Surprise agreement on trade secrets – but still surprisingly secretive

The AmeriKat stalking
further news of trade secrets reform
from her collective of Kat friends
 

As Birgit Clark has already reported, yesterday saw sudden movement in a number of IP-related, EU-level initiatives, including a “provisional agreement” on the proposed EU trade secrets directive. But what does this mean?  Kat friend Mark Ridgway (Allen & Overy) provides some colour:

"Even for those of us following the (rather slow) progress of the EU trade secrets directive closely, yesterday’s press release from the EU Council came as a bit of a surprise - whilst we knew the directive was subject to on-going “trilogue” discussions, these seemed unlikely to conclude before the holiday period, given the thorny issues under discussion and the competing items on the agenda.

In any event, what we now have is a “provisional agreement” on the directive, meaning that the European Parliament and the EU Council (represented by the Luxembourg presidency) have at least reached agreement on the main areas of political contention. Assuming that the wider EU Council approves the deal (and that any remaining technical/drafting points can also be agreed), the final text could therefore be laid before the European Parliament for a plenary vote in early 2016.

Unfortunately, however, we are unlikely to know the exact details of today’s agreement much before then. As readers will be aware, the so-called “trilogue” discussions are held in private between the EU Council, European Commission and European Parliament representatives. There may still be some technical points to agree, and the proposed agreement will also be subject to a “legal-linguistic” review before it sees the light of day.

We do however know where the potential areas of contention lay, based on the prior drafts (see the EU Council’s common approach here, in contrast to the European Parliament’s proposed amendments here). Based on these, interested observers will have noticed the comments in yesterday’s press release that:

“The directive will not impose any restrictions on workers in their employment contracts, where national law will continue to apply. Therefore there will be no limitation to employees' use of the experience and skills honestly acquired in the normal course of their employment…”; and

“Persons acting in good faith that reveal trade secrets for the purpose of protecting the general public interest, commonly known as “whistle-blowers”, will enjoy adequate protection. It will be up to national competent judicial authorities to judge whether the disclosure of a commercial secret was necessary to denounce a misconduct, wrongdoing or illegal activity.”

The drafting in the directive in relation to these important issues (ie employee mobility and whistleblowing) had indeed been of concern to some - certain of the amendments proposed by the European Parliament were of very broad scope, arguably reducing the levels of protection for confidential information that currently exist in some countries.

The suggestion from the press release is that these issues will now largely been left to national law, which (if correct) strikes me as a sensible and pragmatic solution. The trade secrets directive is a useful project, but attempting to harmonise every aspect of the law had potential to lead to increased uncertainty, with numerous inevitable references to the CJEU. Whilst we await the final agreed text with interest, uncertainty in these areas seems set to remain a national issue.

Meanwhile, for those areas that remain subject to harmonisation, if everything runs smoothly the directive looks set to be implemented in national laws by early 2018 (allowing for a two year implementation period).