Trade secrets in Serbia

  1. General
    1. 1. Has the Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (“Trade Secrets Directive”) been implemented?
    2. 2. Are there any other applicable sources of law related to trade secrets?
    3. 3. How are trade secrets defined? 
    4. 4. Do specific measures or protections need to be put in place for information to benefit from protection as a trade secret?
  2. Dealings in and ownership of Trade Secrets
    1. 1. Are trade secrets transferable and/or licensable?
    2. 2. Are there specific consequences arising from transfer or licensing of trade secrets by a party other than the trade secrets owner?
    3. 3. Is co-ownership of trade secrets permitted?
  3. Enforcement of Trade Secrets
    1. 1. What actions constitute infringement of trade secrets?
    2. 2. Are there any measures allowing the trade secrets' owner to gather and/or preserve evidence of infringement of trade secrets?
    3. 3. What specific interim and final measures and remedies are available in the event of infringement of trade secrets?
    4. 4. Is there a specific period after obtaining interim measures by which the applicant must bring proceedings for a substantive decision on the merits of the claim?
    5. 5. Are there circumstances in which damages or other financial compensation may be available in place of an injunction and other measures?
    6. 6. Are any interim or final measures and remedies available through ex parte hearings?
    7. 7. How is financial compensation to the trade secrets holder calculated?
    8. 8. What is the limitation period for claims relating to misappropriation of trade secrets?
    9. 9. When does the limitation period begin to run?
    10. 10. Are there any circumstances that interrupt or suspend the limitation period?
    11. 11. Are mechanisms available to preserve confidentiality of trade secrets in the course of legal proceedings?
    12. 12. Are there any particular legitimate interests which may be invoked as an exception to the measures, procedures and remedies for trade secrets protection?
    13. 13. Are any measures available where proceedings concerning trade secrets are manifestly unfounded and / or found to have been initiated abusively or in bad faith?
    14. 14. Are separate legal proceedings required for such measures?
  4. Employee / employer liability
    1. 1. Are there any protections for “whistleblowers” or similar rights for employees in relation to infringement of trade secrets?
    2. 2. Can an employer be liable for their employee’s infringement of a third party’s trade secrets?

General

1. Has the Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (“Trade Secrets Directive”) been implemented?

No. The protection of trade secrets is regulated by the Law on Protection of Trade Secrets ("Official Gazette of the Republic of Serbia", No. 72/2011).

The draft of the new draft Law on Protection of Trade Secrets has been published, but is not in the procedure before the National Assembly of the Republic of Serbia. It aims to align the system of trade secret protection with the EU Directive 2016/943 and EC Directive 2004/48.

The protection of trade secrets is regulated by the Law on Protection of Trade Secrets ("Official Gazette of the Republic of Serbia", No. 72/2011).

Other laws, such as laws governing the conditions and procedure for marketing of medicines, medical devices, plant protection products in agriculture and forestry, biocidal products, etc. may also have provisions related to trade secrets.

The Law on Confidentiality of Information ("Official Gazette of the Republic of Serbia", No. 104/2009) regulates classified information of interest for national and public security, defence, internal and external affairs of the Republic of Serbia, protection of foreign classified information, etc.

3. How are trade secrets defined? 

A trade secret is defined as any information that has a commercial value because it is not generally known or accessible to third parties who could gain economic benefit by its use or communication, that is protected by its holder through appropriate measures in accordance with the law, business policy, contractual obligations or appropriate standards in order to preserve its secrecy, and the disclosure of which could cause damages to the holder of the trade secret.

Trade secrets also include:

  1. undisclosed test data or other data the creation of which requires appropriate effort and costs, which is submitted to the state authorities for obtaining a license for the marketing of medicines, medical devices or agricultural chemical products using new chemical compounds, as well as for obtaining acts by which the placing on the market of biocidal products is authorised;
  2. other information that has been declared a trade secret by a special law, other regulation or act of a legal person.

The information protected as a trade secret include: financial, economic, business, scientific, technical, technological, production data, studies, tests, research results, including formulas, drawings, plans, projects, prototypes, codes, models, compilations, programmes, methods, techniques, procedures, notices, or instructions of an internal character, and similar material, regardless of how they are stored or compiled.

