ArticlesBusiness Privacy: Protection

February 13, 2022by Stavros Koumentakis

In a previous article we attempted to approach the content and value of business secrets. We were given the opportunity to confirm its value and special importance to the business. Also: the competitive edge it gives in the market. But this, precisely, its (undeniable) value and importance is what makes its multi-level protection absolutely necessary. It takes various forms – both criminal and civil. It is provided against the company’s employees who, due to their position, have knowledge of confidential information and data. Of course also against third parties.


Confidentiality Clauses & Agreements

It is often necessary to disclose business secrets to persons outside the company (e.g. in the context of conducting due diligence for an upcoming acquisition or merger).

However, the employees always have, to a lesser or greater extent, knowledge of business secrets. Thus, they are burdened with a series of ancillary obligations. Among them the obligation of confidentiality. In our previous article, we defined it as “… prohibition of the employee to make use for their own (or for a third party’s) benefit or disclose to third parties business (commercial and industrial) secrets” of the employing company. Violation of this obligation justifies significant sanctions against the offender (among them the termination of their employment contract).

Confidentiality clauses and obligations can also be enforced through (standalone) non-disclosure agreements (:NDA). They may concern employees. It is, however, possible to enter into such agreements with third parties who, for any reason, are “exposed” to business secrets. Their duration may coincide with the duration of (any) contractual relationship. It may, however, extend beyond it (:post-contractual clauses).

The written confidentiality agreements specify, each time, its content. Also: the context (and/or scope) of the harm that its breach might cause, which is otherwise difficult to prove. It should not elude us that the prior agreement on the method of determining the (potential) damage facilitates the calculation of the compensation due. It is possible, in this context, among other things, to agree: (a) a specific method of calculating the damage, (b) a specific amount as a lump sum compensation, (c) a specific amount as a penalty clause.


Criminal Protection

The provisions of the law on unfair competition

Law 146/1914 on unfair competition aims to safeguard business confidentiality; to protect, in particular, the entity holding the business secret against offensive acts (1717/2013 Supreme Court, NOMOS legal Data Base). This protection is of a criminal, at a first level, nature (art. 16 & 17).

In this context, four criminal acts are covered, which fall under the scope of economic crime. These are the following:

(a) The disclosure of confidential information by an employee during their employment. Specifically, article 16 §1 provides that “With imprisonment of up to six months and with a fine (up to three thousand drachmas *editor ‘s note: as converted into euros based on art. 1 and 2 of law 2842/2000) or with one of these penalties shall be punished the one who, as an employee, worker or apprentice of any commercial or industrial shop or enterprise, without right discloses to third parties, during the period of their service, secrets of the shop or enterprise entrusted to them as part of their service, or otherwise coming to their attention, for the purpose of competition or with the intention of harming the owner of the shop or business”.

It is a criminal offense that can only be committed by an employee (even an apprentice) of the company and in fact by one with an active employment contract. The latter must, precisely because of their position and duties, have knowledge of information which fall under the concept of informational confidentiality, and communicate them to third parties. Obviously, without being entitled to do so.

The employee’s specific announcement presupposes fraud on their part. Also: there must be a purpose of competition or intent to harm the business.

(b) The Prohibited Use or Disclosure of Privacy. With the aforementioned (under a) penalty, any person who uses or discloses, without a right, confidential information of the business is also punished (art. 16 §2).

The knowledge of the secret by the perpetrator must have been made either through its announcement by an employee of the company or by an act of the perpetrator themselves, contrary to the law or good morals. At the same time, the perpetrator must have intended to use or disclose the business secret and carry out this act for the purpose of competition.

The perpetrator of the specific criminal act may also be an ex employee of the business  – holder of the secret. In particular “…if the non-disclosure obligation after the termination of the relationship has also been agreed” (664/2019 Court of Appeal of Thessaloniki, NOMOS legal Data Base).

