After several years of negotiations at the European, followed by the French level, a trade secret protection system has finally been put in place in France.
Directive (EU) 2016/943 of June 8th, 2016, the "Trade Secrets Directive", was implemented in domestic law by Law No. 2018-670 of July 30th, 2018, all of the provisions of which were validated by the French Constitutional Council (Conseil Constitutionnel) on July 26th, 2018. Published in the Official Journal on July 31st, 2018, the law entered into force on the next day. The publication of an implementing decree is expected in the coming weeks.
Why protect trade secrets?
The Directive was motivated by the finding that innovative businesses are increasingly exposed to the unlawful misappropriation of their trade secrets (such as customer or supplier records, economic data, management methods, strategic plans, technical or technology know-how or, more generally, information or practices that are not protected by intellectual property rights).
No uniform legal system existed for the protection of business information (trade secrets) either at the European level, or even at the national level. In France, while 151 references to this concept could be found in different codes, laws and regulations, no legislative definition of trade secrets existed.
The objective pursued by the Directive and the law of July 30th, 2018 is thus to introduce a harmonized framework to prevent, enjoin, and obtain remedies for the infringement of trade secrets.
What does a trade secret protect?
The new §L. 151-1 of the French Commercial Code defines trade secrets as information meeting all of the following three criteria: the information (i) is not generally known or readily accessible to persons familiar with this type of information because of their sector of activity; (ii) has real or potential commercial value; and (iii) has been subject to reasonable protection measures intended to preserve its secrecy.
In practice, it is recommended that businesses designate as such any files, records and data they wish to protect as trade secrets. Businesses should also be able to evidence what measures they have taken to protect such information, whether these be technical (restricted access systems, passwords) or contractual (confidentiality clauses).
Pursuant to the new §L. 151-4 of the French Commercial Code, a trade secret acquired without the consent of the trade secret holder is unlawfully acquired, whenever carried...