France adopts a confidentiality regime for the trade secrets relied upon in (patent) litigation

As part of the French Law on the Protection of Trade Secrets dated 31 July 2018, French lawmakers have finally adopted a long-awaited array of confidentiality rules covering the trade secrets that are being relied upon in cases that come before civil and commercial courts. Such provision was a requirement of the EU Trade Secrets Directive of 8 June 2016. These confidentiality rules have already been applied in patent litigation in a decision of the Paris Court of Appeal of 9 October 2018.

Until now, parties to patent litigation in France might have been reluctant and even precluded from providing confidential data, such as (i) their own financial data in the interests of calculating damages, or (ii) confidential contractual documents, as confidentiality could not be adequately preserved once these were relied upon as evidence in open court. This vulnerability has historically had a deterrent effect on efficient patent litigation in France compared to what was possible in other jurisdictions.

The following provisions went into force on 1 August 2018, marking a great improvement and quickly proving their worth in French patent litigation.

Article L. 153-1 of the French Commercial Code now provides that “Where, in the course of civil or commercial proceedings aimed at obtaining a pre-trial order of investigative measures before any proceedings on the merits, or in the course of proceedings on the merits, and the exhibit has been deemed to infringe or alleged by a party to the proceedings or a third party to be capable of infringing a trade secret, the court may take any of the following steps sua sponte or at the request of a participating or third party if the trade secret cannot be otherwise protected, without prejudice to the rights of defence: 1° Have the court alone review the exhibit, and if deemed necessary, order an expert opinion and request an opinion from each of the parties via a person authorized to assist or represent the party so as to decide whether to apply the protective measures set out in this Article; 2° Decide to limit the disclosure or production of the exhibit to certain parts thereof, order disclosure or production of a summary of the exhibit only, or restrict all parties’ access to a single individual person and a person authorized to assist or represent that party; 3° Decide that hearings will be held and the decision issued in chambers; 4° Adapt the grounds of the decision and the mode of publication thereof to the need to protect the trade secret.

In addition, Article L. 153-2 of the French Commercial Code provides that “Any person with access to an exhibit (or content thereof) that the court has deemed to be covered or likely to be covered by trade secret is bound by a duty of confidentiality and prohibited from any use or disclosure of the information in the exhibit. For a legal entity, this obligation […] applies to its representatives by law or pursuant to the articles of association and to any persons acting for the entity in court. Persons with access to the exhibit or its content are not bound by this duty either in their interactions with one another or with the aforementioned representatives of the entity that is party to the proceedings. Persons authorized to assist or represent the parties are not bound by this duty of confidentiality vis-à-vis said parties, except as provided in Article L. 153-1(1°). The duty of confidentiality does not expire at the end of the proceedings. It does expire, however, if a court issues a non-appealable decision that trade secrecy does not apply or where the information in question has since ceased to qualify as a trade secret or has become easily available.

The ability to rely on confidential data could be a game changer in future patent litigation in France, and the Paris Court of Appeal has already enforced these provisions to allow confidential license agreements to be disclosed while ensuring their confidentiality. The decision, dated 9 October 2018, was issued in a SEP/FRAND case, but its solution could apply across an extremely broad range of patent litigation cases in France. The operative part of the decision reads as follows:

Rule that the communication of these non-redacted documents, along with their possible schedules, will first be made between attorney’s only, that the attorneys will then revert to us – by 7 December 2018 at the latest – with their written observations on the excerpts or elements of those documents likely, on their opinion, to infringe or not a trade secret, such that we can decide, if relevant, to order one or several measures provided in paragraphs 2°, 3°, or 4° of Article L. 153-1 of the French Commercial Code.

Our London and Milan offices have also commented on the implementation of the Trade Secrets Directive in their respective jurisdictions on the Herbert Smith Freehills Intellectual Property Notes blog: see here for the UK and here for Italy.

Contact

Frédéric Chevallier
Frédéric Chevallier
Partner
+33153571360

TRADE SECRETS – SHORT VIDEO ON THE IMPACT OF THE NEW UK REGULATIONS IN IP AND EMPLOYMENT CONTEXTS

Here’s a short video made for Practical Law, in which Herbert Smith Freehills IP and Employment Professional Support Consultants, Rachel Montagnon and Anna Henderson, discuss the impact of the UK’s recent Trade Secrets (Enforcement etc) Regulations 2018 and practical approaches to protecting confidential information and trade secrets.