4. Do specific measures or protections need to be put in place for information to benefit from protection as a trade secret?

Yes. Appropriate measures must be put in place in accordance with the law, business policy, contractual obligations or appropriate standards in order to preserve the secrecy. The measures are determined in accordance with an assessment of the risk of unlawfully obtaining, using and disclosing trade secret information.

Dealings in and ownership of Trade Secrets

1. Are trade secrets transferable and/or licensable?

Yes.

2. Are there specific consequences arising from transfer or licensing of trade secrets by a party other than the trade secrets owner?

Although obtaining, using or disclosing trade secrets can be done by the party other than the holder, in the event of a dispute a person claiming to have obtained or disclosed a trade secret must prove that this was done in accordance with the law, or in a way that is not contrary to good business practices.

3. Is co-ownership of trade secrets permitted?

The right over the trade secret is considered an intellectual property right, not an ownership right. A person who controls the use of trade secrets by virtue of the law will be considered the holder of a trade secret. There can be more than one holder of a trade secret.

Enforcement of Trade Secrets

1. What actions constitute infringement of trade secrets?

Any unlawful acquisition, disclosure or use of a trade secret constitutes the infringement of a trade secret. This includes unfair competition, which is any action taken in the context of industrial or commercial activities resulting in the disclosure, acquisition or use of information, which is a trade secret, without the consent of the trade secret holder and in a manner contrary to law and good business practice (e.g. breach of contractual provisions on keeping a trade secret; abuse of business confidence; industrial or commercial espionage; fraud; or enticement to perform any of these actions; obtaining information that is a trade secret by third parties who know or were required to know that the information is a trade secret and was obtained from a person in whose legal possession; also in reference to the tests and other data related to medicines, medical devices, new chemical compounds and biocidal products, etc.).

2. Are there any measures allowing the trade secrets' owner to gather and/or preserve evidence of infringement of trade secrets?

Yes. The court may issue a writ on security interest upon the request of a person who provides relevant evidence that damage may result from unauthorised acquisition, disclosure or use of a trade secret by another person, or the existence of reasonable doubt that the evidence will be destroyed or that it will subsequently be impossible to obtain.

Securing the evidence may include search of premises, vehicles, books, documents, databases, etc., seizure of objects and documents, blocking of bank accounts, confiscation of cash and securities, examination of witnesses and experts, as well as taking other measures in accordance with the regulation governing the enforcement procedure.

3. What specific interim and final measures and remedies are available in the event of infringement of trade secrets?

Upon the request of a person who provides relevant evidence that damage may be caused by the unauthorised acquisition, disclosure or use of a trade secret by another person, the court may order an interim measure of seizure or exclusion from the circulation of items containing a trade secret, or items that have been produced by the breach of a trade secret, or the instruments for the production of these items, and the measure prohibiting the continuation of initiated actions that are or could be breached by a trade secret. These measures are adopted in accordance with the regulations governing the enforcement procedure.

As for the final remedy, the holder of the trade secret may bring an action in court against any person who commits breach of trade secret. The following may be ordered by the decision of the court:

  1. the cessation of actions that may lead to the unlawful acquisition, use or disclosure of a trade secret and the prohibition of the unlawful acquisition, use or disclosure of information, which is a trade secret;
  2. preventing marketing (i.e. seizing and withdrawing from marketing), altering or destroying all items containing information, which is a trade secret, if that information is possible, directly or indirectly, to be seen or transferred;
  3. compensation for damages, including actual damages and lost profits, and if the injury was done intentionally, the plaintiff may, in lieu of compensation for pecuniary damage, claim compensation up to three times the usual compensation he would have received for the specific use of the protected object, had the use been lawful;
  4. exclusion of that person as a member of a company, if that person is a member of a company;
  5. termination of employment for that person, if that person is employed in a legal person;
  6. publication of the judgment in the public journal on the defendant's expense.

4. Is there a specific period after obtaining interim measures by which the applicant must bring proceedings for a substantive decision on the merits of the claim?

Yes. The applicant must bring an action for a substantive decision on merits within 30 days from the date of the decision on the interim measure, or the writ on security interest, respectively.

5. Are there circumstances in which damages or other financial compensation may be available in place of an injunction and other measures?

