Know-how as a trade secret or a patent?
A trade secret does not require an application or registration, unlike a patent. However, a patent does give you exclusive rights, but your invention will be published in patent registers, otherwise you cannot prohibit others from counterfeiting it. Someone could apply for a patent on an invention that you keep secret but that has been stolen from you. In that case, there is a chance that that person will be granted a patent and that you will be restricted in your use of the invention. The Trade Secrets Protection Act (Wbb -2018) offers innovative companies better protection against unfair practices, such as copying without permission, theft, and economic espionage.
What is a trade secret and when is it considered unlawful use? What measures can you take to keep your trade secrets truly secret?
Trade secret – what is it?
Many companies assume that a patent is the most important way to protect knowledge. However, it is sometimes wiser not to patent certain information, but to keep it confidential, partly because a patent is temporary and not all information is patentable.
Protecting trade secrets is crucial to securing know-how, such as:
– trade and customer data;
– technological knowledge;
– business plans and market research;
– commercial and market strategies.
No registration – but 3 conditions
The EU Trade Secrets Directive applies in the EU and has been transposed into Dutch law in the Wbb. No registration is required: a trade secret arises automatically. However, the information must meet 3 conditions:
1. the information must not be generally known or easily accessible to insiders (such as competitors);
2. the information has commercial value precisely because it is secret (actual or potential);
3. the holder takes reasonable measures to keep the information secret, appropriate to the circumstances.
Unlawful acquisition, use, or disclosure
Third parties may unlawfully acquire or use your trade secret. As the holder, you can take action in cases such as:
• acquisition through unauthorized access or appropriation of documents, objects, or (digital) files;
• use of the trade secret without your consent;
• disclosure after unlawful acquisition or in breach of a contractual obligation.
In some cases, use or disclosure may still be lawful, for example for compelling reasons of public interest or when the information has already been made public.
Practical tips:
Measures to protect your trade secrets include:
• Including confidentiality clauses in commercial contracts;
• Clear confidentiality provisions in employment contracts and regulations (including for existing staff);
• organizational security: access only for key personnel, document registration, targeted training;
• physical security of premises and installations (electronic, organizational, structural);
• digital security: two-step verification, encryption, and a strict access control system.
Another measure: what can be done about theft if it happens, e.g., with a former employee-inventor/know-how confidant who has left the company? Consider seizing information. However, this requires good preparation, timing, and precision. We have that experience and are happy to help you.
Conclusion
Simple organizational, physical, and digital measures are sufficient to meet the requirement of “reasonable measures” and make you eligible for protection under the Wbb.
Are you dealing with the unlawful acquisition, use, or disclosure of trade secrets, or do you have questions about the protection of your trade secrets? Please feel free to contact us.
Bert Gravendeel
Intellectual property & IT and ICT law