New Trade Secrets Law For France

Author:Seyfarth Shaw LLP
Profession:Seyfarth Shaw LLP
 
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As a special feature of our blog—guest postings by experts, clients, and other professionals—please enjoy this blog entry from Gilles Rouvier, founding partner of Lawways.

Context

On July 31st, 2018, France adopted a law on trade secret protection, loi n°2018-670 (hereafter “French Trade Secret Law“). The aim of this French Trade Secret Law is to offer companies protection for their economic and strategic information. This legislation implements the Directive 2016/943/EU on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use, and disclosure, enacted by the European Parliament and the Council of the European Union (EU) on June 8th, 2016.

France's history as one of the first few members of the EU to produce local legislation specifically addressing trade secret protection dates back several decades. As early as 1968, France had already adopted its flagship measure to prevent the disclosure of information covered by business secrecy. The so-called "Loi de blocage" (i.e., blocking law), n°68-538, was enacted on July 28th, 1968, as a countermeasure to combat such disclosures, to the extent consistent with international treaties. In practice, however, the law was rendered virtually ineffective by foreign legislation, notably U.S. laws providing for the exclusion of any laws depriving U.S. Courts of the right to order the disclosure of documents or information in discovery proceedings.

Following the observable inefficacy of the "loi de blocage," the legal frame for trade secrets in France remained unsettled for years. As a result, sensitive data outside the realm of preexisting intellectual property protections were not effectively protected in France. Therefore, many companies preferred to negotiate, and eventually lose money, rather than go to trial.

This new French Trade Secret Law places French companies on an equal footing with foreign competitors who already benefit from regulated business secrecy, including U.S. and Chinese companies. The French Trade Secret Law was not only needed for these kinds of business issues, but also for privacy issues, as Article 8 of the European Convention on Human Rights (which provides a right to respect for private and family life) applies to legal entities as well as individuals. Based on this principle, corporations could protect their information as if they were physical persons.

These improvements to trade secret protections in the EU and...

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