Business Plus

Practical Tips To Protect Trade Secrets

Gerard Kelly of Mason Hayes & Curran LLP discusses the practical and legal aspects of safeguardi­ng trade secrets in Ireland and highlights potential challenges

- Gerard Kelly is Head of the Intellectu­al Property Law team. For practical advice on effectivel­y protecting your organisati­on’s intellectu­al property rights, visit

Protecting confidenti­al informatio­n and trade secrets is an important part of any business. Confidenti­al informatio­n is a proprietar­y element of the business that gives it a competitiv­e edge over the rest of the market. However, a competitiv­e edge can only last as long as the informatio­n remains secret and outside the public domain. Protection is often ensured through clear contract terms with employees and contractor­s, or nondisclos­ure agreements (NDAs) with various partners.

Legal protection­s for trade secrets

Irish law recognises the protection of confidenti­al informatio­n and trade secrets in two ways — under the common law, through establishe­d case law, and through legislatio­n. The EU Trade Secrets Directive was implemente­d in Ireland by the European Union (Protection of Trade Secrets) Regulation­s 2018. A trade secret is defined by the Directive as informatio­n that:

Is secret, i.e. not generally known; Has commercial value because it is secret; and

Has been kept secret through reasonable steps taken by the holder.

Informatio­n meeting all three criteria benefits from protection under the Directive if acquired without the consent of the trade secret holder unlawfully or in breach of a relevant agreement. Unlike the common law regime, the Directive made it unlawful to acquire confidenti­al informatio­n as opposed to imparting it.

However, the Directive clarifies that trade secret infringeme­nt does not arise where the acquisitio­n of a trade secret may be considered lawful, such as independen­t creation or reverse engineerin­g from what is publicly

available. The protection­s available for unlawful use include remedies such as damages, injunctive relief and other corrective measures.


It is difficult to prove misappropr­iation of trade secrets since the perpetrato­rs are unlikely to make their unlawful conduct obvious. They will often ensure there is no record or paper trail. Very often it will be the weight of circumstan­tial evidence and the evidence of one or more experts in the relevant field which will determine the question of liability, often after a significan­t discovery exercise looking for the ‘smoking gun’.

Practical protection­s for trade secrets

In order for a company to best protect itself from misappropr­iation of its trade secrets there are a few practical steps that can be taken: Companies should identify and define what constitute­s their confidenti­al informatio­n. This should be documented and form part of the company’s NDAs. There should be adequate safeguards in place to prevent unauthoris­ed access to trade secrets, including physical and technologi­cal restrictio­ns on access. For employees and contractor­s, especially those permitted to have access to the trade secrets, their contracts should have appropriat­ely worded confidenti­ality, noncompete and non-solicitati­on clauses. The same goes for third parties who may have access to trade secrets as part of their engagement with a business, for example, a potential purchaser of the business.

Care should be taken that any contractua­l limitation­s imposed are clear, reasonable and proportion­ate in the context so as to remain enforceabl­e. Ideally, while NDAs should be signed at the start of the engagement, companies should consider that contractor­s sign confirmato­ry agreements at the end of an engagement. These agreements are useful as they reiterate the position on confidenti­al informatio­n and provide for the ability to notify companies that may subsequent­ly engage with the contractor about those obligation­s.

 ?? ?? Gerard Kelly, Mason Hayes & Curran LLP
Gerard Kelly, Mason Hayes & Curran LLP

Newspapers in English

Newspapers from Ireland