BREAKING: EU Council unanimously adopts EU Trade Secrets Directive

Just as the AmeriKat was ready to
leave for the Bank Holiday weekend
the EU Council surprises her...
(c) Joe Delaney

This morning the EU Council unanimously adopted the EU Trade Secrets Directive.  The EU Trade Secrets Directive provides for a common framework of minimum standards that Member States must provide for the protection of trade secrets.  For background on the Directive see previous Kat posts here.  The vote had originally been scheduled for yesterday's meeting but was postponed until today.

In its press release, the Council addressed concerns that the provisions provided for in the Directive would impact free speech, whistle-blowers or mobility of employees.  The measures provided by the Directive "fully ensure that investigative journalism can be exercised without any limitations including with regard to the protection of journalistic sources".  In particular Recital 19 of the Directive provides that:

"While this Directive provides for measures and remedies which can consist of preventing the disclosure of information in order to protect the confidentiality of trade secrets, it is essential that the exercise of the right to freedom of expression and information which encompasses media freedom and pluralism as reflected in Article 11 of the Charter ofFundamental Rights of the European Union, (‘the Charter’) not be restricted, in particular with regard to investigative journalism and the protection of journalistic sources."

As to whistle-blowers, the EU Council commented that in line with Recital 11:

"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."

Article 5 backs up these principles by providing that Member States will dismiss applications for measures, procedures and remedies under the Directive where the alleged misuse or disclosure of a trade secret was carried out:

"(a)  for exercising the right to freedom of expression and information as set out in the Charter, including respect for the freedom and pluralism of the media;  

(b) for revealing misconduct, wrongdoing or illegal activity, provided that the respondent acted for the purpose of protecting the general public interest;  

(c) disclosure by workers to their representatives as part of the legitimate exercise by those representatives of their functions in accordance with Union or national law, provided that such disclosure was necessary for that exercise;  

(d) for the purpose of protecting a legitimate interest recognised by Union or national law."

After the Directive is published in the Official Journal of the EU and it comes into force (i.e. the 20th day following its publication in the OJEU under Article 20), Member States will have a maximum of two years to incorporate the new provisions into domestic law.

The Council's adoption of the Trade Secrets Directive comes only a couple of weeks after President Obama signed the Defend Trade Secrets Act into law.  For discussion on what the coincident timing of these two trade secrets laws might mean for companies, see the AmeriKat's recent conversation with Jim Pooley here.
Kat pats go to Holger Andreas Kastler (Morrison & Foerster) and Gunther Meyer (Eversheds) for alerting the AmeriKat to the news this morning.