Brexit and trade secrets: 6 key things to know

24 November 2020

On 31 December 2020, the Brexit transition period comes to an end, and significant changes to the law in the UK will take effect.



For trade secrets and the law in relation to confidential information, there are some important soundbites for businesses to be aware of - some of which you may already have heard about, while others may be news outside the UK (even for experienced trade secrets lawyers):

  1. English law protecting against the misuse of confidential information, including trade secrets, has evolved in the tradition of the common law, which has long been considered to be compliant with the country's obligations under the TRIPS Agreement with respect to legal protection for "undisclosed information". The tort of breach of confidence protects information which has the "necessary quality of confidence", is communicated in circumstances importing an obligation of confidence, and is used (or threatened to be used) in an unauthorised way to the detriment of the owner (Coco v A. N. Clark [1969] RPC 41, Attorney-General v Guardian Newspapers (No 2) [1990] 1 AC 109).
     
  2. The first English legislation to address protection for confidential information came into force in 2018, in order to implement the first EU legislation in this area (The Trade Secrets Directive). Recent case law from the High Court suggests that the common law principles are unaffected (Trailfinders v TCL [2020] EWHC 591 (IPEC), Shenzhen Senior v Celgard [2020] EWCA Civ 1293).
     
  3. The application of settled principles of English law protecting confidential information and trade secrets therefore continues. A recent example is the Shenzhen v Celgard case, in which Court of Appeal confirmed the award of an interim injunction to restrain importation into and sale in the UK by a Chinese manufacturer ('Senior') of separators used in lithium-ion batteries. Celgard alleged that the goods concerned had been developed in China after a former employee of Celgard in the USA, who had had access to valuable trade secrets regarding Celgard's battery separator materials, joined Senior in China and disclosed Celgard's trade secrets to Senior.
     
  4. The national nature of the legal protection for trade secrets in the UK means that the 31 December 2020 Brexit transition will not impact trade secrets protection in the UK. Additionally, as a signatory to the Hague Convention on Choice of Court Agreements, the UK courts will continue to recognise and give effect to exclusive jurisdiction clauses, including those conferring jurisdiction on the courts in the UK in respect of trade secrets.
     
  5. It will remain the case that all businesses, and particularly those that utilise confidentiality as a significant means to protect valuable proprietary information, should continue to maintain and update their trade secrets policies and procedures on a periodic basis, including reviewing technical security measures that are in place to protect trade secrets, particularly from cyber-based threats.
     
  6. Unless agreement is reached to replace (in respect of the UK) the "Brussels" and "Lugano" regimes on jurisdiction and enforcement of judgments in the EU and the EEA, in the UK the common law will govern such issues from 1 January 2021. The common law already governs such issues as between the courts in the UK and the courts in the US and Canada. The transition presents some opportunities for well-informed potential litigants.

For in depth commentary on what this topic, please explore our article What does Brexit Mean for Intellectual Property? Although necessarily a substantive piece of analysis, the drop-down format enables you to dip into the areas of most interest to you (for example, exhaustion, patents, designs, copyright and neighbouring rights, customs arrangements and IP litigation). We also explain the wider legal position, within which sits the law relating to trade secrets and intellectual property.

For bespoke advice tailored to your business's need, please get in touch.


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