Entry into force of the law on the protection of trade secrets

Since 2 July 2019, Luxembourg has had full-blown legislation on trade secrets. After a one-year delay, Luxembourg finally transposed Directive (EU) 2016/943  of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure ("Directive").

The Law of 26 June 2019  on trade secrets¹ (“Trade Secrets Law”) literally transposes the Directive and provides a legal definition of “trade secrets”, which was until now only defined by the courts. The Trade Secrets Law defines as “trade secrets” information which fulfils the three following cumulative criteria: (i) it is secret, (i.e. it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question), (ii) it has commercial value because it is secret and (iii) it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret. For example, market studies, business plans, customer databases may be trade secrets.

The Trade Secrets Law fills a gap for businesses for which trade secrets have significant commercial value but do not satisfy the conditions to be protected under intellectual property law or are not registered as an industrial property title (on a voluntary basis) because of their confidential nature. From now on, the trade secret holder will have at its disposal an arsenal of measures and remedies (such as prohibitory injunctions, damages and corrective measures) that may be requested from the court against an alleged infringer in civil proceedings. These actions are time-barred after two years from the time the trade secret holder becomes aware of the unlawful acquisition, use or disclosure of the trade secret and of the infringer’s identity.

Protection of trade secrets is not absolute. The Trade Secrets Law provides for a series of derogations from the application of the measures detailed in the Trade Secrets Law which aim at ensuring that the fundamental freedoms such as the right to freedom of expression and information, including respect for the freedom and pluralism of the media (and more particularly investigative journalism), and whistleblower protection are not jeopardised.

The Trade Secrets Law also provides for rules and measures aiming at ensuring the confidentiality of trade secrets during judicial proceedings relating to the latter. Such measures should encourage trade secret holders to assert their rights with respect to the unlawful use or disclosure of their trade secrets before the courts.