A trade secret is a “valuable piece of information for an enterprise that is treated as confidential and that gives that enterprise a competitive advantage”.
Companies manage to constantly develop new information that is helpful in order to obtain a better performance, though different methods, such as: research, decades of experience, a or sudden burst of creativity. Therefore, information protected through a trade secret can be strategic for decades (for example, a recipe or a chemical compound), or ephemeral (for example, the results of a marketing study, the name, price and launch date of a new product, or the price offered in a bidding procedure).
Practice has proven that nowadays information, knowledge, inventiveness and creativity are the raw materials of the new economy, making trade secrets vital for companies both large or small, in all economic sectors. However, while large companies have the resources to manage a large portfolio of intellectual property rights, such as patents, smaller companies often cannot afford to do this - therefore their reliance on trade secrets is greater.
At the European Level, a new directive was adopted on 8th of June 2016 with respect to the protection of trade secrets, in order to introduce a more uniform approach across the EU, directive also known as the European Union directive on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (hereinafter referred to as the “EU Trade Secrets Directive”) . The aim of the Directive is to have common measures throughout the EU market against the unlawful acquisition, use and disclosure of trade secrets. It is also intended to have a deterrent effect against illegal disclosure. Member States were required to comply with it by 9th of June 2018.
In Romania the EU Trade Secrets Directive received a late implementation through Government Emergency Ordinance no. 25/2019, which entered into force on 19 April 2019, making it still difficult to determine the full extent of its impact upon the national market. A key aspect, however, is that the above-mentioned Ordinance appears to closely implement the provisions in the EU Trade Secrets Directive and that there are no significant deviations.
This new law defines and protects trade secrets by reference to the Law No. 11/1991 and information that is not generally known or easily accessible, its secrecy making it valuable and needing additional measures in order to be maintained. Protection covers its divulgation, acquisition and use without the owner's consent. However, it provides certain exceptions in some cases and under clear conditions for:
(i) Exercising the right to freedom of expression .
(ii) Revealing misconduct, wrongdoing or illegal activity.
(iii) Disclosure by workers to their representatives as part of the legitimate exercise by those representatives of their functions .
Confidentiality obligations in employment contracts are also provided in the Labor Code.
The Ordinance defines commercial secret as “any information that is secret, in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question” . The ‘infringer’ is any natural or legal person who has unlawfully acquired, used or disclosed a trade secret.
In order to protect the trade secret, the trade secret holder can make and inquiry to the competent judicial authorities for measures against the alleged infringer, as well as the possibility of obtaining compensation and penalties in the case of unlawful acquisitions and the use and disclosure of information representing trade secrets. The measures ordered by the competent authorities are, as follows:
(i) provisional and precautionary measures against the alleged infringer;
(ii) guarantees intended to ensure the compensation of the trade secret holder;
(iii) punitive measures in the event of unlawful acquisition, use or disclosure of trade secrets, as well as he prohibition of the production, offering, placing on the market or use of infringing goods, or the importation, export or storage of infringing goods for those purposes.
Failure to comply with the measures ordered by the Court shall be sanctioned by a civil fine that can reach up to 1% of the turnover for legal persons but also with imprisonment from 3 months to 2 years or with a criminal fine for natural persons .
This new Directive and its implementation did not change the existing scope of the information constituting a trade secret, but specified it in a more precise manner.
Attorney at law Daniela Manolea