What will be the sanctions of the disclosure of a business secret?
By June 2018, French law will include legislation protecting business secrecy, based on the 2016 European Directive. But how can you protect a secret?
PROTECTING A SECRET
Information is a particularly vulnerable asset since its knowledge by a third party is irreversible. Once disclosed, the previously confidential information loses all its value and it is very difficult to assess the amount of damage suffered by its holder.
Therefore, rather than repairing the disclosure, it is more a question of preventing it. To effectively protect business secrets, the drafters of the Directive have therefore designed this text as a preventive weapon intended to deter anyone from disclosing business secrets.
The Directive, for jurisdictional reasons, has only provided for an arsenal of measures at the civil level. Thus, the courts may order the discloser to compensate for the damage suffered by the holder of the secret, but this compensation is not punitive in nature. In other words, the assessment of damages must include unfair gains made by the discloser as well as the loss of income of the holder of the secret, but the amount must never go beyond this and become a punishment.
The majority of French lawmakers would have liked the legislator to seize the opportunity given by the Directive to introduce a criminal aspect to deter the disclosure of a protected secret. In fact, this path was not chosen; the transposition of June 14, 2018 remains fundamentally within the scope of civil law, providing only for a right to compensation.
ENSURING THE CONFIDENTIALITY OF PROCEDURES
It is obvious that the judicial procedures initiated on a business secret must be carefully handled; publicizing the debates would immediately end any form of secrecy.
In addition to restricting access to hearings and exhibits, the obligations of the Directive regarding procedural matters include, for example, the obligation of confidentiality. The judge may, at the request of a party, classify certain information as confidential. Parties, lawyers, court staff, experts and witnesses will then be bound by the strictest confidentiality regarding this information, until the judge removes its classification as a business secret.
As another example, all statements relating to business secrets must be removed from any judgement that is made public.
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