Key issues discussed are:

  • The new, common definition of a trade secret
  • What constitutes lawful and unlawful acquisition, use and disclosure of a trade secret
  • Practical steps businesses can take to protect confidential information
  • Considerations in relation to whistleblowing
  • Guidance around reverse engineering
  • Bringing a claim under the regulations
  • Remedies and provision for damages.
These new UK trade secrets regulations have implemented the Trade Secrets Directive ((EU) 2016/943) and came into force on 9 June 2018.  Also on our IP Notes blog, see our Milan office’s post on the Italian implementation of this Directive and our previous posting on implementation of the Directive in the UK.

Trade Secrets – added protection in force

The Trade Secrets (Enforcement, etc.) Regulations 2018 (the “Regulations”) came into force on 9 June 2018 and transpose Directive (EU) 2016/943 (the “Directive”) into UK law.

Summary:

  • The aim of the Directive is to create a level playing field by harmonising this area of law across the EU.
  • The UK already has well-developed legal protection for trade secrets governed by common law breach of confidence and by contract law.
  • A trade secret holder may now apply for remedies under breach of confidence in addition to or as an alternative to remedies under the Regulations.
  • Changes mainly concern limitation periods, procedural issues for the courts when hearing cases in relation to trade secrets and certain remedies.

Business Impact:

Businesses should continue to take steps to ensure that trade secrets are kept confidential and with limited access. This should be reflected in company policies, procedures and contractual provisions.

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Innovation Disruption and Technology – the legal and commercial issues for your business

Drawing on our practitioners’ experience and understanding of the intellectual property and technology issues facing our clients in the fast changing world in which we all now do business, we made innovation and disruptive technology the key themes at our 2018 IP Update Conference.

Described by one attendee as “The perfect mixture of commercial and legal content”, the event was held in our London offices in February 2018. We were joined by over 140 clients from the Technology, Banking, Consumer, Energy, Manufacturing, Media, Pharmaceutical & Healthcare, and Telecommunications sectors.

Click here for a briefing summarising the legal and commercial issues raised by the Herbert Smith Freehills presenters and our keynote speaker Kevin Mathers, Country Director at Google UK.

Our keynote speaker, Kevin Mathers, set the scene by discussing the current technological landscape for innovation and how Google looks at the future. Taking examples of how artificial intelligence, augmented reality and virtual reality are already being used by Google and looking at the major trends which will dictate our digital future. Kevin’s presentation was a great success, with attendees describing it as “really insightful and inspirational”; “engaging and interesting” and “stimulating and thought-provoking”.

The conference continued with sessions on

  • tackling the impact of AI on your business,
  • on-line risk,
  • open innovation,
  • interoperability and product standards, and
  • targeted advertising and the GDPR.

There was also a panel session at the end of the conference to discuss the issues facing businesses in relation to disruptive technology with contributions from partners and of counsel across the IP and IT practice areas and from several of our European offices.

Clients were impressed by the range of issues presented by the speakers and the practical approaches offered.

 

Joel Smith
Joel Smith
Head of IP - UK
+44 20 7466 2331
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, London
+44 20 7466 2217

 

UK HIGH COURT RULES ON COPYRIGHT PROTECTION OF TV FORMATS FOR GAME SHOWS

Summary

The High Court of England and Wales decided on 19 October 2017 that a particular television format document did not qualify for copyright protection as a dramatic work as its contents were unclear and lacking in specifics. Copyright protection has been notoriously difficult to obtain in respect of TV formats and the case contains useful guidance on the way television formats should be recorded or expressed in order to stand a chance of being protected by copyright as dramatic works. The High Court also considered that the TV format document was too vague and insufficiently developed to be protected as confidential information (Banner Universal Motion Pictures Limited v Endemol Shine Group Limited & others).

