The legal protection of trade secrets within Ireland and the whole EU was reinforced last year, but not all businesses are aware of this new legislation.
A trade secret is a type of intellectual property owned by a business that provides a competitive edge, for example a formula, pattern, compilation, program, device, method, technique, or process.
This is obviously relevant to a wide variety of businesses. Thus the fact that confidential business know-how is now significantly better protected with the EU (Protection of Trade Secrets) Regulations 2018 is a broadly welcomed development.
Dr. James O’Sullivan, Technology Transfer Office Manager in Waterford Institute of Technology explains the importance of these rights, “The value of trade secrets cannot be over-stated. Many of the industry partners to which Waterford Institute of Technology provide research and development services, rely more heavily on this form of intellectual property than others such as patents where the ‘secret sauce’ is published’’
Trade secrets can be extremely valuable and as confidential business information they give a business a competitive advantage.
- A secret in the sense that it is not generally known,
- Knowledge with commercial value because it is secret,
- Information which has been subject to reasonable steps to keep it secret.
Information including normal experience and skills gained by employees is not deemed to be a trade secret.
The trade secret test:
- Is it really secret?
Is the information broadly known to people within industry circles? If so, then it is unlikely to be seen as a trade secret.
- Does it have commercial value?
The knowledge should have actual or potential commercial value. This is usually a low threshold, but this stated value should be based upon the information being secret.
- Have there been efforts to maintain its secrecy?
Businesses must also make reasonable efforts to keep it secret. How large the business is as well as its industry practices will also be a factor when deciding upon its merits. It’s vital for businesses to have guidelines in place for its protection, and for example, to include non-disclosure clauses in their commercial and employment contracts.
Where a breach is deemed to have occurred, the Regulations set out a variety of remedies available through the Courts, which may include injunctions and Court orders directing corrective measures such as recall or destruction of infringing goods. Damages may also be available to compensate the trade secret owner.
A person who fails to comply with Court orders pursuant to the Regulations commits an offence and is liable on conviction, to imprisonment for up to three years and a fine not exceeding €50,000 or both, depending on the seriousness of the case.
NB – This is a guide for information purposes only and does not constitute legal advice. If you have an issue requiring legal advice, please contact any of the team at Nolan Farrell & Goff at 051 859999/ email@example.com