Data Assets – Protecting and Driving Value in a Digital Age

Faced with the exponential rise of data as an asset class in its own right, organisations are now taking a fresh look at the data that are available or accessible to them and the ways in which the value of those data can be safeguarded, unlocked and maximised. Data have become a strategic and valuable asset for many organisations but protecting and exploiting that asset is not always simple.

Our feature article, published in May’s edition of PLC Magazine and linked in this post, considers data as an asset, how intellectual property rights can be employed to protect data, how data can be used effectively and how to minimise associated legal risks.

The article explores key legal considerations for organisations looking to develop or refine a data commercialisation strategy, including in respect of:

  • the concept of so-called data “ownership”;
  • intellectual property rights;
  • contractual rights;
  • information governance;
  • competition law; and
  • corporate transactions.

For the full article please click below:

 

This article was first published in PLC Magazine, May 2019

Edward Du Boulay
Edward Du Boulay
Senior Associate, Digital TMT & Data, London
+44 20 7466 2384
Miriam Everett
Miriam Everett
Partner, Head of Data Protection & Privacy, London
+44 20 7466 2378
Kyriakos Fountoukakos
Kyriakos Fountoukakos
Partner, Competition and Trade, Brussels
+32 2 518 1840
Andrew Moir
Andrew Moir
Partner, Head of Cybersecurity, London
+44 20 7466 2773
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, Intellectual Property, London
+44 20 7466 2217
Joel Smith
Joel Smith
Partner, Head of Intellectual Property, London
+44 20 7466 2331
Manish Soni
Manish Soni
Senior Associate, London
+44 20 7466 2016

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: NEW EU RULES IN FORCE IN ITALY

Italian Legislative Decree 63 – 11 May 2018, implementing Directive (EU) 2016/943 on trade secrets, entered into force on 22 June 2018.

The Italian legal system was already at the forefront of trade secret protection, affording twenty years’ protection to both commercial and manufacturing and industrial-technical trade secrets, in full compliance with the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). This meant that the Italian legislator did not need to make major changes to the existing legislative framework. There are however some interesting changes to report.

New Definition of “Trade Secrets” 

The Italian Industrial Property Code (IPC) already provided for the protection of business information and technical-industrial experience as long as:

a) they were secret, meaning they were not generally known or not easily accessible to experts or sector operators;
b) they had commercial value because they were secret;
c) they had been subject to reasonable steps to keep them secret.

Although the Directive has not impacted scope of protection, such know-how is however now captured by the term “trade secrets”.

Continue reading

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.

Continue reading

CONSULTATION ON THE DRAFT TRADE SECRETS (ENFORCEMENT, ETC) REGULATIONS 2018

The Trade Secrets (Enforcement, etc.) Regulations 2018 (the “Regulations”) are intended to be in force by 9 June 2018 to transpose Directive (EU) 2016/943 (the “Directive”) into UK law. The UK IPO is in the process of consulting on the proposed Regulations.

Summary:

  • The UK already has well-developed legal protection for trade secrets (either in common law, statute or by means of court rules), therefore the Directive does not require substantial changes to be made to UK law.
  • Changes mainly concern limitation periods, procedural issues for the courts when hearing cases on breach of confidence in relation to trade secrets and certain remedies.
  • Although the EU has largely adopted UK law concepts the changes will be more radical in some other EU jurisdictions. The aim of the Directive is to create a level playing field for enforcement by harmonising this area of law.
  • Certain provisions of the language proposed for the Regulations differ from that used in the Directive.  In addition, it is proposed that some parts of the Directive will not be transposed and it is not clear why this is the case.  If this approach is adopted, it may lead to a lack of clarity in the UK law on trade secrets.

Business Impact:

  • Greater protection for a business trade secrets and a common approach to enforcement is to be welcomed across the EU.  Trade secrets are increasingly important in protecting valuable information and technology, especially where the other forms of IP protection like patents may not be available or appropriate.

Read more on the proposed regulations on trade secrets.

 

Authors

Joel Smith
Joel Smith
Head of IP - UK
+44 20 7466 2331
Clare Blendis
Clare Blendis
Senior Associate, London
+44 20 7466 2165

 

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

 

Brexit: Intellectual Property

Whatever future relationship the UK has with the rest of the EU, the effect of the Great Repeal Bill, once enacted, will mean that any existing intellectual property law having effect in the UK will continue to apply as it did post-Brexit, although it will be for the UK Government to adapt or amend it subsequently. That means that intellectual property law will continue to contain all of the concepts implemented from EU Directives or applicable from EU Regulations. However, EU-wide rights defined as applying “in the EU” will no longer apply in the UK and the Government will need to  consider providing replacement rights, provision for which would need to be in place prior to Brexit.

Continue reading

Brexit – what IP issues to consider now

We set out our thoughts and predictions upon how protection and enforcement of IP in the UK may be impacted once Brexit arrives. We have also suggested some immediate action points for consideration in the weeks or months to come, prior to Brexit, to ensure that your business is best protected prior to any changes.

Continue reading

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. 

Continue reading