Trade secret laws and regulations in Belgium

Yes, the Act of 30 July 2018 relating to the protection of trade secrets transposes Directive (EU) 2016/943 into Belgian law. The Act amended the Code of Economic Law (“CEL”), and in particular Books I, XI, and XVII of that Code as well as the Judicial Code and the Act of 3 July 1978 on Employment Agreements. 

The Act relating to the protection of trade secrets came into force on 28 August 2018. 

• Article 1382 of the Civil Code – Civil liability claim 
  Article 1382 of the Civil Code provides that a person is liable to compensate the damage caused by him or her. In the past, several Belgian courts have held that the unauthorised disclosure or use of trade secrets of another party may constitute a fault (or tort) if another normally prudent person placed in the same circumstances would not have disclosed or used that trade secret.
• Code of Economic Law – Unfair competition 
  Book VI CEL regulates commercial practices and prohibits several acts of unfair competition. More precisely, Article VI.104 CEL prohibits in general “every act of unfair competition that is causing harm to the professional interests of other undertakings”. In the past, several Belgian courts have held that the unauthorised disclosure or use of trade secrets of a competitor usually constitutes an act of unfair competition. 
• Criminal Code 
  Article 309 of the Criminal Code prohibits disclosing secrets obtained in the factory. The scope of this provision is rather limited because only manufacturing secrets (technical information that contributes to the operations in the factory) are protected and the provision only applies to persons working or having worked in the factory. This provision of the Criminal Code does not apply to competitors who receive and use unlawfully obtained manufacturing secrets. Finally, the application of Article 309 of the Criminal Code contains a moral element, meaning that the perpetrator must have acted in bad faith. Therefore, Article 309 of the Criminal Code is not often applied in practice. 
• Labour law
  Article 17, 3° of the Act of 3 July 1978 on Employment Agreements provides that the employee has the obligation to refrain, both during and after the termination of the contract, from: 

1. unlawfully obtaining, using or disclosing a trade secret, within the meaning of Article I.17/1.1° of the Code of Economic Law and of Article XI.332/4 of that Code, that he may become aware of in the course of his professional activity, as well from disclosing the secret of any matter of a personal or confidential nature that he may have become aware of in the course of his professional activity; 
2. engaging or cooperating in any act of unfair competition.

• Contractual claim 
  Finally, it is always possible to agree upon the use or disclosure of a trade secret in a contract.

Trade secrets are defined in Art. I.17/1.1° CEL as information that meets all of the following conditions: 

1. it 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 within the circles that normally deal with the kind of information in question;
2. it has commercial value because it is secret; 
3. it has been subject to reasonable steps under the circumstances by the person lawfully in control of the information to keep it secret.

These conditions result from the definition of a trade secret in EU Directive (EU) 2016/943.

No. It is not required to apply for, or register, a trade secret before obtaining protection. However, as provided in the definition contained in Art. I.17/1.1° CEL (cf. above) reasonable steps must have been taken to keep the information secret.

A few examples of such steps are provided by the Ministry of the Economy on its website: 

• physical protection through the surveillance of the business premises, through locking the information in a safe or storing it in secured archives; 
• digital protection by securing the system using passwords, encryption, or another security system; 
• storage of trade secrets in a digital safe (e.g. the i-Depot offered by the Benelux Office Intellectual Property); 
• conclusion of agreements with employees and trade partners with non-disclosure and non-competition clauses.

Yes, the rights on confidential information may be sold or licensed by one undertaking to another. 

Under the Code of Economic Law, the acquisition of a trade secret without the consent of the trade secret holder shall be considered unlawful whenever carried out by:

1. unauthorised access to, appropriation of, or copying of any documents, objects, materials, substances or electronic files, lawfully under the control of the trade secret holder, containing the trade secret or from which the trade secret can be deduced;
2. any other conduct, which, under the circumstances, is considered contrary to honest commercial practices (art. XI.332/4 §1 CEL that implements Article 4 §2 of the Directive).

Yes, co-ownership of trade secrets is permitted under Belgian law.

