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Commission proposes rules to help protect against the theft of confidential business information

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The European Commission has proposed new rules on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure.

Vice-President Antonio Tajani said: "Protecting trade secrets is particularly important for the EU's smaller, less established firms. They employ trade secrecy more intensively than larger companies - in part because of the cost of patenting and protection against infringement. The loss of a trade secret and disclosure of a key invention to competitors means a catastrophic drop in value and future performance for an SME. With this legislation, the Commission will protect EU businesses' livelihood and the trade secrets that form a vital part of it. "

The draft directive introduces a common definition of trade secrets, as well as means through which victims of trade secret misappropriation can obtain redress. It will make it easier for national courts to deal with the misappropriation of confidential business information, to remove the trade secret infringing products from the market and make it easier for victims to receive damages for illegal actions.

In today’s knowledge economy, the capacity of companies to innovate and compete can be seriously harmed when confidential information is stolen or misused. According to a recent survey1, one in five companies has suffered at least one attempt to steal its trade secrets in the last ten years. According to another recent study2, the numbers are going up with 25% of companies reporting theft of information in 2013, up from 18% in 2012.

There are substantial differences in the laws in place in EU countries on protection against trade secret misappropriation. Some countries have no specific laws on the issue. Businesses find it difficult to understand and access the systems of other Member States and, whenever they become victims of misappropriation of confidential know-how, they are reluctant to bring civil court proceedings as they are not sure the confidentiality of their trade secrets will be upheld by the courts. The current fragmented system has a negative effect on cross-border cooperation between business and research partners and is a key obstacle to using the EU single market as an enabler of innovation and economic growth.


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