Trade secrets refer to various types of confidential business information. That is, technical, commercial, or financial information that is not readily ascertainable by the public. Under TRIPS Article 39, information is eligible for trade secret protection if it is identified, substantial, and secret. Trade secrets help give businesses a competitive edge.

Legislation, Registration, and Enforcement Information

Trade secret protection is afforded without registration and can last indefinitely, if the business can ensure that confidentiality is maintained. Difficulty arises when the trade secret involves an invention or patentable product, however, because companies must consider the costs and benefits between obtaining protection by considering the scope of legal protection that a patent would provide versus trying to maintain the entirely confidential information in-house. When companies make this decision, they should consider the gravity of confidential information involved, the product’s projected use, the scope of the competitive advantage the company maintains by having the information, and the company’s ability to keep the information confidential.

The difficulty in evaluating what, if any, protection to obtain, is identifying the gravity of allowing the information to go public. Once a trade secret is revealed, that company’s competitive advantage may be lost. Trade secret holders should, at minimum, create confidentiality provisions in contracts with those who will have access to the information and consider what legal remedies may be sought if the information becomes public or is illegally disseminated. Confidentiality and Non-Disclosure Agreements (NDAs) might also be worth considering when others (clients, colleagues, or employees) may have access to confidential business information.

International Law

TRIPS Article 39 allows sanctions against procurement, use or disclosure of a trade secret, through application of the laws on unfair competition or practices. Further, if your company created confidentiality provisions by way of an NDA, a violation of a confidentiality clause may provide grounds for a breach of contract claim.

European Union Law

There are no EU-wide laws that protect trade secrets, but there are multiple European Directives and Regulations that protect data submitted for registration purposes. It is important to discover what data your company is trying to protect and which relevant European legislation applies to determine exactly how to protect your company’s trade secrets.

Trade Shows

Given that a vast majority of products and technologies are introduced into the EU market via trade fairs, US companies interested in entering the EU market should consider taking full advantage of the business opportunities presented at these events.

EU trade fairs provide excellent opportunities for monitoring international infringement of your IPR. The larger trade fair organizers offer some sort of legal advice during trade fairs, either thru in-house lawyers or affiliated law firms. They are, however, not in a position to act on behalf of (or against) exhibitors unless there is a court decision that clearly stipulates that such an action is legally justifiable (could be an injunction or court order).

If your company decides to participate in a trade fair, it is wise to complete the following:

• Register your IPR before you exhibit at a trade fair.
• Register with an EU Member State’s Customs Authority if you believe that another exhibitor will be infringing your rights.
• Bring documentation with you to the trade fair; you must be able to demonstrate your ownership. Copies of your patent or trademark rights will suffice.
• Be aware that at many EU Member State trade fairs, organizers do not themselves determine which party is guilty of unauthorized copying – that is left to a legal process. They are, in fact, prohibited by law from actually closing down a trade fair booth during the show. The organizers are, however, generally willing to remind an exhibitor of his/her responsibilities under the anti-piracy clause not to knowingly copy the IPR of other exhibitors – and that helps dissuade some.
• Contact the US Commercial Service in the Member State where you will participate in a trade fair for detailed information on IPR protection activities of the individual trade fair organizers.
• Take steps to protect your trade secrets (anything that has commercial value because it is secret, such as pricing methods, key ingredients, customer lists.) To make a claim against a violator, you need to show not only that the secret has value but that its value derives from the fact that it is secret. You also need to show that you have taken reasonable steps to ensure its secrecy. This may mean restricting access to only those parties with a clear need-to-know AND requiring those persons with access to sign non-compete and non-disclosure agreements.

If you suspect that another exhibitor is copying you, consider taking the following steps:

• If you believe in advance of a trade fair that a competitor may infringe your company’s EU registered rights, contact Customs at the relevant Member State, register with them, and inform them about your suspicion. German customs authorities have the right to seize infringing products, sometimes even at the fairgrounds. Contact the US Commercial Service for further information.
• At the trade fair, check out exhibitors you suspect of copying. If you see an exhibitor you suspect of copying your IPR, try to obtain a sample and/or brochure plus their contact information. Contact the fair organizer’s legal department, if available, to discuss your options and seek their assistance. Some fair organizers have staff on hand, which are able to provide counseling and other help. Also inform the US Commercial Service. We cannot provide legal counsel but can help you consider options and contact a lawyer if advisable.
• Check a Member State’s Declaration of Forbearance. A lawyer can work with you to draft a Declaration of Forbearance and serve it on the alleged copier. Upon accepting it, the alleged copier agrees to voluntarily withdraw product(s) in question, remove (or black out) any references in catalogs, etc., as well as pay the lawyer’s fee for drawing up the Declaration of Forbearance (starting at about 200 euros, for example, in Germany).
• If the exhibitor refuses to sign, a Preliminary Injunction may be necessary. The procedure entails a lawyer taking proof, provided by the US exhibitor (copies of registrations, letters, faxes, or e-mails showing that the alleged copier had previously procured samples from the US exhibitor, etc.) to a judge. The preliminary injunction prohibits the alleged IPR-copier from exhibiting or selling the products in question, until the issue becomes a court case in which rights are clarified.
• Some trade show areas are legally declared a “customs border area,” where seizures can be made before an infringing exhibitor is served with orders.

