EU Trade Secrets Directive enters into force

Since 2018 the Dutch Trade Secrets Protection Act has protected your know-how and business information, provided you take reasonable steps to keep them secret. What the EU directive set out and what applies now.

Update November 2026: this article dates from 2016, when the directive had just entered into force. The Netherlands implemented the directive in the Dutch Trade Secrets Protection Act (in Dutch), which has applied since 23 October 2018. The three conditions for a trade secret are set out in Article 1 of that Act. The third condition is that, given the circumstances, you have taken reasonable steps to keep the information secret. A confidentiality clause as mentioned below can be such a step. Besides an injunction, as the holder of the secret you can claim damages from an infringer who knew or ought to have known that they were acting unlawfully (Article 8). If you are working with a factory or development partner on a new product, the R&D agreement explains how to protect your trade secrets in that collaboration. Trade secrets in fashion and design sets out which steps a fashion brand or design studio takes and what to do when someone leaves with your information.

Earlier this month the European directive on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure entered into force. It is also known as the “Trade Secrets Directive”.

The background to the directive is that businesses often invest heavily in acquiring, developing and applying know-how and information: they invest in intellectual capital. This affects their competitiveness and their capacity to innovate in the market. The trade secrets in which this know-how is contained were not well protected under the existing law against unlawful acquisition, disclosure or use by other parties. Businesses usually protect know-how by imposing confidentiality obligations, which is far from always enough.

The directive was introduced to protect trade secrets better. It protects trade secrets such as technological knowledge, research data, commercial information or business strategies. To qualify as a trade secret within the meaning of the directive, information has to meet three conditions: 1) it must be secret, meaning that it is not generally known among or readily accessible to persons who normally deal with that kind of information, 2) it must have commercial value because it is secret and 3) it must have been subject to confidentiality, for example through a confidentiality clause in the employment contract.

Under the directive it is prohibited to acquire, use or disclose a trade secret without consent. This includes, for example, downloading or copying documents that contain trade secrets. A former employee who shares secret information with a new employer is another example. Producing goods by making use of a trade secret without consent is also contrary to the directive.

The directive makes an exception for so-called whistleblowers. They reveal trade secrets to protect the public interest. In such cases the national court will have to decide whether disclosing the trade secret was necessary to expose misconduct or illegal activity by the business. If it was, the whistleblower will receive appropriate protection.

Where a trade secret is used unlawfully, the directive allows a claim for, among other things, an order to stop the use or disclosure of the trade secret, a ban on producing infringing goods and the return or destruction of documents containing the trade secret.

The EU member states have two years to bring their legislation into line. In the Netherlands, preparations to implement the directive in Dutch law have already begun.