Trade secrets in your fashion brand or studio: what the law protects and what you arrange yourself

Your tech packs, patterns and supplier list can be a trade secret, but only if you can show you keep them secret. What the law asks and what to do when someone leaves with your information.

Only part of what sets a fashion brand or design studio apart hangs in the shop. The rest is seen only by your own team: tech packs, patterns, costings and the workshops and factories you work with. You can’t register that information as a trade mark or a design. It can still be protected as a trade secret, but only if you take steps yourself to keep it secret. Often you only find out whether those steps were enough when someone leaves and takes your information with them.

Under the Dutch Trade Secrets Protection Act (in Dutch), information is a trade secret if it is not generally known in the industry, has commercial value because it is secret and has been subject to reasonable steps by the person in control of it to keep it secret (Article 1). That last condition asks something of you. The same law also matters when you hire someone who used to work for another brand.

Do you want to set up protection for your trade secrets, or has information already gone? Call 020 675 88 21 or get in touch.

What can be a trade secret in a fashion brand or design studio

A tech pack holds everything a factory needs to make a style, down to the supplier code of the button. The grading of your patterns, your costings and margins, a dye recipe you developed with a workshop and your list of boutiques and their terms can be trade secrets too. Next season’s collection counts as well, for as long as it hasn’t launched.

Protection is still possible when individual pieces can be found somewhere, because the law also looks at the information in its precise configuration and assembly (Article 1(a)). Anyone can look up which factories make knitwear. Only you know which of them meet your quality standard, at what price and from what minimum order.

A jacket in a shop is no longer a secret. A competitor may buy it, unpick it and work out the pattern from it. Under the trade secrets law that is not unlawful acquisition, because anyone may examine and take apart a product that is on sale (Article 3(1)(b)). The design itself may be protected by copyright or design law. Protecting a clothing design explains how that works and when a design counts as disclosed.

Reasonable steps under the Dutch Trade Secrets Protection Act

The Act has applied since 23 October 2018 and implements the EU Trade Secrets Directive in Dutch law. It does not say which steps are reasonable, only that this depends on the circumstances. The explanatory memorandum to the bill gives examples: confidentiality clauses in commercial contracts and employment contracts, access limited to key people and technical security such as encryption (Parliamentary Papers II 2017/18, 34 821, no. 3).

A small studio doesn’t have to work like a multinational. You do need to be able to show that you distinguish between what anyone may see and what they may not. Keep tech packs and costings in a folder that only design and production can open and mark them as confidential. A factory gets the information it needs for its order, not your full cost calculation. Withdraw access on the day someone leaves.

The district court of Limburg showed in 2021 how it goes wrong, in the case of a designer of handmade tiles that look like old church and castle stones (District Court of Limburg, 30 June 2021, C/03/260801 / HA ZA 19-107, in Dutch). His former exclusive distributor had started making almost identical tiles. The designer had sent the distributor a draft contract with a confidentiality clause more than once, but none of them was ever signed. His repeated remarks during the collaboration that the production process had to stay secret did not create an agreement either, because one-sided statements do not amount to consent (para. 4.10.1). Nor did the court see any reasonable steps for the period after the Act came into force. The site and the production hall were not guarded and nothing about confidentiality had been arranged with staff beyond a general clause in their employment contracts (para. 4.17). All claims were dismissed.

Even where the information is a trade secret, your steps keep counting. When deciding on an injunction, the court takes into account, among other things, what you yourself did to protect the secret (Article 7(1)(b)).

Sharing your tech pack with a factory or workshop

A factory can’t make anything without your tech pack, so sharing it is unavoidable. That does not cost you the secret, as long as you bind the factory to confidentiality. The Amsterdam Court of Appeal held in 2020 that a transport company had done enough to keep its journey data secret, because it gave the data only to its client, had agreed confidentiality with that client and repeatedly pointed out the confidential nature of the data to a municipality that wanted it (ECLI:NL:GHAMS:2020:3102, para. 3.13, in Dutch). The facts dated from 2015, before the Act, but the court did assess whether the data was secret, had commercial value and was sufficiently protected.