Article XI.332/4 §2 CEL (implementing Article 4 §3 of the Directive) states the actions that constitute an infringement of trade secrets:

1. The acquisition of a trade secret without the consent of the trade-secret holder shall be considered unlawful, whenever carried out by: 
   1. unauthorised access to, appropriation of, or copying of any documents, objects, materials, substances or electronic files, lawfully under the control of the trade secret holder, containing the trade secret or from which the trade secret can be deduced;
   2. any other conduct, which, under the circumstances, is considered contrary to honest commercial practices.
2. The use or disclosure of a trade secret shall be considered unlawful whenever carried out, without the consent of the trade secret holder, by a person who is found to meet any of the following conditions:
   1. having acquired the trade secret unlawfully;
   2. being in breach of a confidentiality agreement or any other duty not to disclose the trade secret;
   3. being in breach of a contractual or any other duty to limit the use of the trade secret.
3. The acquisition, use or disclosure of a trade secret shall also be considered unlawful whenever a person, at the time of the acquisition, use or disclosure, knew or ought, under the circumstances, to have known that the trade secret had been obtained directly or indirectly from another person who was using or disclosing the trade secret unlawfully within the meaning of paragraph 2.
4. The production, offering or placing on the market of infringing goods, or the importation, export or storage of infringing goods for those purposes, shall also be considered an unlawful use of a trade secret where the person carrying out such activities knew, or ought, under the circumstances, to have known that the trade secret was used unlawfully within the meaning of paragraph 2.

Yes, it is possible to obtain ex parte measures in case of an absolute emergency or necessity, including the appointment an expert who will examine and preserve evidence about the alleged infringement of the trade secrets, or the attachment of the infringing goods, which significantly benefit from trade secrets unlawfully acquired, used or disclosed. (art. 584 of the Judicial Code).

The following injunctive relief measures may be imposed by the president of the court (Art. XVII.21/1 and XVII.21/2 CEL that implement Article 10 of the Directive):

1. the cessation of any unlawful obtaining, use or disclosure of a trade secret;
2. additional measures if they contribute to the cessation, such as: 
   1. the prohibition of the production, offering, placing on the market or use of infringing goods, or the importation, export or storage of infringing goods for those purposes; 
   2. the recall of infringing goods from the market; 
   3. depriving the infringing goods of their infringing quality;
   4. destruction of the infringing goods or, where appropriate, their withdrawal from the market, provided that the withdrawal does not undermine the protection of the trade secret in question. 
   5. the destruction of all or part of any document, object, material, substance or electronic file that contains or materialises the trade secret or, as the case may be, the handing over to the holder of the trade secret all or part of such documents, objects, materials, substances or electronic files. 

Pursuant to Article. XI.336/3 CEL (implementing Article 12 of the Directive), the final measures that the court can impose are the same as the interim measures listed above. 

Yes. Article 1369 quinquies of the Judicial Code (implementing Article 11 of the Directive) provides that the applicant shall institute proceedings leading to a decision on the merits before a competent court within a reasonable period of time. This period shall be determined by the judicial authority ordering the measures or, in the absence of such determination, within a period not exceeding 20 working days or 31 calendar days, whichever is longer, following the service of the interim court order.

Article XI.336/4 §3 CEL (implementing Article 13 §3 of the Directive) stipulates that at the request of the person liable to be subject to the measures provided for in Article XI.336/3 CEL, the court may order that financial compensation must be paid if the following conditions are met:

1. the person concerned at the time of use or disclosure neither knew nor ought, under the circumstances, to have known that the trade secret was obtained from another person who was using or disclosing the trade secret unlawfully; 
2. execution of the measures in question would cause that person disproportionate harm; and 
3. pecuniary compensation to the injured party appears reasonably satisfactory. 

Yes, it is possible to obtain ex parte measures in case of an absolute emergency or necessity, including the appointment an expert who will examine and preserve evidence about the alleged infringement of the trade secrets, or the attachment of the infringing goods, which significantly benefit from trade secrets unlawfully acquired, used or disclosed. (art. 584 of the Judicial Code).

The financial compensation available in place of an injunction and other measures of Article XI.336/4 CEL shall not exceed the amount of royalties or fees, which would have been due, had that person requested authorisation to use the trade secret in question, for the period of time for which use of the trade secret could have been prohibited.

The general rules regarding financial compensation to the trade secrets holder are the following (article XI.336/5 CEL, which implements Article 14(1) of the Directive): 

§1 The holder of the trade secret shall be entitled to compensation for any damage suffered by him as a result of the unlawful obtaining, use or disclosure of the trade secret. 
§ 2 Where the extent of the damage cannot be determined in any other way, the court may, in a reasonable and fair manner, set the damages as a lump sum. 
§ 3 At the request of the holder of the trade secret, the court may, by way of damages, order the delivery to the holder of the trade secret of the infringing goods and, in appropriate cases, of the materials and tools that were principally used to create or manufacture those goods and that are still in the possession of the infringer. If the value of such goods, materials and tools exceeds the actual damage, the court shall determine the compensation to be paid by the holder of the trade secret.

