ICC issues business guidance and recommendations for policymakers on trade secrets

ICC report at a glance

The ICC report outlines the differences between the EU and US laws and provides guidance for businesses on how to identify information which can be protected as trade secret, assess risks and ensure adequate protection. The report also includes recommendations for policymakers worldwide on the establishment or reform of trade secret protection frameworks.

What is a trade secret?

A “trade secret” is a piece of information treated as confidential by an enterprise because its particular features and limited access provide a competitive advantage to its owner. Trade secrets can range from technical information, such as designs, drawings, or blueprints, to business information, including lists of suppliers, distribution methods, and marketing plans.

New EU and US legislation

Trade secrets protection has become increasingly important for companies due to the globalisation of trade, interconnected supply chains, open innovation approaches and easier transmission of information due to digitisation and ICT. In 2016, pioneering legislation aimed at furthering the protection of trade secrets for business was introduced in the EU (Trade Secrets Directive, currently under implementation in EU Member States) and the US (Defend Trade Secrets Act).

Identifying and managing trade secrets – practical guidance

Businesses often struggle with determining what information can qualify for trade secret protection. The ICC report explains how the legal requirements of secrecy, commercial value and reasonable steps to preserve secrecy can be achieved in practice by assessing the risk environment and taking risk mitigation measures such as labelling procedures, physical and electronic security safeguards, and monitoring and awareness raising of employees, customers and partners.

5 key recommendations for policymakers

1. Trade secrets as “intellectual property”

Whether or not national governments officially categorise trade secrets as intellectual property, ICC recommends that at the very least they should receive the same degree of protection.

2. Access to proof of misappropriation

ICC recommends that lawmakers should be mindful of the difficulties to obtain direct evidence that trade secrets have been misappropriated without help from the courts. Solutions like making possible an early production of records by parties in litigation, or adapted rules on burden of proof, could be introduced.

3. Protection of trade secrets during litigation

ICC encourages policymakers to ensure the confidentiality of trade secrets during the course of judicial proceedings, in line with the EU and US laws which have expanded the use of closed proceedings to limit the spread of confidential information to the public.

4. Award of damages and costs

In order to provide maximum deterrence against misappropriation of trade secrets, ICC calls on national governments to ensure that their laws provide for damage awards that grant full compensation to victims, including recovery for profits lost but also for the unfair advantage obtained by the defendant.

5. Exceptions to trade secrets

ICC calls on governments to strike a balance between public policy considerations and the protection of trade secrets when establishing exceptions to liability for the disclosure of trade secrets, so as not to override legitimate trade secret rights on pre-textual grounds.

 

Read the full recommendations for policymakers on trade secrets.

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