(c) The prohibition of use or disclosure of confidential designs, rules of a technical nature, etc. (no. 17). Similarly with the penalty mentioned below, “…the one who uses or communicates to third parties the plans or rules of a technical nature entrusted to them during the transactions, as well as designs, standards, types, models, directives” is punished.

The subject of the aforementioned criminal act can only be a third party, who has a transactional relationship with the company in the context of their business activity. In the context of this relationship, the business holding the secret must have entrusted the third party with the limited categories of privacy listed in the provision. Therefore, the perpetrator cannot, in this case, be an employee of the company.

It is also worth pointing out that the privacy categories mentioned in art. 17 fall under the concept of industrial secrecy and confidential know-how (664/2019 Court of Appeal of Thessaloniki, NOMOS legal Data Base).

(d) The unsuccessful instigation for the execution of the above (under a-c) criminal acts. Specifically, Article 18 §2 provides that anyone who unsuccessfully forces another to commit any of the above-mentioned unjust acts is punished with the penalties of Article 16 reduced by half. The instigator must have as their objective acts of competition.


The provisions of the Criminal Code

In addition to the provisions of Law 146/1914, criminal protection of individual categories of business secrecy is provided through a series of provisions of the Criminal Code when the breach of confidentiality relates to confidential computer programs or data (370B and 370C Criminal Code).

An aggravating circumstance exists when the perpetrator is in the service of the owner of the data, as well as when privacy is of particularly great financial importance.


Civil Protection

The provisions of Law 146/1914

Law 146/1914 establishes, in addition to criminal, civil protection of business confidentiality.

In particular, Article 18 §1 provides that the commission of the above criminal acts (Articles 16 & 17 of Law 146/1914) gives rise to an obligation to compensate for the damage caused.

However, the provision of article 18 §1 is characterized, rather, as unnecessary. The violation of the criminal provisions of articles 16 and 17 covers, in any case, the prerequisite of illegality of article 914 of the Civil Code (and also meets the other conditions of this article). Therefore, even if the relevant legislative provision of article 18 was missing, the company that suffered damage would be able to claim the restoration of its damage in the form of compensation. (2709/2021 Court of Appeal of Athens, where it is stated that the provisions of Law 146/1914 on tortious liability have precedence over the general provisions of 914 and 919 of the Civil Code).

At the same time, Law 146/1914 provides a right to compensation in the case of the general clause of art. 1. This specific provision provides that any act that is done for the purpose of competition and is contrary to good morals is prohibited in commercial, industrial or agricultural transactions. The violator can be sued for omission and for the repair of the damage caused.

Therefore, for the implementation of this article, the following must apply “…, on the one hand, the violation was for the purpose of competition, on the other hand, it was contrary to accepted principles of morality, the criteria of which are the ideas of the average reasonable person who, according to the general perception, thinks with virtue and prudence, within the trading cycle in which the act is carried out or the use of methods and means contrary to the orderly morality of transactions.” (76/2020 Court of Appeal of Peraeus, NOMOS legal Data Base).

This specific provision could be applied, e.g., in the case that an employee disclosed without right the business secrets of a certain company for the purpose of competition, but not with intent (therefore, articles 16 §1 and 18 §2 of the same law).


The provisions of Law 4605/2019

Civil protection of business confidentiality is strengthened through the provisions of Law 4605/2019. The latter integrated into the national legal order Directive 2016/943 ” on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure”, adding articles 22A-22K to law 1733 /1987.

This law defined, as we mentioned in our aforementioned, previous article, the concept of commercial secrecy. In addition, it provided for the conditions under which the acquisition, use or disclosure of a trade secret becomes illegal.


Temporary Judicial Protection

The strengthening of the protection offered by this law is due, first of all, to the provision of the possibility of providing temporary judicial protection through injunctive measures (and temporary injunction). An option that was disputed before the entry into force of the specific provision.