The financial compensation of Article XI.336/5 CEL shall be appropriate to the actual prejudice suffered (as specified by Art. 14 §1 of the Directive). When setting the damages, the competent judicial authorities shall take into account all appropriate factors, such as the negative economic consequences, including lost profits, which the injured party has suffered, any unfair profits made by the infringer and, in appropriate cases, elements other than economic factors, such as the moral prejudice caused to the trade secret holder by the unlawful acquisition, use or disclosure of the trade secret (as specified by Article 14 §2 of the Directive).

The limitation period for claims concerning trade secrets is five years (Art. XI.342/2 CEL). This limitation period begins when the holder of the trade secret becomes aware of: 

1. the conduct and the fact that such conduct constitutes an unlawful obtaining, use or disclosure of a trade secret; and 
2. of the identity of the offender. 

The claims shall in any case be barred after 20 years following the day on which the unlawful obtaining, use or disclosure of the trade secret occurred.

In case of the breach of a trade secret by an employee, the limitation period is one year after the termination of the employment agreement, or five years after the breach of the trade secret, without this period exceeding one year after the termination of the employment agreement (Art. 15 of the Act of 3 July 1978 on employment agreements). 

If the holder of a trade secret wants to start injunctive relief proceedings, he must do so within a period of one year following the date on which the breach of the trade secret ended (Art. XVII.5 CEL).

The limitation period is interrupted by a summons to appear before a court.

Pursuant to Article XI.336/2 CEL and Article 871bis of the Judicial Code:

The court may order that a trade secret or an alleged trade secret may not be disclosed or used by the parties, their lawyers or other representatives, magistrates and judicial personnel, witnesses, experts, and any other persons who have access to a trade secret in legal proceedings. The obligation of confidentiality continues after the end of the legal proceedings.

The judge may also, at the duly substantiated request of an interested party or ex officio, take the following special measures to protect the confidentiality of any trade secret or alleged trade secret used or mentioned during legal proceedings: 

1. create a “confidentiality club”, a restricted group of persons or categories of persons that will have access to all or part of the documents containing trade secrets or alleged trade secrets; 
2. restrict access to the hearing when trade secrets or alleged trade secrets may be disclosed, to a limited number of persons; 
3. make available to any person other than those belonging to the persons or categories of persons referred to in 1° and 2°, a non-confidential version of any judicial decision in which the passages containing trade secrets have been removed or redacted (cf. Article 9 of the Directive).

The number of persons expressly designated or belonging to the categories of persons expressly designated as referred to in the first paragraph, 1° and 2°, may not be greater than what is necessary to guarantee the parties to the legal proceedings their right to an effective remedy and access to an impartial tribunal, which must include at least one natural person for each party and each party's lawyer or other representatives of these parties to the legal proceedings.

The protection of trade secrets organised by Article 871bis of the Judicial Code is supplemented by the power for the judge to order the payment of a penalty (“astreinte”/“dwangsom”) pursuant to Article 1385bis of the Judicial Code.

Pursuant to article XI.332/2 CEL (implementing Article 5 of the Directive), the provisions on trade secrets do not affect:

1. the exercise of fundamental rights enshrined in international and supranational law and the Constitution, in particular the right to freedom of expression and information, including respect for the freedom and pluralism of the media;
2. the application of rules of European Union law and national law requiring holders of trade secrets to disclose, for reasons of public interest, information, including trade secrets, to the public or to administrative or judicial authorities for the performance of the duties of those authorities;
3. the application of rules of European Union law and national law requiring or allowing European Union institutions and bodies or national public authorities to disclose information submitted by businesses, which those institutions, bodies or authorities hold pursuant to, and in compliance with, the obligations and prerogatives set out in European Union or national law;
4. the autonomy of the social partners and their right to enter into collective agreements, in accordance with European Union law, national law, and national practices.

The defendant has the right to claim compensation in the event that the proceedings were brought in an abusive manner or in bad faith by the plaintiff. In this respect, the Belgian legislator considered that the Belgian legal arsenal was adequate (e.g. civil fine, compensation of attorneys’ fees) and did not provide for additional provisions (cf. Explanatory Memorandum, p. 11).

No.