In a confidentiality clause with a factory or workshop, set out which information is confidential and that it may only be used for your orders. Also agree that patterns and files are returned or destroyed when the collaboration ends. Add that the confidentiality continues after that.

If the factory still uses your patterns for another label, it breaches the agreement that it may only use your information for your orders. That is unlawful use of your trade secret (Article 2(2)(c)). An injunction can then also cover the clothing made with your information. That extends to the brand or shop selling the clothing, if it knew or ought to have known that your trade secret was being used unlawfully (Article 2(4)). If you are developing something new with the factory, such as a material or a technique, the R&D agreement explains what to put in the confidentiality agreement and who will own the result.

A designer or freelancer who leaves with patterns or customer data

Your designers know your patterns, your suppliers and often your customers too. The same goes for a freelancer who worked on your collection. Your agreements largely decide what they may use of that at their next brand. A freelancer is not an employee, so put the confidentiality in the assignment itself.

If someone uses your information in breach of such an agreement, that is unlawful (Article 2(2)(b)). If an employee copies files without permission that they were not meant to have access to, the acquisition itself is already unlawful (Article 2(1)(a)).

Arrange the departure before the last working day is over. Ask for laptops, sketchbooks and samples back, close access to shared folders and supplier portals and have the person confirm in writing that no copies remain. Who owns the rights in the designs themselves is a separate question, covered in the article on employer’s copyright in fashion.

Customer data held by a buyer, agent or former partner

A business partner can’t simply take information from the collaboration with them either. The furniture wholesaler Eichholtz went to the voorzieningenrechter, the judge in The Hague who hears urgent cases, in 2019 against a former customer. That customer had obtained a list of Eichholtz’s customers from a (former) employee and was emailing them with offers of its own. It did not dispute that the list was a trade secret, but said it had not realised the information was confidential. According to the court, the customer ought to have understood that data from the trading relationship could only be used within that relationship (ECLI:NL:RBDHA:2019:13821, para. 4.24, in Dutch).

Within 24 hours the former customer had to stop approaching those customers, on pain of a penalty payment, in Dutch a dwangsom, of €1,000 per breach or per day, up to a maximum of €50,000. It also had to disclose how and through whom it had obtained the data. In the same judgment Eichholtz obtained injunctions based on its design rights and copyright in furniture, so the trade secrets and the design rights were dealt with in a single set of proceedings.

If a commercial agent or showroom works with your customer data, agree what happens to those lists when the collaboration ends. What the outgoing agent then hands over is explained under switching commercial agent or showroom. If you start something new with another label or creative, set out in the collaboration agreement what each of you may keep using afterwards.

If you hire a designer or salesperson from a competitor, ask them explicitly not to bring files, patterns or customer lists from their previous employer. If you use such information while you knew or ought to have known that it reached you unlawfully, you act unlawfully yourself (Article 2(3)).

Taking action when your design information or customer data has leaked

When information leaks, time matters. In interim injunction proceedings the court can prohibit the use or disclosure of your trade secret, as well as the making and selling of products made with your information (Article 5(1)). You can also have those products seized (Article 5(2)).

In proceedings on the merits the court can also order the products to be recalled or destroyed and files containing your secret to be destroyed or handed over to you (Article 6). If the other party knew or ought to have known that the use was unlawful, you can also claim damages, where appropriate as a lump sum (Article 8).

If you go to court, you have to explain the secret to the judge. On request, the court can designate that information as confidential. The parties, their lawyers, witnesses and experts may then not use or disclose it outside the proceedings, not even after the case has ended (Article 1019ib of the Dutch Code of Civil Procedure, in Dutch).

Advice on confidentiality in your brand or studio

We go through with you which information in your studio can be a trade secret and whether your steps fit it. For your factories, workshops and freelancers we draft the confidentiality clauses. We also arrange what happens when someone leaves. If information has already gone, we work out what you can claim and from whom.

Do you want better protection for your trade secrets, or is someone else using your information? Get in touch or call 020 675 88 21.