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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

DLA Piper is a global law firm with lawyers located in more than 40 countries throughout the Americas, Europe, the Middle East, Africa, and Asia Pacific. This positions us to help clients with their legal needs around the world.

With more than 60 lawyers, including 14 partners, and a staff of over 140, DLA Piper Hungary is one of the largest international law firms operating in Hungary. What makes us stand out is that we offer not only legal services but also tax and business advisory support in a fully integrated manner. We maximize synergies between legal, tax, and business advisory services to offer a unique service for our clients, particularly in regulated industries such as energy, infrastructure, life sciences, banking, and telecommunications.

We are a true full-service firm, providing our private and public sector clients with advice on all aspects of their business. This includes transaction-related advice, people and employment, commercial dealings, litigation, information technology, media and communications, intellectual property, insurance, tax, real estate, and restructuring plans.

DLA Piper Hungary has received numerous professional awards and is consistently ranked among the top law firms in Hungary by international rankings. We are ranked #1 by Mergermarket among the law firms active in Hungary based on the volume of M&A deals handled between 2005 and 2024.

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