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Trade secrets directive: protecting companies from theft - and whistleblowers?

Posted by Nick Prag at 14 April 2016, 18:30 CET |

The new 'trade secrets' directive, passed by the European Parliament on Thursday, ensures protection for the work of journalists and whistle-blowers, says rapporteur Constance le Grip MEP. Not all are convinced.

With almost one in every five companies a victim of theft of trade secrets every year, the aim of the directive is to help firms win legal redress against theft or misuse of their trade secrets.

At the heart of the issue, says the Trade Secrets & Innovation Coalition, are differences in EU Member State legislation which mean that levels of protection of trade secrets vary considerably from one European country to another. The current patchwork, they say, stifles European innovation, competitiveness and therefore employment. It encourages unfair competition as manufacturers misappropriating trade secrets do not bear the financial burden of innovation.

Surveys highlight that businesses refrain from developing partnerships across borders or funding start-ups in markets with little or no protection for trade secrets.

The coalition has therefore welcomed the directive, which it says will make it easier for national courts to deal with the misappropriation of confidential business information, to remove the infringing products from the market and make it easier for victims to receive damages for illegal actions.

However, media organisations have expressed concern that the directive could put journalists at risk therefore limiting their ability to investigate and report about businesses.

The European Magazine Media Association (EMMA) is particularly worried that safeguards for freedom of the media are largely going to depend on how national governments implement the directive.

This, they say, could lead to “significant legal uncertainty and chilling effects on journalists as they would be required to prove that the whistleblower’s intention was in line with the requirements of the Directive before even being able to use disclosed public interest information.”

What is certain is that, at a time when the “Panama Papers” revelations have reaffirmed the essential role that journalists, whistleblowers, and media play in informing citizens about issues of public interest, investigative journalism must be guaranteed.

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Nick Prag

Nick Prag

Nick Prag is founder and managing editor of Prior to EUbusiness, he was senior editor at Europe Online SA in Luxembourg, where he played a major part in the launch of Europe Online International.