What You Can Do to Protect Your Intellectual Property

Making regular audits of the existence or registration of your company’s rights is key to protecting your intellectual property. If possible, maintaining a small in-house lawyer/legal team may also help your business protect its intellectual property. It may also be wise to consider withholding trade secrets or other sensitive business information from vulnerable markets where infringement is common. Using due diligence is always a must when your intellectual property is involved. If you have diverse products, testing a potentially unreliable market with an older product may also be a wise choice. Also, register with an EU Member State’s Customs Authority in advance of trade show participation.

It is important to note that only when intellectual property is properly protected may a company initiate legal action for infringement. According to a study commissioned by the EU, 80% of small businesses fail to register patentable rights. The study also demonstrated that many SMEs are unaware that having patent or trademark protection in one country does not protect that product from potential infringement in other areas of the world.

What the US Government Can and Cannot Do

Many companies, particularly SMEs, which discover that their products are being infringed in the EU, contact the US Embassy in the Member State where the infringement occurred or the Department of Commerce in Washington for assistance. Because intellectual property rights are private rights, the US government can provide only limited direct assistance. In many cases, the US government can provide companies with information to aid in navigating the EU's legal system, including lists of local investigative firms and attorneys, and share experiences and expertise in the EU. However, the government cannot provide American companies with legal advice or advocate on a company's behalf when a matter is before a court or administrative agency.

When a company encounters blatant infringement of its IPR, the rights holder should hire local counsel and pursue a preliminary investigation, or through a contracted professional firm, keeping in mind that US companies should ensure compliance with EU law. Once the initial investigation is complete, the company should determine whether it is worth pursuing further action, especially considering possible costs. Rights holders have the option to initiate actions or seek redress through either the judicial or administrative systems.

Once a company decides to pursue a remedy, the US government will monitor the case, if requested to do so by the company. The Department of Commerce maintains a database of IPR disputes, which US companies bring to government's attention. The US government cannot intervene in these cases. However, the government can inquire about their status or contact EU government officials about concerns related to the effective administration of legal remedies available to IP holders as a general matter. As with other types of commercial disputes, US government efforts to assist with IPR disputes are aimed at achieving a fair and timely resolution in accordance with international commitments and EU laws, and in advancing adequate legal and judicial protection for all parties.

Other Reference Materials and Links

Business Europe’s Guide to Intellectual Property Rights for SMEs in Europe:
http://212.3.246.117/docs/1/JPPDAIMAOGLJAPGPHICEANLPPDB39DBNGY9LI71KM/UNICE/docs/DLS/2007-00641-EN.pdf

Charter of Fundamental Rights:
http://ec.europa.eu/justice_home/unit/charte/en/charter-freedoms.html

Collection of Laws for Electronic Access (CLEA):
http://www.wipo.int/clea/en/index.jsp

Doing Business in the European Union: A Guide for US Companies:
http://www.buyusa.gov/europeanunion/two_zero_zero_seven_ccg.pdf

Directory of WIPO Member State Intellectual Property Offices:
http://wipo.int/directory/en/urls.jsp

International Chamber of Commerce’s Roadmap for Business and Policy Makers:
http://www.original-ist-genial.de/fileadmin/icc_dokumente/IP_Roadmap-2007.pdf

Intellectual Property Helpdesk (free service created by the European Commission’s Directorate-General for Enterprise):
http://www.ipr-helpdesk.org/index.htm

Intellectual Property Provisions in European Union Trade Agreements, Implications for Developing Countries, Maximiliano Santa Cruz S., (June 2007):
http://www.iprsonline.org/resources/docs/Santa-Cruz%20Blue20.pdf

International Treaties and Conventions on Intellectual Property:
http://wipo.int/export/sites/www/about-ip/en/iprm/pdf/ch5.pdf

List of European Union Intellectual Property Laws:
http://www.law.stanford.edu/program/centers/ttlf/law/eu/ip/

Member States Industrial Property Offices:
http://oami.europa.eu/en/links.htm

Stop Fakes:
http://www.stopfakes.gov/

Study: Effects of counterfeiting on EU SMEs and a review of various public and private IPR enforcement initiatives and resource:
http://www.ec.europa.eu/enterprise/enterprise_policy/industry/doc/Counterfeiting_Main%20Report_Final.pdf

The European Commission’s Strategy for the Enforcement of Intellectual Property Rights in Third Countries:
http://trade.ec.europa.eu/doclib/docs/2005/april/tradoc_122636.pdf

United States Mission to the European Union’s Department of Commerce:
http://www.buyusa.gov/europeanunion

United States Trade Representative Special 301 Report:
http://www.ustr.gov/Document_Library/Reports_Publications/2007/Section_Index.html

World Intellectual Property Organization (WIPO):
http://wipo.int/portal/index.html.en

World Intellectual Property Organization Member States:
http://wipo.int/members/en/