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Europe Moves To Protect Trade Secrets

EU companies endorse proposed legislation on confidential business information

by Cheryl Hogue
December 6, 2013 | A version of this story appeared in Volume 91, Issue 49

The European chemical industry is hailing a move by the European Union to increase legal protections for companies’ trade secrets against theft and use by competitors.

The EU late last month proposed legislation that would provide greater legal redress to companies that have trade secrets stolen from them. This would empower chemical manufacturers to invest more confidently in the EU, says Hubert Mandery, director general of the European Chemical Industry Council (CEFIC).

Trade secrets aren’t protected by patent or copyright, so competitors may work independently to discover, develop, and use the same information. But it’s illegal to obtain this knowledge through theft, bribery, or other illicit means. Trade secrets, which companies guard as confidential because they give them a competitive edge, run the gamut from steps in a manufacturing process to product formulas to the results of marketing studies.

A patchwork of national rules now provide uneven legal protections for trade secrets across the EU. Citing industrial espionage and cyber crime, EU Commissioner for Internal Market & Services Michel Barnier says, “We have to make sure our laws move with the times and that the strategic assets of our companies are adequately protected against theft.”

The proposal would establish an EU-wide definition of what constitutes a trade secret. It also would make it easier for companies to sue for financial damages from anyone stealing, unlawfully using, or disclosing their confidential business information. And it would create a procedure for courts to order removal of products from the EU market that were made with purloined trade secrets.

“This is a critical step to protect European companies’ confidential business information in the case of misappropriation,” CEFIC’s Mandery says of the proposal.



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