The protection of commercial secrecy
The majority of businesses, national as well as international, are (some more, some less) depending on the utilization of their commercial secrets, in order to secure their growth. For some businesses, their commercial secrets are crucial (sine qua non element) for their own existence.
This fact has created, through time, the need for regulations protecting those important commercial sectets. This protection was offered, until recently, mostly through the relevant provisions of act 146/1914. This act mainly provided for penal sanctions in case a commercial secret was infringed.
ΙΙ. The recent provisions for the protection of commercial secrecy
The different extends to which commercial secrecy was protected in the EU brought upon the need for the issuance of Direction 2016/943, which called for the harmonization of all its member states’ relative legislation. the Direction was transposed in our country’s legal system with the recent act 4605/2019, which provides civil protection to those whose rights relating to commercial secrecy were violated. This act applies along with the aforementioned act 146/1914.
For an information to be characterized as a commercial secret, all the following conditions must be met:
(a) the information must be confidential, meaning that it must not be widely known to persons operating in cycles relevant to this type of information, and it must not be directly accessible by said persons,
(b) it must have a commercial value, which derives from its confidential nature and
(c) the person who has legitimately gotten control over the information must have put a considerable effort to protect its confidential nature.
Indicatively, a piece of information can be confidential if it regards the clients and suppliers of a business, manuals and designs, financial information, know how, market and product research.
The owner of the commercial secret can be offered temporary judicial protection via a restraining order.
A restraining order can order:
- The temporary pause or restriction of use or reveal of the commercial secret,
- The prohibition of production, offer, placing in the market, use of illegal goods and/or their import, export or storing,
- The seizing or delivery of goods with indications of illegality.
(It is especially interesting that the act provides for the deposit of a guarantee from the one requesting the issuance of the restraining order as a mandatory prerequisite for the restraining order to be issued, in order to ensure the coverage of possible damages of the one who appears to be infringing.)
Measures like the abovementioned can be ordered with the ruling on the principal action. It is noteworthy that the court judging the action can order the payment of a compensation instead of what is asked for in the action. The court is able to do that, after the respondent makes a relevant request, as long as the latter did not know or had no way of knowing that the commercial secret was unlawfully obtained by a third party.
A compensation can also be ordered by the court if the applicant makes a relevant request, based on the claim that the respondent knew or ought to have known that they are illegally obtaining or using the commercial secret.
An employee can violate a commercial secret as well. The relevant responsibility will lie with the employer only if the employee acted with no malice.
In contrast to the right to the protection of one’s commercial secrets, comes the right to the freedom of expression and information, as well as the principal of public interest. The new act is trying to balance out those opposing interests by introducing provisions which mention specific cases where a request for judicial protection should be overruled. Specifically, it is stated that a relevant request is overruled when the the commercial secret was obtained, used or revealed:
(a) to exercise the right to the freedom of expression and information, which entails respecting the freedom and plurality in the media sector,
(b) to prove liability or an illegal activity, providing that the respondent acted towards the general public interest,
(c) from the employees to their representatives, as part of the lawful exercising of said parties’ duties, provided that this reveal was mandatory in order to be able to exercise said duties, and
(d) for the protection of a lawful right, recognized under EU or national law.
In all those cases, public interest and the right to the freedom of expression and information are above the right to seek the protection of a commercial secret.
ΙΙΙ. In conclusion
It is not uncommon for a business to come across a case where its commercial secrets have been infringed. In this undesirable situation, it is extremely important that the business affected is in a place to easily prove its rights have been violated, since, in such a case, the need for judicial protection is unavoidable. Thus, it is mandatory for all businesses to take the appropriate preventive measures (indicatively: the exact definition of the commercial secrets and of the persons who have access to them, to strengthen their electronical systems, to train its employees). It goes without saying that drafting and having special confidentiality clauses signed, which are linked to specific and severe sanctions is of extreme importance.
All the above, of course, under the instructions and with the directions of the business’s technical and legal advisors.
Υ.Γ. A brief version of this article has been published in MAKEDONIA Newspaper (October 6th, 2019).