11 June 2018

The Trade Secrets (Enforcement etc.) Regulations 2018, in force as of 9th June 2018, codify the law on trade secrets for the first time in the UK.

While trade secrets have been protected for some time in Scotland and the rest of the UK by the common law, this is the first time that domestic legislation has been introduced to regulate the protection and enforcement of trade secrets.

Over the years, many businesses have devoted a great deal of time, money and effort to protecting their trade secrets on the basis that they constitute a very valuable form of intellectual property. Historically, many businesses have chosen to protect these business secrets by contractual measures rather than pursuing routes such as patents, preferring the long lasting and confidential protection that trade secrets can offer rather than having to publish their invention and risk use by the world at large on expiry of the registration period.

Lynn Richmond, Partner

While the Regulations set out new rules in respect of trade secret litigation, they may, in fact, go some way to reducing the need for litigation by providing clarity on the definition of a trade secret, which has, until now, only been developed with litigation but has never before been enshrined in statute.

The Regulations provide that a trade secret is:-

secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among, or readily accessible to, persons with the circles that normally deal with the kind of information in question; has commercial value because it is secret; and has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information to keep it secret.

A common problem for businesses in enforcing trade secrets is the very public nature of litigation and the risk of trade secrets becoming public knowledge as proceedings unfold and the risks inherent in sharing sensitive information with the “opposition” and witnesses.

Now litigants may have some comfort as the Regulations address that difficultly by giving the courts the power it identify documents as confidential and prevent their disclosure by any participant in courts proceedings.

Those involved in trade secret disputes may also be pleased to note that the Regulations specifically regulate the periods during which enforcement proceedings may be raised in court – an issue which often taxes lawyers and which is particularly helpful at time when the law of prescription in Scotland is undergoing such change.

As with all legislation there will no doubt be a bedding in process as the Regulations are interpreted and applied but their effect is likely to bolster the importance of trade secrets in Intellectual Property Law.

Contact: Lynn Richmond, Partner lyr@bto.co.uk T: 0131 222 2939