Before the transposition in French law of the European directive 2016/943, there was no legal definition of trade secrets. The French Conseil d’Etat made in that sense the following observation before transposition: “the protection offered (was) the result of the application of civil liability and criminal offences case-law that could only lead to an imperfect protection of trade secrets”.
In 1986, a statutory instrument had introduced protective provisions allowing the President of the competition & market authority to refuse disclosure of documents involving trade secrets to certain parties. In 2009, a decree required the competition & market authority to publish its decisions while protecting any trade secrets content. Meanwhile, the case law of the Court of cassation considers that “trade secret does not constitute itself an obstacle to the application of article 145 of the Code of civil procedure”. Today, this case law may be contrary to the protection of trade secrets provided by the trade secrets law of 30 July 2018. However, in a recent case, the Court of cassation considered that the judge seized of an article 145 pretrial investigation shall take into consideration the interests of both parties and the potential risk of trade secrets disclosure in order to take appropriate measures. It will be interesting to follow-up the evolution of the case law on that point.
The existing protections of trade secrets before the law of 30 July 2018 were limited in scope and confined to specific areas, hence there was neither trade secrets definition nor specific protective measures. The new trade secrets law has compensated this lack of protection by introducing real legal tools.
Trade secrets
The trade secrets law defines as trade secrets any information that is not accessible to all, has an effective or potential commercial value and is protected. In order to protect these trade secrets, companies are invited to identify, classify and put in place security tools. To this end, a trade secrets adviser can be appointed within the company.
Violation of trade secrets is constituted by unlawful acquisition, use and disclosure of trade secrets. The acquisition of a trade secret shall be considered unlawful, whenever carried out by unauthorized access to documents containing the trade secret or from which the trade secret can be deduced. It can also result from any conduct which, under the circumstances, is considered contrary to honest commercial practices.
The use or disclosure of a trade secret shall be considered unlawful whenever carried out, without the consent of the trade secret holder. For example, the production, placing on the market or importation of infringing goods shall also be considered as an unlawful use of trade secret when the person carrying out such activities knew, or ought, to have known that the trade secret was used unlawfully.
On December 11, 2019, the French government issued a decree detailing the powers of the French judge to take provisional and precautionary measures to stop the unlawful use and disclosure of trade secrets. These measures could also, potentially become a legal tool limiting the article 145 pretrial investigations.
Powers of the judge
The judge is empowered to accord provisional and precautionary measures that can consist inter alia in:
The cessation or prohibition of the use or disclosure of the trade secret.
The prohibition of the production, placing on the market or use of suspected infringing goods.
To seizure or delivery up of the suspected infringing goods, so as to prevent their entry into or circulation on the market.
The judge can also, while according provisional and precautionary measures, require from the plaintiff the lodging of guarantees intended to ensure the potential harm suffered by the defendant. He also can, instead of according provisional and precautionary measures, require from the defendant the lodging of guarantees intended to ensure the potential harm suffered by the trade secret holder.
The judge is also empowered to sequestrate exhibits in order to protect the trade secret. This measure is automatically lifted within one month from the date of decision. Besides these measures, damages can be awarded to the trade secret holder for the harm he suffered.
The practice of communication and production of exhibits has also been secured. The party requesting the protection of trade secrets must communicate to the judge the exhibit containing the secret in three different nature:
The original and complete version of the exhibit.
A non-confidential version resumed.
A note enlightening the reasons why the exhibit shall be considered as a trade secret.
The judge will therefore rule on the type of communication regarding the circumstances of the case. In a case where the exhibit is not necessary to the dispute resolution, the exhibit can be kept secret and not communicated to the opposing party.
Finally, the decree protects trade secrets till the publication of the decision to the public. This way, it is a confidential version of the decision that will be published online.
Conclusion
In a nutshell, the trade secrets law enables any trade secret holder to engage a rapid action to stop the unlawful use or disclosure of its trade secret and restrict as much as possible the irreversible consequences of the harm suffered on top of damage awards. These measures could also, potentially become legal tools limiting the article 145 pretrial investigations.
The application of the trade secrets legal actions to the business practice has yet to prove its worth and we are waiting for the first applications by the French courts.
Paul-Marie GAURY
Références :
Directive 2016/943 of the European parliament of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against unlawful acquisition, use and disclosure.
CE, 15 mars 2018, opinion n° 394422.
Ord. n° 86-1243, 1er déc. 1986, art. 23.
D. n° 2009-186, 17 févr. 2009, art. 1.
Gives litigants the possibility to request a judge to order – before any legal proceedings on the merits – investigations in order to preserve or establish “the evidence of facts upon which the resolution of a dispute might depend”.
Cass. 2e civ., 7 janv. 1999, n° 95-21.934 ; Cass. com., 10 févr. 2015, n° 14-11.909.
Civ. 1ère, 22 juin 2017, 15-27845.
Article L 151-1 of the French commercial Code.
Practical guide for companies use (in French), Cci Paris Ile-de-France.
Article L 151-4 à L 151-6 of the French commercial Code.
Décret n°2018-1126 du 11 décembre 2018 relative to trade secrets.
C. com., art. R. 152-1, II, al. 1er, implemented by D. n° 2018-1126, 11 Dec. 2018, art. 1er.
C. com., art. R. 153-1, implemented by D. n° 2018-1126, 11 déc. 2018, art.1er.