- Potentially in all types of litigation: competition law, corporate law, labor law, contract law, public procurement law, intellectual property law…