Business Impact

  • The decision acts as a warning for TV format developers that generalised commonplace game concepts, even if they are supported by specific examples, will likely fall short of the requirements for copyright protection as dramatic works.
  • Television producers who acquire the rights to TV formats should ensure that TV format documentation is sufficiently detailed and is kept up-to-date as the resulting shows develop. It shows the importance of a format bible.
  • To qualify for copyright protection as a dramatic work, contents of TV formats should be clear, specific and contain elements forming a coherent recognisable framework capable of being reproduced into a distinctive show.
  • In order to increase chances of their formats being protected by copyright, developers/producers should think of including the following in their documentation:
    • where the action is to take place;
    • who the contestants should be and the selection process;
    • the length of the programme;
    • when the show should be aired;
    • the source of the prizes (if any); and
    • catchphrases, identified as such (it is not sufficient to simply list words or expressions).
  • One of the major difficulties in establishing the infringement of copyright in formats for game shows is showing that what has been copied is the expression of ideas, rather than pure ideas themselves.
  • While the High Court acknowledged the possibility for television formats (even if not fully developed) to be protected by the law of confidential information, information which is too vague, insufficiently developed and of a very general nature is unlikely to qualify for protection under the common law of confidential information.
  • Claimants who have been unsuccessful in proceedings in one country should beware of starting similar proceedings against identical defendants elsewhere, as they may be estopped from doing so and such proceedings may amount to an abuse of process.

Authors

Joel Smith
Joel Smith
Head of IP - UK
+44 20 7466 2331
Alexandra Morgan
Alexandra Morgan
Senior Associate, London
+44 20 7466 2808

New Unjustified Threats Regime in force from 1 October 2017

Threatening proceedings for intellectual property right infringement can sometimes backfire. In relation to patents, trade marks and designs, there is a right for any person aggrieved by the threat to bring an action against the threatener. The “aggrieved” person may not necessarily be the person directly threatened with proceedings, it could be anyone whose commercial interests are damaged by the threat – such as a manufacturer whose suppliers or distributors are threatened. Not only does the threats action expose the IP rights-holder to the risk of damages, it also turns the potential claimant into a defendant. This in turn creates a tension with the requirements of the Civil Procedure Rules to communicate a litigant’s case early before issuing proceedings, with rights holders more likely to sue first than to threaten first.

The new Intellectual Property (Unjustified Threats) Act 2017, which comes into force on 1 October, attempts to encourage more pre-action communication by detailing what an actionable threat is, whilst providing for “permitted communications” or communications for “permitted purposes” which cannot amount to an actionable threat. It harmonises the position across patent, trade mark and design rights (including providing for unitary patents and European patents under the proposed Unified Patent Court jurisdiction) and allows pursuit of information on primary infringers from secondary parties where reasonable efforts have been made to find the primary infringer already.

To watch a video on the new unjustified threats regime click here.

Summary and Business Impact

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3D Printing and IP – Herbert Smith Freehills publishes Practice Note on 3D printing published by Practical Law IP&IT

Our Practice Note on 3D printing published by Practical Law here: https://uk.practicallaw.thomsonreuters.com/Document/I3466c5d71a1711e798dc8b09b4f043e0/View/FullText.html?transitionType=SearchItem&contextData=(sc.Search)&firstPage=true&bhcp=1 provides an overview of the 3D printing industry and highlights the challenges for intellectual property (IP) rights-holders when seeking to enforce their rights if they are infringed by 3D printing processes and resulting products. The note also considers options for rights-holders faced with unauthorised online sharing of computer-aided design (CAD) files. Finally, there is a short overview of product liability issues.
As 3D printing technology becomes more advanced, the popularity of home production as an alternative to home delivery is likely to rise, making it important for both businesses and consumers to understand the legal implications of the technology. It is still too early to say whether sectoral legislation for 3D-printed products will be needed but it is clear that businesses will need to anticipate developments and act proactively, rather than waiting for the law to catch up to a fast-moving area.

Authors

Andrew Moir
Andrew Moir
Partner
+44 20 7466 2773
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, London
+44 20 7466 2217
Adam Ford
Adam Ford
Associate
+44 20 7466 2065

 

 

 

 

 

 

 

Trade Secrets in a post-Brexit world

In their article for PLC Magazine (October 2016), Joel Smith and Jessica Welborn discuss the continued importance of the consistent and effective protection of trade secrets for businesses operating across Europe post-Brexit and the impact the new Trade Secrets Directive, even in the post-Brexit era. 

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The Trade Secrets Directive – consistency of approach required, with or without Brexit

In her Editorial for the Journal of Intellectual Property Law and Practice, Rachel Montagnon (our IP professional support consultant) discusses the changes introduced by the  Trade Secrets Directive (Directive (EU) 2016/943) from a UK perspective, evaluating the potential effects of Brexit on its implementation and arguing in favour of a consistent approach to its interpretation and application, to provide pan-European businesses with a stable and solid framework for the protection of trade secrets.

Author

Rachel Montagnon
Rachel Montagnon
Professional Support, Consultant, London
+44 20 7466 2217