45. Let me also briefly give you an overview of the framework and then of the content of our recently adopted Trade Secrets Directive. Companies invest in acquiring, developing and applying know-how and information. This investment in intellectual capital has an impact on their competitiveness and innovative performance in the market and therefore on their benefits and motivation for continuing innovation.
46. This valuable know-how and business information that is intended to remain confidential is what we know as a trade secret.
47. As the US mentioned, this covers a wide range of information, which extends beyond technological knowledge to commercial data such as information on customers and suppliers, business plans and market research and strategies.
48. Trade secrets play an important role in protecting the exchange of knowledge between businesses, in particular SMEs and research institutions in the EU in the context of research and development and innovation.
49. The ex-post evaluation of the 7th EU Research Framework Programme concluded that 64% of the projects report no patenting activities and 60% of the projects opted for secrecy as intellectual property avenue. This shows how often trade secrets are the tools that are used by small companies, companies who do not have extensive financial resources, that do not have lawyers at their disposal to protect their intellectual property and opt for a more economical and more effective model to keep some information confidential.
50. This is one of the main reasons why the EU considered it necessary to adopt the Trade Secrets Directive and harmonize the protection of undisclosed know-how and business information to the extent of civil litigation because that is the area for which we have clearly established competence. It was not possible at the current stage to adopt similar legislation for criminal infringement and criminal litigation regarding the theft of trade secrets. The Directive was adopted on 8 June 2016 and, as is often the case in Europe, is subject to an implementation period by national legislation, as it is not directly applicable. It requires each Member State to adopt its own laws that put in place the system; Member States will have until 9 June 2018 to do so.
51. Before the adoption of the Trade Secrets Directive there was great diversity of systems and definitions in European Union Member States as regards the treatment and the protection of trade secrets. This new Directive brings legal clarity and a level playing field to all European companies. It applies to all companies operating in Europe. It also helps to increase their interest in the development of research and innovation activities.
52. The recently adopted Directive sets out rules for the protection of trade secrets and confidential information of companies who are operating in the European Union. It lays down common measures against the unlawful acquisition, use and disclosure of trade secrets, and aims at ensuring the smooth functioning of the European Union's internal market.
53. It is also intended to have a deterrent effect against the illegal disclosure of trade secrets while at the same time fundamental rights and freedoms or the public interest, such as public safety, consumer protection, public health, environmental protection and mobility of workers are not undermined.
54. While the Directive provides for measures preventing the disclosure of information to protect the confidentiality of trade secrets, the new measures fully ensure that investigative journalism can be exercised without any new limitations, including with regard to the protection of journalistic sources. The directive is in compliance with the EU's Charter of Fundamental Rights, which preserves freedom and pluralism of the media.
55. There will also be no limitation to employees' use of the experience and skills honestly acquired in the normal course of their employment. Furthermore, the autonomy of social partners and their rights to enter into collective agreements is not affected by the implementation of the new mechanisms.
56. The new Directive introduces that persons acting in good faith that reveal trade secrets for the purpose of protecting the general public interest, commonly known as "whistle-blowers", enjoy adequate protection. Trade secrets protection does not apply in cases in which the objective was to reveal misconduct, wrongdoing or illegal activity, provided that the respondent acted for the purpose of protecting the general public interest.
57. In accordance with the new legal framework, EU Member States have to provide for the measures, procedures and remedies necessary to ensure the availability of civil redress against the illegal acquisition, use and disclosure of trade secrets. These have to be fair, effective and dissuasive. They must not be unnecessarily complicated or costly, nor may they entail unreasonable time-limits or unwarranted delays.
58. The Directive also set outs that trade secret holders are entitled to apply for remedies in case of damages following cases of illegal appropriation of documents, objects, materials, substances or electronic files containing a trade secret or from which a trade secret can be deduced.
59. Also the legislation introduces mechanisms for the removal from the market of goods manufactured on the basis of a trade secret that was illegally acquired. The Directive puts in place mechanisms to ensure that where necessary, confidentiality of trade secrets is preserved during the course of and after the legal proceedings. Actually, we found it was often the case that a company that had suffered the misappropriation of its trade secrets and then went to court to make its right prevail, the court was not equipped to address these kinds of cases and often the company had no option, but to reveal its trade secrets. This was fairly illogical and an unreasonable process. We have therefore introduced mechanisms that equip courts to judge these cases with the necessary level of confidentiality so that the company does not suffer twice this prejudice, first by some illegal means and then by court proceedings. That is a very important element of the Directive. For the rest I will let you have a more detailed assessment but these are the main points I wanted to make today.
