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25th April 2016

European Parliament adopts Trade Secrets Directive


25th April 2016

European Parliament adopts Trade Secrets Directive

On 14 April 2016, the European Parliament (EP) adopted a draft Directive of the EP and of the Council on the protection of trade secrets against their unlawful acquisition, use and disclosure.

The European Commission adopted its proposal for this Directive on 28 November 2013. The proposal introduces an EU-wide definition of “trade secret”, meaning information which is secret, has commercial value because it is secret, and has been subject to reasonable steps to keep it secret. It lays down rules on the unlawful acquisition, disclosure and use of trade secrets. It sets out the measures, procedures and remedies that should be made available for civil law redress, including interim injunctions and precautionary seizure of infringing goods. Rules on the preservation of trade secrets during litigation are also included. Member states may provide more far-reaching protection, in compliance with provisions of the proposed Directive and the Treaty.

Next steps: The proposal is being adopted under the ordinary legislative procedure, meaning that the EP and the Council are co-legislators and need to adopt the same final text. Now that the EP has adopted its position at first reading, the Council is expected to formally adopt the Directive at first reading at an upcoming Council meeting.

IP Enterprise Court holds sole company director jointly liable for trade mark infringement and passing off.
The IP Enterprise Court has given summary judgment for the claimant in a claim for trade mark infringement and passing off, finding a company director jointly liable with his company.

The claimant was the owner of two EU trade mark registrations of a GRENADE word mark and logo mark for sports energy drinks, and sought summary judgment for passing off against a company that was supplying energy drinks using the name “Grenade”. The corporate defendant had already admitted trade mark infringement. In relation to the passing off claim, the defendants admitted that the acts complained of constituted misrepresentation but argued that the claimant had suffered no damage. They also argued that the individual defendant, who was the sole director and shareholder of the corporate defendant, should not be held jointly liable for the acts of his company.

Having noted some evidence of actual confusion that the claimant had adduced, the judge held that it was inevitable that there would be damage to the claimant’s goodwill. Even if it did not lose sales to the defendant, there would be some loss of control of the claimant’s goodwill, and that in itself was bound to cause damage. He therefore held that the case for passing off was made out.

In relation to the joint liability of the individual defendant, the judge observed that the defendant’s status as the sole director and shareholder raised an evidential presumption that the corporate defendant’s acts were committed at his instigation. He had not identified anyone else who could have been responsible for the acts complained of. The judge therefore took the view that he actively co-operated with his company to commit the acts of passing off and infringement and intended that his co-operation should bring about those acts, and was jointly liable for them.

This case should open the eyes of sole director/shareholders with regard to the potential personal liability of decisions made on behalf of the company.

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