Written by Elisabeth Guissart and Claire Leonelli - Avocats à la Cour
Published on 04.09.2018 - Paperjam
The upcoming law on the protection of trade secrets fills an important legal gap. This new tool should not make companies forget to put in place protective measures upstream, which will remain the best defense against the risks linked to a disclosure.
Trade secrets have no value unless they remain secret. This truism has an essential significance: it is only because know-how or business information is not in the public domain, that it is generally not known or easily accessible to those in the business, that it is subject to reasonable measures to ensure its confidentiality, that its holder can expect a competitive advantage with a value on the market and benefit from a specific protection.
In industry, business secrets cover of course manufacturing processes, but also other data such as the identity of suppliers, components or raw materials used, supplier prices... But any commercial organization in any sector is full of confidential information with commercial value such as customer lists, price lists, new product ideas, marketing concepts, business plans, etc.
Trade secrets have long been the poor relation of intellectual property rights compared to patents, copyrights, trademarks: poorly protected upstream and difficult to defend downstream in case of usurpation. The recent bill, No. 7353, on the protection of trade secrets against unlawful acquisition, use and disclosure, should improve the second part of the equation.
On the legal front, organizations will soon have at their disposal a new civil arsenal similar to the one that already exists for intellectual property rights. Companies will be able to apply to Luxembourg courts for preventive measures to avoid the disclosure or use of trade secrets. They will also be able to obtain the cessation of the disclosure and the prohibition of the use of the secrets as well as the withdrawal or destruction of the infringing goods on the market. Despite this arsenal, the nerves of managers and certain employees will continue to be put to the test. In fact, the context in which litigation for trade secret infringement takes place is always a crisis context: the survival of the company may sometimes depend on it. It is therefore necessary to have the right reflexes and to adopt the right decisions in order to prevent or stop the bleeding as soon as possible, which leaves little room for improvisation.
Above all, even if the bill clearly improves the situation of the holders of secrets, it will remain impossible in practice to remove all the effects of an illicit disclosure. In most cases, the damage will already have been done, including damage to the organization's reputation. The case of a disclosure abroad requiring the multiplication of legal proceedings should not be ignored either. The curative measures of compensation may then appear derisory while the victim will not yet have the necessary hindsight to precisely quantify his damage.
This is why it is essential for any company to protect its business secrets upstream and not simply rely on the legal arsenal to come.
If industrial espionage is a reality, the majority of business secret disclosures are made by employees. Therefore, the protection of confidential information must start with the implementation of internal measures, which can be very simple: limitation of access to the various employees on the basis of the "need-to-know" principle, securing and controlling access to the IT infrastructure, implementation of a confidentiality and IT resources usage charter, adoption of strict rules regarding the use of removable media, insertion of appropriate clauses in employment contracts, etc. All of these measures will be very useful in demonstrating to the judge the secret nature of the data for which protection is sought.
It is also advisable to provide proof of the date of creation of certain documents (for example by means of an "i-depot" with the BOIP).
With regard to suppliers, subcontractors or commercial partners, it is also advisable to be prudent, by choosing them carefully and by framing the exchanges as soon as possible by a confidentiality agreement. Properly drafted, non-abuse clauses can be a useful asset. Internationally, it is also advisable to find out about the culture of confidentiality that exists in the target country as well as the legal arsenal available, should the need arise.
The bill that faithfully transposes the European directive was expected and must be welcomed. However, the best defense in this matter remains anticipation: one must take the issue of protecting one's business secrets head on and adopt measures upstream to limit any disclosure.
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