Dutch Trade Secrets Act

Dutch Trade Secrets Act

On 10 November 2017, the Dutch legislative proposal for the Dutch Trade Secrets Act (the Wet bescherming bedrijfsgeheimen, the "Trade Secrets Act") was presented to the Dutch House of Representatives.

The Trade Secrets Act is the implementation of the EU Trade Secrets Directive (Directive 2016/943/EU) (the "Trade Secrets Directive"), which sets out rules for the protection of Trade Secrets and confidential information of EU companies.

The legislative proposal for the Trade Secrets Act reflects the concepts and regulations as set out in the Trade Secrets Directive. Once adopted, the Trade Secrets Act will provide companies with several tools to prevent unlawful acquisition, disclosure and use of their Trade Secrets.

Trade Secrets

The Trade Secrets Act introduces a uniform legal definition of the term 'Trade Secret'. In short, information is qualified as a Trade Secret if the following requirements are met:

1. it is secret in the sense that it is not generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
2. it has commercial value because it is secret; and
3. it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

Unlawful Acquisition, Use and/or Disclosure of Trade Secrets

Besides a uniform legal definition of the term 'Trade Secret', the Trade Secrets Act provides certain rules to ascertain whether the acquisition, use and/or disclosure of Trade Secrets is unlawful.

Unlawful acquisition

The acquisition of a Trade Secret is considered unlawful if the Trade Secret holder has not given its consent and if the acquisition is carried out by means of:

1. unauthorised access to, appropriation of, or copying of any documents, objects, materials, substances or electronic files, lawfully under the control of the Trade Secret holder, containing the Trade Secret or from which the Trade Secret can be deduced; or
2. any other conduct that is considered contrary to honest commercial practices.

Unlawful use or disclosure

The use or disclosure of a Trade Secret is considered unlawful whenever carried out, without consent of the Trade Secret holder, by a person that:

1. has acquired the Trade Secret unlawfully;
2. is in breach of a confidentiality agreement or any other duty not to disclose the Trade Secret; or
3. is in breach of a contractual or any other duty to limit the use of the Trade Secret.

Additionally, the acquisition, use or disclosure of a Trade Secret is deemed unlawful if the person at the time of such acquisition, use or disclosure knew or should have known that such Trade Secret was obtained (in)directly from another person who used or publicised the Trade Secret unlawfully.

Please note that the above rules are subject to certain exceptions, such as the exercising of the right of freedom of expression and information (in the light of, for example, investigative journalism).

Measures against Unlawful Acquisition, Use or Disclosure of a Trade Secret

The Trade Secrets Directive stresses the importance of a sufficient and consistent level of civil redress in the EU in the event of unlawful acquisition, use or disclosure of a Trade Secret.

At present, Dutch law already offers a diverse range of civil and criminal law instruments that offer victims of misuse of their Trade Secrets the option to defend their rights. In addition to these instruments, the Trade Secrets Act provides for more specific enforcement measures by introducing (among others) the right to claim prohibition of the use or disclosure of a Trade Secret in court. Additionally, the Trade Secrets Act includes the right of Trade Secret holders to claim destruction of items containing or applying Trade Secrets, such as substances, documents and electronic files.

Next Steps

After approval of the Dutch House of Representatives and the Senate, the Act will be ratified and enter into force. The deadline is 9 June 2018, on which date all Member States have to comply with the Trade Secrets Directive.