Trade secrets

What we do

A trade secret is exclusive in-house knowledge regarding production processes, technologies, or data. This knowledge and data has enormous commercial value and can have a significant impact on the competitive position. Trade secrets can be protected under the Trade Secrets Protection Act. To protect trade secrets, the business information must meet a number of conditions. The information must be secret; that is to say, not generally known or easily accessible. Additionally, the information must represent value; not only for the organization itself but also for others in commercial transactions. Finally, reasonable means must have been employed to keep the information secret. The moment certain information within an organization qualifies as a trade secret, that information is protected against unlawful use, unlawful publication, and unlawful acquisition. It is not always easy to prove that an infringement of a trade secret has occurred. Should an infringement of a trade secret be proven, a claim for damages arises. Initiating legal proceedings regarding a trade secret can lead to even more unwanted exposure of the trade secret. To limit that risk to a minimum, a number of safeguards have been included in the law. Among other things, the professional secrecy of lawyers protects against (further) exposure of trade secrets during legal proceedings.

We have the knowledge and expertise to assume diverse roles: from advice to dispute resolution. We have an experienced team of lawyers and legal experts in the field of trade secrets. Contact us to discuss the possibilities.

Trade secrets within intellectual property (IP law)

Trade secrets form a distinct pillar within Intellectual Property (IP) law. Strictly speaking, a trade secret is not a classic IP right like a patent or trademark, but rather a supplementary form of protection. Whereas a patent specifically requires disclosure and registration, a trade secret exists by virtue of secrecy. The regimes often overlap: technical know-how, source code, or a recipe can be simultaneously protected by copyright and qualify as a trade secret. Our lawyers and in-house counsel determine the smartest route for each situation: registration via patent and copyright law, confidentiality under the Trade Secrets Protection Act, or a combination. This applies to the international corporation with an R&D department just as much as to the baker on the corner with a unique recipe.

Legal framework: the Trade Secrets Protection Act

Since October 2018, the protection of trade secrets has been regulated by the Trade Secrets Protection Act (Wbb), the Dutch implementation of European Directive (EU) 2016/943 on the protection of undisclosed know-how and business information. Under this Act, it is unlawful to obtain, use, or disclose a trade secret without the permission of the holder. The Act harmonizes protection across the entire European Union, which is important for companies operating across borders. We advise on the scope of the Act, assess whether your information falls within the scope of protection, and ensure that your confidentiality is upheld across borders.

The three cumulative requirements for protection

Not all confidential information is a protected trade secret. The Trade Secrets Protection Act sets three cumulative requirements, all three of which must be met simultaneously:

• Secret: the information is not generally known or easily accessible to persons within the circles that normally deal with this type of information.
• Commercial value: the information has a commercial value precisely because of its confidential nature, for example, an advantage over competitors.
• Reasonable measures: the holder has, given the circumstances, taken reasonable measures to keep the information confidential.

The third requirement, in particular, is underestimated in practice. Without demonstrable measures, protection lapses, no matter how valuable the information is. We assess your information against these three requirements and help structure the file so that you can actually demonstrate the protection in the event of a dispute.

Protecting trade secrets: NDA and internal measures

The law only offers protection if you take reasonable measures yourself. A non-disclosure agreement (NDA) is the best-known example of this. An NDA is doubly useful: it proves that you have taken reasonable measures, and in the event of a breach, it creates an independent contractual claim alongside the statutory entitlement, often reinforced by a penalty clause. In a good NDA, you specify which information is confidential, for what purpose it may be used, who is granted access, and for how long the confidentiality lasts. In addition, we advise on supplementary measures: confidentiality and non-solicitation clauses in employment contracts, the need-to-know principle, access security and encryption, and a clear internal policy. For the commercial exploitation of your know-how under conditions, we draft license agreements that guarantee confidentiality.

Infringement of a trade secret: your remedies

If your trade secret is unlawfully obtained, used, or disclosed, the Trade Secrets Protection Act offers a robust package of measures. The court may, among other things, order:

• a prohibition or cessation of the use and disclosure of the trade secret;
• recall of infringing goods from the market;
• destruction of infringing goods or of the documents and files containing the secret;
• compensation, whereby the damage can be estimated at at least a reasonable user fee (royalty) and, in the event of culpability, at the full damage suffered, including loss of profit and reputational damage;
• a reasonable and proportionate order for costs.

In practice, proving infringement is often the most difficult part. Where necessary, we combine evidence seizure, judicial custody, and expert examination to substantiate the infringement, and choose between summary proceedings for a quick injunction or full proceedings for damages.

Litigate without revealing your secret

A legitimate concern in proceedings regarding trade secrets is that the secret might become public knowledge precisely because of the litigation. The legislature has addressed this in the special procedural rules of Title 15a of Book III of the Code of Civil Procedure (Articles 1019ia to 1019ie of the Code). The judge may restrict access to confidential procedural documents to a small circle, for example, the lawyers and one representative per party, and hold the hearing behind closed doors. In addition, professional secrecy and the lawyer's duty of confidentiality apply, providing an extra safeguard against further exposure. We structure the proceedings in such a way that your secret remains protected while you obtain justice.

Trade secrets and (former) employees

Many infringements do not come from the outside, but from within: a departing employee taking customer data, price lists, or technical knowledge to a competitor or their own company. The Trade Secrets Protection Act offers protection in this regard, but practice calls for a combination of measures: a watertight confidentiality clause, possibly a non-compete or non-solicitation clause, and a careful exit procedure. If things go wrong, we act quickly with cease and desist letters, summary proceedings, or attachment. In doing so, we represent the interests of both the employer whose secrets are leaking away and the entrepreneur or employee who is wrongly accused of infringement.

Frequently asked questions about trade secrets

Is a trade secret the same as intellectual property?

Not entirely. A trade secret is not a registered IP right like a patent or trademark, but an additional form of protection within Intellectual Property (IP) law. However, it can overlap with copyright or patent law.

How long is a trade secret protected?

Unlike a patent (maximum of twenty years), a trade secret has no fixed term. The protection continues as long as the information remains secret and the three statutory requirements are met.

Do I still need an NDA now that there is a law?

Yes. The law only provides protection if you take reasonable measures yourself. An NDA proves those measures and gives you an additional contractual claim in the event of a breach, alongside the statutory protection.

Trade secrets lawyer and legal expert: contact us

Whether you are an international corporation looking to safeguard your R&D position or the baker around the corner with a unique recipe, our mixed teams of lawyers and in-house counsel help you protect trade secrets watertight and take decisive action in the event of infringement. From drafting an NDA and internal confidentiality policy to proceedings while maintaining confidentiality. View our Intellectual Property (IP) expertise or contact us to discuss the possibilities.