The U.S. Senate is not alone when considering whether to federalize trade secret law, as the European Parliament and Council will soon discuss proposed legislation aimed at normalizing trade secret law for EU member states. The European Commission proposed a draft directive to both the Parliament and the Council in November 2013, and now the European Council has issued its opinion.
The Council agreed with the draft directive’s general framework for adopting an EU-wide trade secrets directive (though revised), with the president-in-office of the Competitiveness Council lauding the opinion:
Today, we have decided on a single, clear and coherent legal regime protecting against misappropriation of trade secrets in EU Member States. This decision will promote innovative companies, ensure fair and honest competition and create a secure environment conducting to innovation, the exchange of valuable know-how and cross-border commercial activities within the internal market. This will empower companies to continue investing with more confidence in research and innovation in Europe.
The general framework has five main features, including an employee-friendly component that is somewhat foreign to US legislation:
- Minimum harmonization of the different civil law regimes within the member states—but a recognition that individual member states can pass stricter trade secret laws;
- Agreement on common principles, definitions, safeguards, procedures, and remedies in civil litigation, but not criminal proceedings;
- Six-year statute of limitation period for trade secret theft cases;
- Guidelines for preserving confidentiality in trade secret litigation within member states; and
- Damage limitation for employees who did not intentionally misappropriate their employers’ trade secrets.
The Parliament has not yet released its opinion on the draft directive, but the Council hopes the two can agree on a final directive during the first reading. We will continue to monitor the legislative process and will provide an analysis of the Parliament’s opinion once it’s released.