On 11 December 2018, the French Government published a Decree No. 2018-1126 that clarified the conditions for the implementation of the new general protection scheme with respect to trade secrets introduced by Law No. 2018-670 of 30 July 2018 pursuant to the European Trade Secrets Directive.
The trade secrets Law was promulgated on 30 July 2018 as per the EU Directive 2016/943 of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure. The Directive aimed to harmonize and enhance the levels of protection for various types of trade secrets across all Member States in order to fight against the fragmentation of the internal market in this area - which discourages companies from undertaking innovation-related cross-border economic activity, outsourcing or investment in other Member States involving trade secrets. In this respect, the Directive provides for rules at the European Union level to ensure that there is a sufficient and consistent level of civil redress in the internal market in the event of a breach of trade secrets, while leaving open the possibility for Member States of providing for more far-reaching protection.
By promulgating Law No. 2018-670 on Trade Secrets, France chose to make a faithful and minimal transposition of the EU Directive. It adopted a legal definition of trade secrets, new measures to ensure their protection before the civil courts and chose to set a prescriptive period of 5 years from the discovery of the unlawful breach and the identity of the alleged infringer – which corresponds to the standard prescriptive period to most commercial matters. By choosing not to criminalize any breach of or the use and disclosure of trade secrets, France has joined the group of Member States that have chosen not to use the discretionary leeway that the Directive permitted – Belgium and Germany for instance - but differs from Italy, for example, which has chosen to strengthen criminal sanctions.
In this context, the implementing Decree No. 2018-1126 of the Law on Trade Secrets, which came into force on 13 December 2018, confirmed this French position and strengthened the power of the civil courts by introducing a new section within the French Commercial Code - as well as other provisions of the French Intellectual Property Code. Three procedural issues are addressed and detailed in the Decree: (1) provisional and protective measures granted in summary proceedings, (2) provisional escrow mechanisms, and (3) the procedure for filing or producing documents.
First, with the introduction of Article R 152-1 in the French Commercial Code, the Decree clarifies the legal regime for provisional and protective measures. The latter provides that the courts may now, when seised for the purpose of preventing an imminent infringement or putting an end to an unlawful infringement of a trade secret, prescribe, on request or on summary proceedings, provisional or protective measures such as the prohibition of the perpetration or continuation of acts of use or disclosure of a trade secret, the prohibition of the production, offer, placement on the market or use of products suspected of resulting from a serious infringement of a trade secret.
In addition, in accordance with the new Article R 153-1 of the French Commercial Code introduced by the Decree, courts can now automatically order, during an investigative measure or when seized on the basis of Article 145 of the French Civil Procedure Code, the provisional escrow of documents so as to ensure the protection of business confidentiality. Courts can also decide on the partial or total removal of this measure.
Furthermore, the Decree defines the procedural rules that govern requests for disclosure and production of exhibits by introducing Articles R 153-1 to R 153-10 of the French Commercial Code. These various articles clarify the powers of the court in this respect: in particular, courts can restrict the circle of persons who may have access to the evidence, access to hearings or even order the disclosure of documents in a full or non-confidential version.
Finally, by clarifying the general regime for the protection of trade secrets, this new Decree promises entrepreneurial and innovative companies greater protection of their trade secrets by providing them with new, effective means of action. The application of these provisions will now depend on the courts’ interpretation, but it is worth noting that in order to benefit from protection against breaches of their trade secrets, companies must now take all necessary measures to try to protect them – as without such measures no protection can be awarded.