Study on the Legal Protection of Trade Secrets in the Context of the Data Economy

This study analyses a) to what extent the EU legal framework on trade secret protection applies to data which is shared across firms and organisations and b) the application of trade secrets by European firms in practice. It is set against the backdrop of the growing significance of the data economy and data sharing. The study finds that while the significance of data sharing has been and will be increasing, the protection and appropriation of shared data with trade secrets is lagging. Only a few firms are truly familiar with the application of trade secrets in the context of shared data. On the one hand, this might partly be attributed to the rather young age of the EU Trade Secrets Directive (TSD) and still developing IP management practices of many firms that take due account of trade secrets. On the other hand, and because of the lack of developed jurisprudence, many firms are uncertain regarding the exact meaning of some of the terminology which defines trade secrets as well as regarding actual enforceability. Part of this uncertainty can be alleviated through legal reasoning, but some parts may need further clarification or jurisprudence to develop. In practice, trade secrets are used mostly as a second layer of protection after contracts (which are clearly the preferred mode of protection) as well as a tool against misappropriation by third parties with whom no contractual relations exist. The study develops recommendations in the areas of a) operationally improving firm performance when using trade secrets for shared data; b) reducing possible ambiguity and improving clearness when interpreting the TSD; and c) improving and monitoring the legal framework surrounding the use of trade secrets for protecting shared confidential and commercially valuable data.