Compensation of damages or other financial compensation can be awarded by the court in the appropriate proceedings.

Apart from that, the parties can settle out of court or engage in mediation.

6. Are any interim or final measures and remedies available through ex parte hearings?

The court may decide on the security interest proposal before delivering it to the debtor and allowing him to make a statement:

  1. if the creditor, as a result of the delay, could suffer irreparable damage or damage that would be difficult to repair;
  2. to eliminate the imminent danger of unlawful damage to property, loss, or grave endangerment of rights;
  3.  to prevent violence. 

7. How is financial compensation to the trade secrets holder calculated?

Compensation for damages include actual damages and lost profits, and if the injury was done intentionally, the plaintiff may, in lieu of compensation for pecuniary damage, claim compensation up to three times the usual compensation he would have received for the specific use of the protected object, had the use been lawful. When deciding on the amount of damages, the court in particular considers the proportion between the seriousness of the injury and the interests of third parties.

The calculation of the amount of compensation is almost always done by an expert appointed by the court.

8. What is the limitation period for claims relating to misappropriation of trade secrets?

An action for breach of a trade secret may be filed within six months from the day the plaintiff learned of the injury and the perpetrator, and no later than three years from the day the injury was committed.

9. When does the limitation period begin to run?

The limitation period of six months runs from the day the plaintiff learned of the injury and the perpetrator, and the limitation period of three years runs from the day the injury was committed.

10. Are there any circumstances that interrupt or suspend the limitation period?

There are no special circumstances set by the Law on Protection of Trade Secrets that interrupt or suspend the limitation period.

Yes. According to the Law on Protection of Trade Secrets, the courts and other competent authorities will take appropriate measures to preserve the secrecy of undisclosed information protected in accordance with the provisions of that law and other regulations governing the protection of the secrecy of court proceedings.

12. Are there any particular legitimate interests which may be invoked as an exception to the measures, procedures and remedies for trade secrets protection?

Measures, procedures and remedies for trade secret protection will not apply to the information classified as a trade secret for the purpose of concealing a criminal offence, exceeding the authority or misusing an official position, or another illegal act, and to the information that cannot constitute a trade secret under the particular laws.

Disclosure of the information to the competent authorities or to the public solely for the purpose of indicating the existence of an offence punishable by law will not be considered as infringement of a trade secret.

Undisclosed test data or other data the creation of which requires adequate effort and costs that are submitted to the authorities to obtain a marketing authorisation for a medicine, medical device, or agricultural chemical product using new chemical compounds, or to obtain the permit for marketing of biocidal products can be disclosed under the following conditions:

  1. the competent authority has determined that the disclosure is necessary for the protection of the public; 
  2. all necessary actions have been taken prior to the disclosure to ensure their protection against their use contrary to good business practices; 
  3. the holder of the information must approve the disclosure explicitly in writing. 

13. Are any measures available where proceedings concerning trade secrets are manifestly unfounded and / or found to have been initiated abusively or in bad faith?

Upon the request of the defendant in the litigation or the proceedings for interim or security interest measures in relation to the infringement of the trade secret, the court may determine the appropriate monetary amount at the expense of the plaintiff, as a means of security in the event that the claim is not substantiated.

No. The request of the defendant is filed in the litigation or the proceedings for interim or security interest measures initiated by the plaintiff in relation to the infringement of the trade secret.

Employee / employer liability

1. Are there any protections for “whistleblowers” or similar rights for employees in relation to infringement of trade secrets?

According to the Law on Protection of Trade Secrets, disclosure of the information to the competent authorities or to the public solely for the purpose of indicating the existence of an offence punishable by law will not be considered an infringement of a trade secret.

2. Can an employer be liable for their employee’s infringement of a third party’s trade secrets?

Whistleblowers are also protected in accordance with the Law on Protection of Whistleblowers ("Official Gazette of the Republic of Serbia", No. 128/2014), which requires that the personal data of whistleblowers are protected, that employers cannot take any actions against employed whistleblowers (e.g. terminating employment, taking disciplinary measures, lowering salary, etc.), that the whistleblowers can seek protection from the court, etc.

Portrait of Maja Stepanović
Maja Stepanović
Partner
Belgrade