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The Trade Secrets (Enforcement, etc.) Regulations 2018

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EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations implement provisions of Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (OJ L157, 15.6.2017, p.1) (“the Directive”). A number of the provisions of the Directive, in particular the provisions in Chapter II and Articles 6, 7 and 16, have been implemented in the United Kingdom by the principles of common law and equity relating to breach of confidence in confidential information, and by statute and court rules. These Regulations address those areas where gaps occur or where the implementation of the provisions of the Directive in the United Kingdom, across its jurisdictions, may be made more transparent and coherent.

Regulation 2 defines the terms “infringer”, “infringing goods”, “trade secret” and “trade secret holder” in accordance with Article 2 of the Directive and adds a definition of “court”.

Regulation 3(1) makes clear that the issue of whether the acquisition, use or disclosure of a trade secret is unlawful is determined by reference to the principles of the law of confidence. Where the measures, procedures and remedies available in an action for breach of confidence offer wider protection to a trade secret holder than that offered under the Regulations, the trade secret holder may apply for, and a court may grant, them provided they comply with the safeguards referred to in Article 1 of the Directive (Regulation 3(2)). The measures, procedures and remedies referred to in regulation 3(2) are in addition, or an alternative, to the measures, procedures and remedies provided under these Regulations in respect of the unlawful acquisition, use or disclosure of a trade secret (Regulation 3(3)).

Regulations 4 to 9 make provision for limitation and prescriptive periods applicable to proceedings for claims for the unlawful acquisition, use or disclosure of a trade secret and for the application of measures, procedures and remedies under these Regulations. Regulations 4 to 9 implement Article 8 of the Directive. A limitation period of six years is set for England and Wales and Northern Ireland. A prescriptive period of five years is set for Scotland. Provision is made for determining when the limitation or prescriptive period begins to run and for suspending the limitation or prescriptive period on account of disability.

Regulation 10 provides for the preservation of confidentiality of trade secrets in the course of legal proceedings in implementation of Article 9(1) to (3) of the Directive.

Regulation 11 provides for interim measures against an alleged infringer in implementation of Article 10 of the Directive. Where an interim order for delivery up is made, a trade secret holder must retain the infringing goods until an order is made under regulation 14(2) that the goods be forfeited to the trade secret holder or destroyed. A time limit is set within which a claim must be brought after an interim order has been made. As an alternative to interim measures, a court may require guarantees to be lodged by the alleged infringer to compensate the trade secret holder. A court may also require a trade secret holder to provide adequate security to compensate an alleged infringer for any prejudice suffered.

Regulation 12 provides for the matters a court needs to consider before making an interim order under regulation 11(1). Regulation 12 implements Article 11(1) and (2) of the Directive.

Regulation 13 provides for revocation of an order made under regulation 11(1) where a trade secret holder does not bring proceedings before a court within the specified period or in certain other circumstances. Where a measure ordered is revoked, a court may order payment of appropriate compensation to the alleged infringer or injured third party. Regulation 13 implements Article 11(3) and (5) of the Directive.

Regulation 14 provides for injunctions, or interdicts in Scotland, and corrective measures which may be imposed on an infringer. These measures include requiring an infringer, at his expense, to recall the infringing goods from the market, to deprive them of their infringing quality, to destroy the infringing goods or to withdraw them from the market. When ordering the withdrawal of the goods from the market, a court may require the goods to be delivered up and forfeited to the trade secret holder. Regulation 14 implements Article 12 of the Directive.

Regulation 15 sets out the matters to be considered when making an order under regulation 14 and implements Article 13(1) and (2) of the Directive.

Regulation 16 enables a court to order compensation instead of an order under regulation 14 under certain conditions. This implements Article 13(3) of the Directive.

Regulation 17 sets out the factors that need to be taken into account when making an award of damages for the unlawful acquisition, use or disclosure of a trade secret. This implements Article 14 of the Directive.

Regulation 18 makes provision for the publication of information relating to judicial decisions in proceedings for the unlawful acquisition, use or disclosure of a trade secret. This implements Article 15 of the Directive.

Regulation 19 makes clear that the Regulations apply only to proceedings brought before a court after the coming into force of these Regulations in respect of a claim for the unlawful acquisition, use or disclosure of a trade secret and for the application of measures, procedures and remedies provided for under these Regulations.

A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sector is foreseen. A transposition note is available from the Intellectual Property Office, Concept House, Cardiff Road, Newport NP10 8QQ and is available with the explanatory memorandum alongside this instrument on the Legislation UK website at www.legislation.gov.uk. Copies have also been placed in the libraries of both Houses of Parliament.

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