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New Act on Trade Secrets and Know-How in Hungary

New Act on Trade Secrets and Know-How in Hungary

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The Directive 2016/943 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (“Directive”) was adopted by the European Parliament and the Council on 8 June 2016 and entered into force on 5 July 2016.

The reason behind the adaptation of the Directive was that there is a great divergence between the regulations of Member States on trade secrets and know-how, thus, the protection of trade secrets is fragmented throughout the EU, hampering innovation and hindering the effective functioning of the internal market. The aim of the Directive is to harmonize the respective national regulations on trade secrets, however, the Member States are free to grant higher level of protection. The Directive includes detailed definition for trade secrets and prohibits the unlawful acquisition, use and disclosure thereof.

The regulations of the Directive are being implemented into the Hungarian law by adopting a new act on trade secrets and know-how. Currently, the trade secret and know-how are regulated in the Hungarian Civil Code as rights relating to personality. The new act will depart from this concept and will ensure to the trade secret and know-how a protection similar to intellectual property rights. The applicable sanctioning regime in case of infringement will also be similar to IP rights. This conceptual change is reflected in the method of transposition of the Directive, since a separate new act will be introduced to regulate trade secrets and know-how, instead of amending the provisions of Civil Code and the Code of Civil Procedure. The bill also includes provisions to preserve the confidentiality of trade secrets in the course of court proceedings. The bill is currently under discussion and will enter into force next summer (the deadline for the mandatory implementation period expires on 9 June 2018).

By Levente Csengery, Partner, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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