To ensure the effectiveness of the protection of trade secrets, the employer must first identify the information to be considered as confidential and assess its degree of secrecy. The measures to put in place to protect trade secrets will depend on the degree of secrecy and the level of authorisation. Note the following:

• Organisational protection measures: draft a specific internal policy on the protection of trade secrets with “do’s and don’ts” within the company; appoint a person in charge of monitoring the implementation of the different measures and the compliance by staff members; mark and label the documents as confidential so employees are informed of the sensitive nature of the document; organise trainings on confidentiality for the persons who have access to confidential information; etc.
• Physical protection measures: enclose trade secrets in a safe and keep a copy in another safe place that can only be accessed by a limited number of persons; use video surveillance systems; etc.
• Digital protection measures: put in place IT measures to protect trade secrets (e.g. via restricted access to information, encrypted measures, two-factor authentication to access confidential information, etc.); store trade secrets in a digital safe such as the i-Depot offered by the Benelux Intellectual property Office (which also serves as evidence that the information existed on a specific date); etc.
• Legal protection measures: include non-competition and confidentiality clauses in employment contracts or work protocols. However, the obligation of confidentiality may also result from the general obligation to perform agreements in good faith. Confidentiality agreements shall be entered into with business partners who have access to trade secrets.

• Article 17, 3° of the Act of 3 July 1978 on Employment Agreements 
  Article 17, 3° of the Act of 3 July 1978 on Employment Agreements provides that the employee has the obligation to refrain, both during and after the termination of the contract, from: 

1. unlawfully obtaining, using or disclosing a trade secret, within the meaning of Article I.17/1.1° of the Code of Economic Law and of Article XI.332/4 of that Code, that he may become aware of in the course of his professional activity, as well from disclosing the secret of any matter of a personal or confidential nature that he may have become aware of in the course of his professional activity; 
2. engaging or cooperating in any act of unfair competition.

• Criminal Code 
  Article 309 of the Criminal Code prohibits disclosing secrets obtained in the factory. The scope of this provision is rather limited because only manufacturing secrets (i.e. technical information that contributes to the operations in the factory) are protected and the provision only applies to persons working or having worked in the factory. This provision of the Criminal Code does not apply to competitors who receive and use unlawfully obtained manufacturing secrets. Finally, the application of Article 309 of the Criminal Code includes a moral element, meaning that the perpetrator must have acted in bad faith. Therefore Article 309 of the Criminal Code is not often applied in practice. 

If an employee leaves the company, the employer can conduct an exit interview with the departing employee (i) to remind him or her of the confidentiality obligations applicable, and (ii) to request the hand-over of any confidential documents in his or her possession. At the end of the interview, the employer can make the employee sign a confirmation document that all the documents have been returned and that the employee acknowledges that confidentiality obligations still apply to him or her after the termination of the employment relationship. Such document signing can, of course, be integrated into the employee exit process of the company.

Moreover, to ensure that the employee has not transferred trade secrets from the professional devices that he or she is using, another recommendation would be to check those devices to know whether transfers of trade secrets have occurred. 

Finally, another recommendation would be to restrict departing employees' access to the company’s IT infrastructure (e.g. during the notice period).

Yes, the protection of trade secrets is not absolute.

Under article XI.332/5 CEL (implementing Article 5 of the Directive), a judge may reject a claim for the protection of trade secrets concerning the disclosure of misconduct, errors, or illegal activities, provided that the infringer acted for the protection of the general public interest (i.e. whistleblowers).

 Disclosure by employees to their representatives in the legitimate exercise of their functions in accordance with EU or national law may also be invoked as an exception to the measures, procedures and remedies for trade secrets protection, provided that such disclosure is necessary.

Yes, an employer can be held liable for its employees’ infringement of a third party’s trade secret.

Article XI.332/4 CEL provides that obtaining, using or disclosing a trade secret is unlawful if a person knew or, in view of the circumstances, should have known that the trade secret had been obtained directly or indirectly from another person who was unlawfully using or disclosing it. Through this provision, Belgian law targets “second degree offenders”. As a result, an employer who is aware of the unlawful origin of information or who, due to the circumstances, should have been aware of its unlawful origin can potentially be held responsible for its employee’s infringement of a trade secret.

The following shall be addressed with respect to trade secrets:

• Identification of the “Parties”, the “Disclosing Party” and the “Receiving Party”;
• A definition of “Confidential Information”;
• Obligations of confidentiality of the Receiving Party; 
• Compelled disclosure of Confidential Information;
• Ownership of Confidential Information;
• Return of Confidential Information;
• Notice of Breach;
• Remedies and Liquidated Damages.

Article 6 of the Act of 3 July 1978 on Employment Agreements provides for the nullity of contractual clauses restricting workers rights or aggravating their obligations. Therefore, a confidentiality clause is only valid if it does not impose obligations on employees that are heavier than those contained in article 17, 3°, a) of the Act of 3 July 1978. 

No.

Parties may include a penalty clause in their contracts as long as the penalty does not exceed a reasonable estimate of the damages caused by any envisaged breach of contract.