New law makes defending yourself against trade secret theft easier
secret theft—no matter if affecting products, information, databases, or other
secrets—can have devastating effects on your business. We’ve previously
discussed how to prevent it, this newsletter explains how a new law can help
you control the damage done to your company once trade secret theft has taken
place. Read on for an overview.
On 17 December 2018, the Restriction of Unfair Competition and Protection of Trade Secrets Act entered into force. Beyond the legalese, the new law brings Estonia up to speed with trade secrets protection at the EU level, and gives you the following options:
- You can claim damages
- You can demand that a competitor’s goods, produced to benefit from your trade secrets, are taken out of production, off the shelves and destroyed
- This can be done already while legal proceedings are still going on, and before a court decision is made
- Beyond having products destroyed, courts can also prohibit the use of your trade secret, taking away your competitor’s opportunity to profit from it further
In short, the new law now provides a clear and precise legal basis for such claims that didn’t exist previously. This makes it more likely that the courts will actually take these steps as well.
Example: Vital employee leaves, starts working for a competitor
A tech company specialising in microchips falls out with its chief developer, who leaves the business and shortly after starts working for a competitor. Some time after he leaves, the tech company discovers that the developer sent several mapping designs to his personal e-mail address just days before leaving.
Meanwhile, the competitor releases a microchip that seems to apply the mapping designs the former chief designer sent to his personal e-mail.
The tech company can now claim compensation for the damages caused. These include its decreasing revenue as well as their own microchip’s lost advantages of use and decreased value.
Now under the new law, the tech company can also claim that the court prohibit any actions of the competitor that further damage the trade secret in question. In plain language: the court can keep the competitor from producing, offering and releasing their new microchip.
If they’ve already shipped it, the court can order them to recall and withdraw the products, and order the destruction or delivery of all or a part of any document, object, material, substance or electronic file containing or embodying the trade secret.
New law allows to provisionally enforce claims already during court proceedings
Although generally any such action to limit the damage to your company in case of trade secret theft can only be taken at the end of the court proceedings, the new law provides a clearer basis to enforce such measures already while the case is still ongoing.
This has the potential to decidedly limit the damage done to the company that had a trade secret stolen.
As the law is more or less brand new, there is no established court practice yet in the way it is applied, which is making it hard to predict how exactly the courts will go about this. However, the clear and precise basis for such claims that we have now decidedly increases the likelihood of such steps getting approved by the courts.
If you have any questions regarding trade secrets, trade secret theft and how to prevent it, don’t hesitate to contact Artur Sanglepp, sworn advocate at Glikman Alvin LEVIN, at (+372) 686 0000 or via email Artur.Sanglepp@levinlaw.ee. We are more than happy to help out.