On 16 October 2018, the Dutch senate passed the Trade secrets protection act (Wet bescherming bedrijfsgeheimen). The act is based on a European directive designed to harmonise the protection of trade secrets within the European Union

The Netherlands previously had no regulations in place protecting trade secrets. The promulgation of this Act is well-timed, given that the protection of trade secrets is becoming increasingly vital in our current era of technological innovation.

Under the new Act, the term ‘trade secret’ must be understood to refer to “information which meets all of the following requirements:

a. it 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;
b. it has commercial value because it is secret;
c. it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.”

Reasonable steps to keep the information secret may include technical and organisational measures, but also, for example, the inclusion of non-disclosure clauses in commercial contracts, employment contracts, and working regulations.

The new Act offers those in lawful control of trade secrets – known as ‘trade secret holders’ – several remedies for obtaining redress from those who unlawfully infringe on their trade secrets. For example, the new prohibition on the use or disclosure of trade secrets will allow trade secret holders to seek judicial relief, which may include the destruction of the infringing goods. Under certain conditions, trade secret holders may also claim damages. Among other things, the new Act also makes it illegal to acquire a trade secret without the holder’s consent if the acquisition is effected by means of unauthorised access to, or copying of, the files containing the trade secret.

The new Act acknowledges the importance of protecting trade secrets while taking the interests of other parties into account. Specifically, the Act also provides that it cannot be invoked to hinder the exercise of the right to freedom of expression, the revelation of misconduct, wrongdoing, or illegal activities, the disclosure of information to employee representatives, or the protection of a legitimate interest recognised by Union or national law.

In short, it is key for trade secret holders to take actual measures to protect their trade secrets. This may be accomplished by taking technical and organisational measures, but also, for example, by entering into non-disclosure agreements. Existing non-disclosure clauses in commercial contracts, employment contracts, and working regulations must be examined carefully to determine whether they are consistent with the assumptions on which the Act is premised.

Please contact Inge de Laat (inge.delaat@rutgersposch.com) for more information.