Here is why know-how protection is becoming increasingly important:
There are new risks around know-how protection
As the business world becomes ever more interlinked and information processing chains grow longer, there is an increasing risk of confidential business information and sensitive data being intercepted and know-how falling into the wrong hands. While modern communication technology facilitates the sharing of knowledge within the organisation and with customers and business partners, the decentralisation of corporate data (e.g. through the use of cloud-based storage over static storage systems) and greater use of mobile devices increase the susceptibility of companies to industrial espionage, the unauthorised disclosure of business secrets and other unwanted outflows of know-how.
Know-how protection as a corporate challenge
Companies face a major challenge when it comes to effective and efficient protection of their expertise. Active know-how protection affects almost every area of a business – sensitive information is by no means limited to research and development departments. Employees who routinely have access to supplier and customer data, accounts, business strategies or production reports all hold a wealth of knowledge that every company needs to protect. From a commercial perspective, know-how is thus increasingly becoming at least as important as established intangible assets such as patents, trademarks and designs.
The legal situation surrounding company-related know-how is complex
The legal position relating to know-how protection is complex and rather unsatisfactory. At present, the European Union lacks comprehensive legislation on know-how protection. It is thus necessary to draw on a number of different individual laws in order to protect trade secrets.
In response to this situation, the European Commission has established the goal to standardise the protection of trade secrets throughout the EU. On 5 July 2016 a Directive on the protection of undisclosed know-how and confidential business information ((EU) 2016/943) has entered into force.
The Directive stipulates that it will only be possible for a party to rely successfully on legal protection of confidential information if it can be demonstrated and evidenced that the information in question has been "subject to reasonable steps under the circumstances... to keep it secret". In other words, companies need to take specific action to ensure protection of trade secrets.
The Directive’s local implementation date in the various EU Member States varies and some have not yet set one. The Directive was supposed to be implemented in each Member State by 8 of June. Recent experience with GDPR comes to show that businesses often leave things to the last moment and this could be damaging.
How do your know-how protection arrangements measure up? – Find out!
How well does your organisation protect its trade secrets? With our online stress test, it takes just ten minutes to find out whether your company needs to take action to protect its know-how. Just click on the jurisdiction that interests you and then take the test to find out where you stand. You can always get in touch with your local contact in case you have questions or uncertainties.