JURI Committee adopts disastrous Trade Secrets provisions

By EDRi · July 1, 2015

The proposed Trade Secrets Directive, previously reported in EDRi-gram, was adopted on 16 June by the European Parliament Committee on Legal Affairs (JURI). To put it briefly, this proposal would create a new pseudo-intellectual property right for businesses to protect information that is not covered by traditional intellectual property rights. Commercially sensitive information is now typically protected through non-disclosure agreements between business partners. Such agreements that do not extend to third parties to which information may have been leaked. This directive would change that by providing remedies against such third parties.

The adopted Draft Resolution pays at best lip service to the serious concerns raised about the impact on freedom of expression, transparency and the free flow of information necessary in a democratic society. By classifying goods whose conception is based on unlawfully acquired trade secrets, the JURI Committee has created a de facto pseudo-patent without much in the way of mitigating measures of the patent system. Moreover, the JURI Committee has accepted as a principle that access to trade secrets is by definition unlawful. This is harmful because even the fact that fundamental rights can preclude the application of the Directive’s remedies against the use of trade secrets does not preclude its chilling effects. Chilling effects will have a negative impact on whistleblowers, journalists, IT-security researchers, free software developers and competition in general. This principle taints any leaked or reverse engineered information used by anyone other than the original trade secrets holder. Anything that the original trade secrets holder considers to be contrary to their interest (legitimate or not, the text does not differentiate on this), becomes actionable under this proposal. Faced with the expense and difficulty of proving that information leaked or reverse engineered serves an overriding public interest, many actors in the fields affected will just stay away from any information that might turn the ire of (large) businesses on them. Especially in the field of IT-security, this has the makings of a great tool to suppress the disclosure of weaknesses in the products of large vendors.

The Committiee’s adoption of this Draft Resolution is in stark contrast to the new calls of the Parliamentary Assembly of the Council of Europe on more whistleblower protections. Thus, while the EP has made untouchable so-called “trade secrets”, regardless if those secrets are real efforts made by a company after investing, or if it is a cover up for human rights violations, the Council of Europe has taken a step forward in its Resolution by calling for new legally binding instruments for whistleblower protection. The step forward has been of such magnitude that Edward Snowden, who analysed the text and spoke at the PACE meeting, saw it as a “incredibly strong text”. At the time of writing, no vote in the Plenary of the European Parliament has been scheduled on this dossier yet.

EU trade secrets Directive: threat to free speech, health, environment and worker mobility (23.032015)

Improving the protection of whistle-blowers

(Contribution by Walter van Holst, EDRi member Vrijschrift, Netherlands)