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How to protect business secrets?

Published on: 02/16/2023
By: Erwan Coatnan de Kerdu

Know-how and sensitive information of companies benefit from specific protection since the entry into force on June 8, 2016 of Directive (EU) 2016/943*. However, business secrecy still has some limitations and must itself be protected.

Want to know more about business secrecy and its protection? Follow us in the following lines.

A few words on business secrecy

Business secrecy: definition

Business secrecy protects the confidential information of a company (commercial strategies, plans of the various products, manufacturing methods, relations with customers and suppliers, secret recipes…). If this data were to be revealed to third parties, it could cause harm.

It is important to note that business secrecy cannot be invoked to protect information that is illegal or contrary to the public interest.

What information benefits from business confidentiality?

In order to benefit from business confidentiality, information must meet three criteria:

  • Have real, actual or potential commercial value.
  • It must not be common or accessible to people in the same industry.
  • Benefit from good protection measures.

Exceptional cases

Of course, in certain exceptional cases, business secrecy cannot be applied. Thus, the administrative authorities and the courts can access information for different reasons:

  • A sanction
  • A control
  • An investigation

Similarly, business secrecy cannot go against the freedom of information (and freedom of expression) and does not cover in any case certain condemnable behaviors and illegal activities.

Business secrecy and protection

Protection of business secrets

When there is an infringement of business secrecy (and therefore of the confidentiality of information), legal proceedings may be initiated. This implies that the use of the products resulting from this violation is prohibited, as well as their production. In the same way, it allows that all documents, objects… related to the secret are destroyed.

Violation of the business secret

A violation of business secrecy occurs when confidential information is disclosed, obtained or used in an illicit manner. More concretely, when confidential information is obtained through a violation (misappropriation of documents…), its disclosure and use will also be considered as illegal.

Beware, if you unknowingly use information covered by the business secret, you are still considered as the holder of a confidential data and are liable to sanctions.

Violation of business secrecy: what sanctions?

The violation of business secrecy exposes to heavy sanctions. Consequently, the person who illegally holds confidential information will have to pay damages to the victim at some point, and these sums can be substantial depending on the case. Indeed, damages take into account different criteria: the loss, the loss of earnings, the profits made by the author of the violation and the moral prejudice.

Business secrecy: a protected right!

Business secrecy is a legal concept that allows to better protect the confidential information of a company, however, as we have seen in this article, to be taken into account, this information must meet specific criteria.

Keep in mind that a violation of the business secret is possible, but that legal procedures exist to protect it. The author of the violation will then be obliged to pay you damages in the amount of the prejudice suffered.

*EU Directive: DIRECTIVE (EU) 2016/943 of the European Parliament and of the Council on the protection of undisclosed know-how and business information (trade secrets) against unlawful obtaining, use and disclosure. Entered into force on June 8, 2016.


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