News

Trade Secrets Become a Higher Priority for Europe

May 1, 2014
Categories: Trade Secret Theft

By Allen Dixon, CREATe.org IP Counsel

As innovative companies rely more and more on their own confidential technology, processes and business know-how to stay competitive, the European Union continues its work to protect these valuable ‘trade secrets’ more consistently and more effectively across Europe.

“Cybercrime and industrial espionage are unfortunately part of the reality that businesses in Europe face every day. We have to make sure our laws move with the times and that the strategic assets of our companies are adequately protected against theft and misuse,” the European Commission explained.

CREATe.org participated in the EU’s 2012 hearing on trade secrets, where companies such as Alstom, Dupont, Michelin and AMSC described how local business partners, licensees, and current and former employees had allegedly expropriated and used these companies’ proprietary technology and know-how to their own advantage – through misuse of confidential material, compromising of employees, transfer of hard discs and computer files, and simple theft of prototypes.

The Commission’s proposed trade secret ‘directive’ would define trade secrets and establish EU-wide rules to deal with unauthorized access, disclosure and use of such material.  But the Commission has also recognized that companies themselves have a crucial role to play – taking ‘reasonable steps under the circumstances’ to keep this material secret.

The Commission’s Head of Unit dealing with trade secrets Jean Bergevin recently told a World Intellectual Property Organization (WIPO) meeting covering a broad range of intellectual-property issues that “we would wish to encourage such due diligence to be applied throughout the relevant chain so that it stretches to what are often termed as, second, third or fourth tier suppliers.”

CREATe.org’s Leading Practices for protecting and managing trade secrets and other intellectual property are entirely consistent with the Commission’s vision of collaborative and best-practices efforts among the private sector that complement any laws that might be in place.  After completing the CREATe.org self-assessment and independent evaluation, the German company Arvato noted the usefulness of this approach: “IP protection is definitely a competitive advantage. It is at the core of our business. The more we secure our IP, the better it is for our company. CREATe Leading Practices complements our approach and can be built onto our existing management system to better protect our trade secrets and other intellectual property.” 

Given that the value of misappropriated trade secrets can be 1-3% of a country’s GDP, according to recent estimates in a CREATe/PwC report, efforts such as the EU’s proposed law and CREATe.org’s best practices for the private sector can make an important difference for businesses that depend on trade secrets, and intellectual property more generally, to maintain their competitive edge!

CREATe.org Trade Secret Resources – Free Downloads