Besides its new provisions defining the trade secret and sanctioning its infringements, the French Law of 30 July 2018 regarding Trade Secret offers new procedural instruments aimed at efficiently protecting the confidentiality of the exhibits submitted by the parties.
Article L.153-2 of the Code of Commerce provides that any person having access to an exhibit or the content of an exhibit that is recognized by the judge as being covered or likely to be covered by a trade secret is bound by a confidentiality duty and prohibited from any use or disclosure of the information contained therein. This obligation does not expire at the end of the proceedings.
In addition, when the communication or the production of an exhibit which is alleged by a party or a third party to disclose a trade secret is mentioned or requested, Article L.153-1 of the Code of Commerce now allows the judge, ex officio or at the request of a party or that of a third-party, to:
“1° Review this exhibit alone, and if deemed necessary, order an expert review and seek the opinion, for each of the parties, of a person assisting or representing it, so as to decide whether to apply the protective measures set out in this Article;
2° Decide to limit the disclosure or production of the exhibit to certain parts thereof, order disclosure or production of a summary of the exhibit only, or restrict all parties’ access to a single individual person and a person authorized to assist or represent that party;
3° Decide that hearings will be held and the decision issued in camera;
4° Adjust the statement of reasons for its decision and the mode of publication thereof to the need to the necessities of trade secret’s protection“.
This transposition has gone beyond the text of the European Union Directive of 8 June 2016 by generalizing the trade secret protective regime to every kind of civil and commercial Court proceedings (and not only to proceedings specifically regarding “procurement, use or illicit disclosure of a trade secret“).
Before implementation, the absence of specific provisions could discourage parties from taking legal action or submitting strategic but confidential documents to the proceedings, thus weakening their legal position.
The French law on Trade Secret should notably bring a fresh impetus to French patent litigation by allowing access to information under specific protective measures.
In a Court order of 9 October 2018, the pre-trial judge of the Paris Court of Appeal has directly applied these new provisions in a pending case, where the production of various confidential patent assignments and share of royalties agreements, useful to determine a FRAND royalty rate has been requested.
Implementing the aforementioned provisions, the pre-trial judge ordered that the communication of the non-redacted documents be limited to the parties’ lawyers and himself, as a first step. The parties’ counsels will then send him their written observations about the parts of these documents that could potentially jeopardize a trade secret. If need be, it will then be decided, with a new Court order, whether to implement one or several measures provided for by paragraphs 2°, 3° or 4° of Article L.153-1.
Interestingly, the pre-trial judge has not characterized how the alleged infringements of trade secrets could meet the legal requirements, to implement the ambitious provisions offered by the new French trade secrets law.
This decision suggests and offers hope that the new provisions of the Law of 30 July 2018 will be subject to a particularly large implementation, notably making Paris an advantageous forum for accessing FRAND rate information.
Post available in French language here