European Union Considering Consolidation of Patchwork of Trade Secret Laws

The European Union is in the early stages of creating a Union-wide law governing the protection of trade secrets. The new law, proposed Nov. 28 and at least a year from possible implementation, would replace a patchwork of individual state regulations and procedures governing trade secrets. This patchwork, observers say, makes the trade waters of Europe difficult to negotiate.

The European Commission as part of its “Innovative Union” initiative, identified the currently uneven protection and enforcement of trade secrets within the EU as a “significant factor inhibiting cross-border research and development as well as general innovation.” Not only is the present situation interfering with intra-Union trade, it also inhibits or drives up the cost of international projects involving the United States, Canada, Japan or other countries wishing to do business with European multinationals.

Observers cite two reasons for the EU’s focus on the problem now. First, the ongoing negotiations among the U.S. and a number of smaller nations around the Trans-Pacific Partnership (TPP) is raising concerns among other nations about America’s participation in ongoing intellectual property protection negotiations. Second, there has been a perceived significant increase in spying, industrial espionage and trade secret thievery, particularly by Asian-based companies and individuals, in recent years.

The proposed new directive can be read and downloaded here.