EU-wide rules to safeguard confidential business information proposed

The protection against the misappropriation of business information and the safeguarding of confidential business practices were discussed during a consultation session organised by the Malta Business Bureau in conjunction with the European Parliament Information Office.

The debate focused on the European Commission’s proposal for a directive on the protection of undisclosed know-how and business information, known as trade secrets, against their unlawful acquisition, use and disclosure. 

The draft directive introduces new EU-wide rules to help protect against the theft of confidential business information and it is now a topical item of debate at the European Parliament.

The discussion brought together MEPs and interested stakeholders from the private sector, who exchanged views on how the draft EU legislation could affect commercial activities in Malta as well as cross-border within the EU internal market.

In Malta, there are no specific provisions on trade secrets in civil law and the enactment of this draft directive would guarantee local business operators the necessary protection via a robust EU framework.

MEP Therese Comodini Cachia, who is a member of the Legal Affairs Committee (JURI), which is the lead committee in charge of the finalisation of the draft directive on trade secrets, provided a background explanation to the proposal and elaborated on the next legislative steps at the European Parliament.

She explained how providing a harmonized legal framework on how to register ‘trade secrets’ will strengthen the protection of the whole business value chain. To date, with intellectual property rights, only the final product or service is protected, but not the knowhow of the process leading to it.

This directive is intended to harmonise and promote rules in member states on the illegitimate acquisition of know-how by a company or individual from another. This will most surely be beneficial in the promotion of innovation and investment in research and development and offer a foreseeable protection for litigation.

MEP Miriam Dalli, who is a member of the Industry, Research and Energy Committee (ITRE) tasked with presenting an opinion to the JURI Committee on this directive, stated that the new directive has to reach a balance between the need to remove obstacles for SMEs and the need to protect trade secrets.

She gave an overview of the discussion between different political groups on the matter and stated that she is in favour of the text within the Directive that is expected to reduce the uncertainty of SMEs that currently may be discouraged to undertake cross-border legal proceedings due to different legal provisions in different jurisdictions. 

As things stand today, lack of trade secrets' protection has impacted innovation and research and development negatively. Moreover SMEs do not have the financial and human resources to undertake legal proceedings which can be expensive and lengthy.

MEP Dalli also said that the Socialist and Democrats are in favour of having a directive which provides legal rights and access to information to the parties in litigation, which guarantees employee mobility and which guarantees a fair litigation process particularly for small enterprises.

The session included also interventions by business organisations and public authorities who suggested possible amendments to the MEPs with a view to the Committee proceedings on the dossier taking place in Brussels as from next week. The dossier is expected to be voted in plenary later this year.

The session was moderated by MBB CEO Joe Tanti and the Head of the European Parliament Information Office Peter Agius. This consultation event was a first in a series of collaboration activities between the two organisations, which are intended to actively involve Maltese MEPs in a continued exchange of views with the local business community concerning ongoing EU legislative proposals.