Welcome back to our TMT Bites! This first issue of 2022 is dedicated to the trade secrets theme that should be of paramount concern to TMT players. The issue features legal developments and cases from around the world like Canada, the U.S., Latin America, China and Europe. Enjoy and stay tuned for more updates!

If you have any questions, ask our team or send an e-mail to tmtbites.italy@dentons.com.

Focus on

Europe

Trade secrets protection in Italy

Trade secrets can be protected in Italy based on different sets of statutory provisions. Such a structure places the Italian legal system at the forefront of know-how protection in Europe.

In essence, under Italian civil law, business information can be protected as trade secrets stricto sensu under Articles 98 and 99 of the Industrial Property Code (IP Code), as amended to implement Directive 943/2016 (Trade Secrets Directive) or, more broadly, as confidential information against the misappropriation or misuse by competitors which amount to unfair competition under Article 2598, no. 3, of the Civil Code.

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Recent developments in German case law on the protection of trade secrets

When the Act on the Protection of Trade Secrets came into force in April 2019, it marked a break with past convention for Germany. Previously, secrets were usually also vaguely referred to as “know-how,” the legal protection of which was basically taken for granted. After April 2019, in the event of a dispute, the person who felt his “secret” had been violated suddenly had to show and prove that this information was “subject to reasonable steps under the circumstances to keep it secret.”

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The latest German power couple: Trade secrets principles and patent litigation

It was an ambiguous moment for a US technology giant in 2018: It had been ordered to stop selling certain products in Germany, as the court held it infringed on a competitor’s patent on a chip. But it managed to prevent the exposure of trade secrets of its supplier by refusing to submit to the court detailed circuit diagrams as possible counterevidence of non-infringement.

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Transposing the Whistleblower Protection Directive across the EU: Let there be chaos! 

On January 27, 2022, 24 member states were formally notified by the EU Commission for failing to adopt the Directive (EU) 2019/1937—the EU Whistleblower Protection Directive (Directive). Then, on February 9, 2022, Portugal and Sweden also received formal notice letters because of the delayed entry into force of the provisions incorporating the Directive into national law. 

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Canada

Trade Secret Protection and Remedies in Canada

Canada has always been a nation of innovators. From the invention of insulin, basketball and the telephone, to the creation of the space shuttle’s robotic arm and global leadership in AI, Canadian technologies have had a global impact. Trade secrets have never been more important to companies in Canada where commercial advantage and business opportunities can stand or fall on being the first mover in a competitive market. The innovation ecosystem across Canada is thriving with powerhouse federal and provincial programs that support entrepreneurs with incubators and accelerators embedded within major universities and technology hubs. Innovating companies need a robust system that prevents misuse of a company’s valuable trade secrets and protects their investment in innovation.

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United States

SECRETS Act of 2021: More power—but also more responsibilities, for the US International Trade Commission

The US International Trade Commission (ITC) might soon be assigned another task under its mandate. Last year, the bill, “Stopping and Excluding Chinese Rip-offs and Exports with United States Trade Secrets Act of 2021” (The “SECRETS Act of 2021”) was introduced in the US Congress. According to the proposed federal statute, the ITC would have the power to “direct the exclusion from the United States of […] imports of articles that contain, were produced using, benefit from, or use any trade secret acquired through improper means or misappropriation by a foreign agent or foreign instrumentality.”

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Time flies: Reflecting on the US DTSA, six years later

The human brain develops the fastest during the first six years of one’s life—can the same be said of legislation? President Barack Obama signed the US Defend Trade Secrets Act (“DTSA”) on May 11, 2016; thus, it seems the time to ask, has the DTSA developed fast enough?

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China

Record-high damages: Behind China’s recent cases regarding trade secrets protection

In the course of the last two years, the Chinese Supreme People’s Court has awarded damages in the total amount of more than RMB 532 million (US$28 million) in trade secret disputes. One of the decisions, awarding RMB 159 million to the trade secret owner, was even ranked among the top 10 Chinese Supreme People’s Court Cases for 2021. As such numbers appear to be atypically high, the motives behind the court’s rulings need to be critically evaluated.

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Latin America

Regulation of trade secrets in Central America: an overview

In Central America, trade secrets are generally regulated under industrial property laws, within the scope of repression of unfair competition. Guatemala, El Salvador, Honduras, Nicaragua and Panama regulate trade secrets in their laws on industrial property, while Costa Rica has a specific Law to deal with this—the Law on Undisclosed Information.

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Other articles of this edition

Wisk v. Archer raises the bar on circumstantial evidence of misappropriation 

In one of the latest high-profile trade secret misappropriation cases, the US District Court for the Northern District of California ironically cleared the air between two competitors on the market for air taxis (Wisk Aero LLC v. Archer Aviation Inc., 3:21-cv-02450-WHO (N.D. Cal. Aug. 24, 2021)).

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Zuckerberg vs. Haugen: Trade secrets protection vs. raising awareness?

In October 2021, data scientist and former product manager of a well-known social media platform dropped a bombshell when she leaked internal documents to the Wall Street Journal, the US Securities and Exchange Commission (SEC) and the US Congress. Later, she testified before the US Senate. The platform was subsequently criticized for making profits instead of focusing on the safety of its users. Who will pay the (legal) price for that leakage of documents and other information?

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