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Better protection for trade secrets in the EU - 28/11/2013

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The EU has proposed new rules to protect businesses when confidential information is stolen or misused. The rules aim to encourage innovation and collaboration.

Trade secrets – confidential business information such as Google's search algorithm or the recipe for a particular perfume – could be given better protection under new rules proposed by the European Commission.

The rules will benefit companies that suffer when commercially valuable information is stolen or misused.

The proposals aim to make it easier for national courts to deal with such cases and for victims to receive damages. They also establish an EU-wide definition of 'trade secrets'.

Growing problem

A recent survey showed that 1 in 5 companies has suffered an attempt to steal its trade secrets in the last 10 years, and the numbers are rising. Factors contributing to this include fierce global competition and increased use of digital technologies.

Trade secrets differ from patents and intellectual property rights such as copyright and trademarks in that they are not exclusive. Competitors can, and often do, strive to create similar products or solutions, but the trade secret holder has a competitive advantage in having created it first.

Legal protection varies widely across the EU – some countries have no specific laws on the issue – which makes it difficult for victims to take a case to court as they may not understand the regulations of other EU countries.

A safer environment

The problem inhibits business cooperation across borders and holds back innovation because a company's creation or research may not be adequately protected. Small businesses are particularly vulnerable as the cost of patenting means they rely more heavily on trade secrecy.

The proposals will create a safer environment in which businesses can create and share information.

They will now be presented to the Council of Ministers and the European Parliament for evaluation.

Press release – Guarding against the theft of confidential business information: the Commission proposes EU-wide rules

Trade secrets – Frequently asked questions

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