Posts by: Anita Gillior | (1) posts

The (trade) secret of success

We have all heard of success stories such as the Coca-Cola recipe and the Google search algorithm. Many companies value their trade secrets and consider them important for competitiveness and innovative performance.

Although the general understanding is that trade secrets are good for business, there seem to be many incorrect assumptions about their legal protection.

For example, some are under the impression that any own technical or commercial information may be a trade secret, whether kept confidential or not. Others assume that the protection provides exclusive rights that could be invoked against any third party using the information, irrespective of how the information was actually obtained by the third party. Some also take for granted that specific provisions on trade secret protection are in place globally.

Especially Swedish companies may be faced with an unwelcome surprise when realizing the lack of explicit protection in countries where their international business partners operate. In particular when information has already been disclosed without the parties having discussed the delicate nature of the information or a confidentiality agreement.

The fragmented international protection combined with an increase in trade secret theft is an issue that has been recognized by the European Commission. In November last year, a draft directive to harmonize the protection of trade secrets in the EU was presented.

The draft introduces a common definition of trade secrets as well as civil sanctions against misuse. It will surely have a positive effect on cross-border cooperation between business and research partners within the EU, if and when enacted.

As many aspects of the draft text correspond to Swedish legislation, companies that have already introduced a policy and procedure for managing their trade secrets under the Swedish Trade Secrets Act will benefit when it is time to enjoy EU-wide protection of their valuable information.

In the meantime I wish to remind you all that sometimes, silence is golden.

Anita Gillior, Attorney at Law

To hear more on trade secrets you are welcome to our breakfast seminar in Stockholm on April 28. More information and registration (in Swedish)