Proposal of a New Swedish Trade Secrets Act Implementing the EU Directive

Author: Camilla Alfredsson

On 8 June 2016, the European Council adopted the EU Trade Secrets Directive (EU) 2016/943 (the “Directive”) on the protection of undisclosed know-how and business information against their unlawful acquisition, use and disclosure. The aim of the Directive is to harmonise the existing diversity of protection of trade secrets in Member States and to provide an additional layer of protection for companies doing business in the EU by introducing common measures against unlawful acquisitions, use and disclosure of trade secrets. The Directive must be implemented by the Member States before 9 June 2018.

On 31 May 2017, a proposal of a new Swedish law on trade secrets to replace the current Trade Secrets Act (Sw: Lagen (1990:409) om skydd för företagshemligheter) was introduced. The current Swedish legislation responds to a large extent to the requirements in the Directive, but the proposal nevertheless suggests a number of changes an supplements.

The new key provisions in the proposal are;

• The definition of a trade secret shall be amended to more closely follow the definition in the Directive. A trade secret is currently defined as information about the company’s business activities that the company keeps confidential and of which disclosure is likely to cause competitive damage. The new trade secret definition is proposed to maintain the requirement that a disclosure must be likely to cause competitive damage, but the requirement that the information must concern the discloser’s business activities is proposed to be removed.

• The term “attack” will be used as a generic term for actions today referred to as “acquisition, use or disclosure” of trade secrets. An unlawful attack shall not require intent or negligence.

The Swedish legislator goes further than both the Directive and the current Swedish legislation by proposing that new rules shall apply to criminal acts in respect of trade secrets:

• Penal provisions for unauthorised use of a trade secret or unauthorised disclosure of a trade secret (Sw: olovligt utnyttjande av företagshemlighet och olovligt röjande av företagshemlighet) shall apply. The provisions target use or disclosure of a trade secret by a person who had lawful access to the trade secret due to employment or similar participation in the company’s business.

• The employee shall not be liable for unlawful use or disclosure that occurs later than two years from when the employment has ceased (or for other representatives, two years from when the participation in the discloser’s business has ceased).

The legislation is proposed to enter into force on 1 June 2018.