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The Trade Secrets (Enforcement, etc) Regulations 2018, one year on

07 June 2019

The UK implemented legislation on 9 June 2018 bringing into force the EU Trade Secrets Directive. This article looks at the impact this legislation has had in the employment context where a claim for misuse of confidential information may now also include a statutory claim for misuse of trade secrets.

Interaction with existing UK law

Back in 2018 when the Trade Secrets (Enforcement, etc) Regulations 2018 (the “Regulations”) came into force there was a question mark over how these Regulations would affect existing UK law on the protection of confidential information and trade secrets.  Unlike some parts of the EU, the UK already had well established and substantial protection for employers wishing to prevent employees from taking, misusing or disclosing trade secrets.    

The Government included specific wording in regulation 3 stating that the protections provided for under the Regulations could be granted by a court in addition to, or as an alternative to, existing protections available in an action for breach of confidence.  The inclusion of this language has meant in practice that in appropriate cases parties bringing claims may wish to claim both under the Regulations and under the common law.    

Protecting trade secrets

Since the introduction of the Regulations there has been an increased focus, particularly for international businesses, on how to protect their most valuable confidential information.  A recent report published by the International Chamber of Commerce highlights the value of protecting trade secrets and advises business on the practical measures required to seek protection under both recent US legislation as well as the EU directive.

In the UK, to benefit from protection under the Regulations businesses need to take steps to identify and safeguard the key information they wish to protect.  In particular the information must (a) be secret, (b) have commercial value, and (c) have been subject to reasonable steps under the circumstances to keep it secret.  See our top 5 tips for protecting trade secrets here. 

Where we are now?

At present there are no reported cases on the Regulations so we still cannot fully gauge the impact of the Regulations on the UK’s existing legal framework.  However, we understand that the Regulations are now frequently considered as one of a range of tools which a business might consider when protecting its trade secrets. 

In practice, to cover both types of claims a potential claimant will need to set out the elements of the common law claim for breach of confidence and then go on to set out the elements for a statutory claim under the Regulations.  This is because the elements under each claim are different.  Arguably this has resulted in more complexity in this area of law, and increased costs for potential claimants wishing to pursue both types of claim. 

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