James Pressley, associate solicitor at Merseyside law firm Kirwans, has issued the warning ahead of June 9, the date by which the EU Trade Secrets Directive becomes part of UK law

Businesses are being urged to review their processes around dealing with sensitive business information – or risk losing the right to have it treated as confidential by the courts.

James Pressley, associate solicitor at Merseyside law firm Kirwans, has issued the warning ahead of June 9, the date by which the EU Trade Secrets Directive – which was introduced in 2016 to provide a more cohesive approach to trade secrets across EU member states – must be implemented into UK law.

From that date on, a failure by businesses to take what the directive terms ‘reasonable steps’ to protect their trade secrets could result in a court refusing to punish those who reveal commercially sensitive information to others.

Mr Pressley said: “The introduction of the EU Trade Secrets Directive means it is more important than ever for businesses to review the way they protect commercially sensitive information.”

According to the UK common law definition of a trade secret: ‘Confidential information is protected when a person acquires information he knows, or ought to know, is fairly and reasonably to be regarded as confidential’.

However, the EU Directive’s definition of a trade secret is that it is ‘secret in the sense that it is not generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question’.

There are two other ways in which the directive defines a trade secret, and they are if [the secret] ‘has commercial value because it is secret’ and if it ‘has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret’.

“The upshot of this,” said Mr Pressley, “is that businesses have to ensure they have taken ‘reasonable steps’ to protect their trade secrets, which can include anything from a product design to their own business plans.

“As this comes hot on the heels of the introduction of GDPR, most people are now familiar with the need to carefully store and handle data, but there are additional steps that all organisations should take to protect that information to prevent it from being wrongfully used.”