hltlaw

We all know how important the concept of privacy is for firms, being fundamental for protecting know-how and commercial information.

To this end, Legislative Decree 63/2018, coming into force on 22nd June 2018 and implementing Directive no. 943/2016, has introduced considerable modifications to the “Industrial Property Code” (Legislative Decree no. 30 dated 10/02/2005), aimed at higher levels of protection.

The notion of confidential business information shall be replaced by the term “trade secret”, which includes company information, technical-industrial experience and/or commercial “secrets” (namely, that which overall or in the specific configuration and combination of their components is not generally known or easily accessible to experts and operators within the sector, and which hold economic value due to being secret and are subject to measures reasonably adequate to maintain the secrecy by those held to maintain such). The “trade secret” is expressly added by Article 1 of the code to the concept of industrial property, on par with trademarks and other distinctive signs, geographical indications, designations of origin, designs and models, inventions, utility models, topographies of semiconductor products, and new plant varieties.

Without prejudice to the discipline of unfair competition, the code grants the right of the lawful holder of a trade secret to prohibit a third party from acquiring, disclosing to others or utilising such secrets in an abusive manner.

This concerns the production, supply, marketing, import, export or storage of goods for which the design, features, function, production, or marketing benefit significantly from the aforesaid trade secrets, acquired, utilised or disclosed unlawfully.

As to the rights and activities arising from the infringement of a trade secret, there is a five-year period of limitation (as per the last paragraph of Article 99 of the Code, added by Legislative Decree no. 63 dated 11th May 2018).

Another new features establishes a means for protecting the confidentiality of a trade secret throughout judicial proceedings, on the basis of which the Court may forbid persons nominated by the same or delegated to the parties and their representatives and advisers, defenders, administrative employees, witnesses, and other persons who have any access to the measures, records and documents on file within the office, to use or reveal trade secrets considered confidential as the subject of the proceedings. This measure remains in force even after the conclusion of the proceedings involving such a provision. It can also restrict access to a limited number of people for hearings, records and documents on file, permitting the obfuscation or omission of the parts containing trade secrets in the provisions defining the procedures.

At the request of the parties, it may be possible to adopt an alternative to precautionary measures to be admitted, for example, regarding the payment of indemnification, which must be adequate in relation to the injury suffered by the party requesting such. To this end, an amount of compensation is established, which must not exceed the amount that would have been paid for the legitimate use of that subject to trade secret.

Moreover, as an alternative to the application of the precautionary measures, it is possible to obtain authorisation from the Court to continue to utilise the trade secrets, paying an appropriate security deposit for any damages suffered by the lawful holder, in any case prohibiting the revelation of trade secrets to third parties permitted to utilise such in this form.

Finally, criminal and administrative sanctions for the violation of trade secrets have been introduced.

Pursuant to Article 388 of the Penal Code, envisaging that even those who evade executing an inhibiting measure or correction issued by the court for the protection of industrial property rights or those who violate the confidentiality order are liable for misconduct regarding the failure to execute the intent of a court ruling.

Moreover, pursuant to the Article 623 of the Penal Code, for the violation of trade secrets or information intended to remain secret, imprisonment of up to two years and increases in the penalty is established, whereby the offence is committed via electronic means.