The new Act will clarify and in some aspects strengthen the legal protection of trade secrets. The main changes relate to the definition of trade secrets, the acts that constitute infringement of trade secrets and the enforcement measures that may be invoked when trade secrets are infringed.
The new Norwegian Trade Secrets Act, implementing Directive (EU) 2016/943 on the protection of undisclosed know-how and business information (trade secrets), enters into force on 1 January 2021.
Holders of trade secrets must take steps to keep information secret
Both under the current Law and under the new Act there is a requirement for trade secrets protection that the holder of information must have taken reasonable steps to keep the information secret. This requirement is strengthened under the new Act. From the turn of the year it is therefore even more important that businesses that hold unique information which is of commercial importance ensure that they have sufficient measures in place to protect such information from unauthorized disclosure or misappropriation. In short, all holders of trade secrets should implement a storage policy with access limitations and data security measures to avoid unauthorized access. Holders of trade secrets must also make sure that all employees and third parties which are given access to the information have signed non-disclosure agreements (NDA) before access is given.
The new Act sets out three infringing acts; unlawful acquisition, use and disclosure of trade secrets. Such acts are considered to be unlawful if they are carried out without the consent of the holder of the trade secrets, or otherwise violates legislation or agreements. When a person have obtained trade secrets from someone who unlawfully disclosed it, the use or disclosure constitutes an infringing act if the receiving person knew or ought to have known that the trade secret was unlawfully disclosed.
The new Act introduces a better protection for goods that derives advantage from unlawful acquisition, use or disclosure of a trade secret (infringing goods). For instance, manufacturing, offering or placing on the market of infringing goods are prohibited when the person carrying out such acts knew, or ought to have known, that the goods constituted an infringement of a trade secret.
The new Act strengthens the measures that are available for the holder when a trade secret is infringed. Inter alia, injunctions prohibiting on-going and imminent infringements, corrective measures in relation to infringing goods, such as recall of the infringing goods from the market or destruction of the infringing goods and compensation or damages based on the one of the following three alternatives that is the most favourable for the holder of the trade secret: (i) a reasonable license fee and damages for loss which would not have been incurred had the trade secrets been licensed, (ii) damages for financial loss suffered as a result of the infringement, or (iii) compensation corresponding to the infringer's financial gain. The provision on compensation and damages in the new Act is similar to the provision on compensation and damages in the current Marketing Control Act.
Importantly, the new Act introduces a new provision which entails that injunctions and corrective measures are subject to statutory limitation of three years from the time the holder of the trade secret became aware of, or ought to have become aware of, the infringement and the infringer.
We are currently working on the commentary to the new Act, which is to be published by Universitetsforlaget in 2021.