On September 4, 2018, an amendment to the Law on Combating Unfair Competition came into force. The purpose of the amendment is to implement Directive 2016/943 of the European Parliament (EU) of 8.06.2016 on the protection of business secrets.
New definition of business secrets.
In light of the amendment, a "business secret" is defined as information having economic value that is not generally known to persons normally dealing with this type of information, or is not readily available to such persons, to the extent that the person authorized to use or dispose of the information has taken, with the due diligence, actions to keep them confidential.
The appearance of a due diligence claim can cause problems in determining whether information has been adequately safeguarded by the entrepreneur. Until the first rulings on the subject emerge, it is impossible to say whether the safeguards used so far will be sufficient.
What activities can we count as activities that violate company secrets?
The legislator has determined that the acquisition, use or disclosure of information constituting a business secret constitutes an act of unfair competition that violates a business secret.
The law, however, introduces numerous exceptions to the recognition of behavior as an act of unfair competition:
- when it was done to protect a legitimate interest protected by law;
- In the exercise of freedom of expression;
- to uncover irregularities, misconduct, acting in violation of the law to protect the public interest.
The exclusion of liability under freedom of expression may be problematic in this regard. On the other hand, the third subsection indicated above reflects a tendency to support so-called whistleblowers.
Civil law means of protecting secrecy.
In the case of an act of unfair competition involving violation of business secrets, new sanctions will be possible, including:
- upon request, the court may oblige the defendant to pay the plaintiff appropriate remuneration, in an amount not higher than the remuneration that would have been due at the time of its assertion for the right holder's permission to use the information, for a period of time not exceeding the cessation of the state of secrecy;
- the authorized party may demand, instead of damages, compensation for the damage by paying a sum of money in an amount equivalent to the remuneration that would have been due at the time of its assertion for the authorization of the authorized party to use the information constituting the company secret.
The problem of employee liability.
Previously, Article 11 of the law in question read "It is an act of unfair competition to communicate, disclose or use someone else's information that constitutes a business secret (...) The provision of paragraph (1) shall also apply to a person who provided work on the basis of an employment or other legal relationship -. for a period of three years after its cessation, unless the contract provides otherwise or the state of secrecy has ceased."
In light of the current amendments, the law no longer provides for a 3-year period of protection for company information. The ministry points out that the change is aimed at introducing an indefinite obligation for employees to keep company secrets.
However, it may prove problematic for businesses to enforce compliance with this by former employees. The amendment does not provide for the introduction of provisions explicitly stating the applicability of the Anti-Unfair Competition Law to former employees.
In view of the above, it is recommended to modify new contract templates with employees, entrepreneurs, subcontractors, with regard to the protection of business secrets.
