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
