Protection of trade secrets in a data-driven, networked environment – Is the update already out-dated?

Abstract

Directive (EU) 2016/943 (Trade Secret Directive) was adopted to level the disparities in the protection of trade secrets throughout the European Union. The Directive solely grants protection when the information is secret, which requires measures to prevent access. In this regard, the Directive retains the basic structure of the protection of trade secrets. In the future industry, however, it will become inevitable to provide a broad access to data for third parties in order to exploit the full potential of digitalization. These developments are not taken into account as neither the applicability to data nor the demands of the Industry 4.0 are addressed in the Directive. This leads to the question if the update of trade secret protection is already out-dated or if it is possible to protect trade secrets even in highly networked environments as they will emerge in the future. The aim of this paper is therefore to assess whether and how protection of trade secrets can be realized in such environments. To answer this question, the paper will first examine the conflict mentioned above in detail (I.). Then, it will identify the shortcomings of the Trade Secret Directive when its requirements are applied to data-driven, networked environments (II.). However, with organizational, contractual and technical measures, these shortcomings can be resolved to a certain extent (III.). Especially new encryption technologies that are not yet wide-spread will be a fundamental asset to trade secret protection in the future (III. 3.).***