According to article 22E of Law 1733/1987, if there is a suspected breach of commercial secrecy, the following injunctive measures may be ordered:

(a) Suspension or Prohibition of Use or Disclosure of the Trade Secret.

(b) Prohibition of the manufacture, supply, marketing or use of illegal merchandise. Also, the importation, exportation or storage of illegal goods for the aforementioned purposes.

(c) Seizure or delivery of goods suspected of being illegal.

Alternatively, the competent Court (Single Member Court of First Instance) may make the continuation of the deemed illegal use of the trade secret conditional on the filing of guarantees. It is, however, expressly prohibited to disclose trade secrets in return for the deposit of guarantees.


Definitive Judicial Protection

Upon the issuance of a court decision on the action of the injured party in which the illegal acquisition, use or disclosure of a trade secret is established, the court may order one or more of the following measures (article 22F n. 1733/1987):

(a) Suspension or Prohibition of Use or Disclosure of the Trade Secret.

(b) Prohibition of the manufacture, supply, marketing or use of illegal goods or the import, export or storage of illegal goods for the above purposes.

(c) Taking remedial measures (in detail: art. 22F §2).

(d) Destruction of all or part of a document, object, material, substance or electronic file containing or embodying the trade secret or delivery to the claimant of all or part of said document, object, material, substance or electronic file.

In addition, Article 22I provides an additional possibility against the unlawful acquisition, use or disclosure of a trade secret: the claimant may ask the court to order measures to disseminate the information related to the judgment at the expense of the infringer. Including, in fact, the full or partial publication of the decision.


Damages & Monetary Penalties

Compensation is granted (art. 22H) following the claimant’s request. It is required that the offender knew or should have known that they were illegally acquiring, using or disclosing a trade secret. In this case, the infringer pays the owner of the trade secret compensation commensurate with their actual loss. The law, in fact, provides factors that the court takes into account when determining the compensation. Among them, the moral damages caused to the legal owner. A rather unfortunate provision, as the recovery of moral damages constitutes a distinct and independent fund in relation to that of property damage

It is further provided that the liability for the payment of damages by employees to their employers for the unlawful acquisition, use or disclosure of the employer’s trade secret is limited, accordingly, if the employees acted without malice.

Further, where the infringer neither knew nor should have known under the circumstances that the trade secret was the product of illegal acquisition by a third party, it is possible to order compensation to be paid to the owner of the trade secret. This compensation is imposed as an alternative measure, instead of the measures provided for in article 22F, (mentioned above). Provided that no disproportionate harm would be caused to the offender and compensation would be reasonable for the party suffering the damage (article 22G).

At the same time, the court can impose sanctions (financial penalties) on any person who does not comply with any of the measures of articles 22D, 22E and 22F that it imposes (art. 22J).

Finally, in the above-mentioned court proceedings, the protection of the confidential nature of trade secrets is expressly required by the parties involved (e.g. litigants, lawyers, witnesses, – art. 22H).


As we have already pointed out, business confidentiality covers a very wide range of information and data, related to all business activity. Its protection, therefore, proves to be of major importance. The threatened (criminal and civil) sanctions, although extensive, do not seem to act as a deterrent for the offenders. Therefore, it is necessary to carefully, retrospectively, manage potential leaks (on a practical and legal level). But prevention is more important and absolutely necessary in this case as well. The creation, in other words, of a protective “wall” to secure it. And, of course, the necessary deterrent and, to the maximum extent possible, guarantee contractual and legal “safety net”.


Finally, in the above-mentioned court proceedings, the protection of the confidential nature of trade secrets is expressly required by the parties involved (e.g. litigants, lawyers, witnesses, – art. 22I).


Stavros Koumentakis
Managing Partner


P.S. A brief version of this article has been published in MAKEDONIA Newspaper (February 13th, 2022).

Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

Stavros Koumentakis
Nikis Avenue & 1, Morgenthau st., 54622 Thessaloniki
(+30) 2310 27 80 84

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