New Rules for Trade Secrets: Broader Definition, Greater Certainty for Companies

The government is preparing an amendment to the legal framework for the protection of trade secrets. Its objective is to refine and strengthen existing protection while aligning Czech legislation with the requirements of 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.

While the core essence of trade secrets remains unaffected, the government proposes to broaden the definition of their violation, thereby strengthening legal protection. The changes primarily concern Act No. 89/2012 Coll., the Civil Code, and Act No. 99/1963 Coll., the Code of Civil Procedure.

Under current legislation, a trade secret violation falls under the legal definition of unfair competition, which limits the enforceability of protection. The amendment moves trade secret violations into standalone provisions; as a result, a violation will no longer have to meet the conditions set out in the so-called "general clause" of unfair competition. Consequently, legal protection will extend to cases where the violation occurs outside the scope of business dealings. However, a trade secret violation within the context of business dealings will still constitute an act of unfair competition.

Furthermore, the amendment expands the definition of trade secret infringement. While the current regulation only recognizes the unauthorized disclosure and use of a trade secret, the new wording also distinguishes the unlawful acquisition of a trade secret. It also adds further examples of violations, such as the import, export, or storage of infringing products for the purpose of their manufacture, offering, or placing on the market. Additionally, the conditions under which the acquisition, disclosure, or use of a trade secret is considered unlawful are to be more precisely defined.

The amendment is also set to introduce a provision explicitly stating situations that do not constitute a trade secret violation—for example, if a trade secret is acquired through observation, study, disassembly, or testing of an item that is publicly available or is lawfully in the possession of the person acting, provided they are under no obligation to limit the acquisition of the trade secret.

Overall, the amendment aims to contribute to greater legal certainty and the clarity of the legal framework. Through this step, the government promises a positive impact on the business environment without the amendment having any impact on public budgets.

This text was translated by AI