appendix 2 - competition law - country...

1

Appendix 2

Competition Law - Country Report

AUSTRIA

A. APPLICABLE REGULATORY FRAMEWORK

A.1 Applicable competition law provisions

Austrian competition law (i.e., the Austrian Cartel Act (Kartellgesetz 2005),1 and the Austrian Competition Act (Wettbewerbsgesetz))2 do not contain any substantive provisions that target violations of trade secrets (other than procedural safeguards). The general provisions contained in the Cartel Act and relating to illicit agreements/concerted practices (Section 1 of the Cartel Act) and abuses of dominant position (Section 5 of the Cartel Act) may, however, apply also to situations relating to the licensing and disclosure of trade secrets. The substantive provisions of Austrian competition law relate to trade secrets only in circumstances where the use of trade secrets has an impact on competition, which is the final object of competition law protection. The competition law is enforced by the Federal Competition Authority (Bundeswettbewerbsbehörde, “FCA”), the Federal Cartel Prosecutor (Bundeskartellanwalt, “FCP”) and the Cartel Court (Kartellgericht). Decision-making lies only with the Cartel Court which can impose fines for the infringement of the Cartel Act and Article 101 and 102 of the Treaty on the Functioning of the European Union (“TFEU”). The Supreme Cartel Court (Kartellobergericht) hears appeals from decisions of the Cartel Court. The Competition Commission (Wettbewerbskommission) is an advisory body to the FCA. A.2 Definition of trade secrets

There is no uniform definition of trade secrets under Austrian law (in particular, not in relation to competition law matters), even though the term “trade secrets” (Geschäftsgeheimnis) is used in several laws (inter alia Sections 39, 47 and 74 of the Cartel Act).3 According to prevailing opinion, trade secrets are defined as facts and

1 Federal Act for the Prevention of Cartels and Other Barriers to Competition (Bundesgesetz gegen Kartelle und andere Wettbewerbsbeschränkungen (Kartellgesetz 2005 – KartG 2005)); Federal law gazette BGBl. I Nr. 61/2005 as amended by BGBl. I Nr. 2/2008. In particular Section 39 Cartel Act.

2 Federal Act for the Establishment of the Austrian Federal Competition Authority (Bundesgesetz über die Einrichtung einer Bundeswettbewerbsbehörde (Wettbewerbsgesetz – WettbG); Federal law gazette BGBl. I Nr. 62/2002 as amended by BGBl. I Nr. 62/2005, BGBl. I Nr. 106/2006, BGBl. I Nr. 2/2008 and BGBl. I Nr. 111/2010. In particular Section 10(1); Section 10b(2); Section 11(1); Section 17(4) Competition Act.

3 Such as Sections 122, 123, 124 of the Federal Penal Code (Bundesgesetz über die mit gerichtlicher Strafe bedrohten Handlungen (Strafgesetzbuch – StGB)); Federal law gazette BGBl. Nr. 60/1974 as amended by BGBl. I Nr. 130/2011); Sections 11, 26 Federal Act Against Unfair Competition (Bundesgesetz gegen den unlauteren Wettbewerb 1984 (UWG)); Federal law gazette BGBl. Nr. 448/1984 as amended by BGBl. I Nr. 79/2007; Section 119 Federal Patents Act (Patentgesetz 1970); Federal law gazette BGBl. Nr. 259/1970 as amended by BGBl. I Nr.

2

findings of economic and commercial importance, such as customer lists, customer contracts, etc. The relevant facts shall relate to the undertaking and may be of relevance to the ability to compete. It is furthermore necessary that the undertaking has a legitimate interest (berechtigtes Interesse) in non-disclosure. Trade secrets are considered “information” (Angaben) within the meaning of Section 4(1) of the Austrian Data Protection Act (Datenschutzgesetz) as the act also relates to data of legal persons.4 A.3 Applicability of EU competition law principles

The FCA, the Cartel Court and the Supreme Cartel Court take into account the decision practice of the European Commission (“Commission”). The national competition authorities also apply principles of the block exemption regulations of the European Commission when reviewing agreements as to their conformity with Section 1 of the Cartel Act and Article 101 of the TFEU (such as the Transfer of Technology Block Exemption Regulation). Similarly, the Commission’s decisions – together with the decision practice of the community courts – concerning the applicability of Articles 101 and 102 of the TFEU impact the decisions of the Cartel Court and the Supreme Cartel Court when assessing agreements or case of abuse of dominant position concerning trade secrets. A.4 Decisional practice of the Cartel Court

There is no case law of the Cartel Court (or the Supreme Cartel Court) that specifically relates to trade secrets (other than with regard to violations of the prohibition to enter into agreements restricting competition within the meaning of Section Cartel Act/Article 101 of the TFEU – with specific reference to exchange of competitively sensitive information, which is however not relevant for the purpose of this Study – and procedural safeguards regarding the protection of trade secrets from access of third parties in the course of cartel proceedings). A.5 Civil court judgements

The Austrian civil courts have never dealt with competition law issues involving trade secrets. A.6 Inadequacies and need for a European harmonised and common

legislation specifically targeted to trade secrets

Austrian competition law protects competition, and trade secrets might be of relevance – only under certain exceptional circumstances – with regard to violations of the prohibition to enter into agreements restricting competition within the meaning of Section Cartel Act/Article 101 of the TFEU and the abuse of a dominant position within the meaning of Section 5 Cartel Act/Article 102 of the TFEU). A European harmonized 135/2009; Section 125 Federal Telecommunications Act (Bundesgesetz, mit dem ein Telekommunikationsgesetz erlassen wird (Telekommunikationsgesetz 2003 - TKG 2003); Federal law gazette BGBl. I Nr. 70/2003 as amended by BGBl. I Nr. 102/2011; Sections 305, 321 Code of Civil Procedure (Gesetz über das gerichtliche Verfahren in bürgerlichen Rechtsstreitigkeiten – (Zivilprozessordnung - ZPO)); Federal law gazette RGBl. Nr. 113/1895 as amended by BGBl. I Nr. 108/2011.

4 Federal Act concerning the Protection of Personal Data (Bundesgesetz über den Schutz personenbezogener Daten (Datenschutzgesetz 2000 - DSG 2000)); Federal law gazette BGBl. I Nr. 165/1999 as amended by BGBl. I Nr. 112/2011. See Jahnel, Datenschutzrecht, para 3/72.

3

and common legislation on trade secrets would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights.

B. POWERS OF THE CARTEL COURT AND PROTECTION OF TRADE SECRETS IN THE ADMINISTRATIVE PROCEDURE

B.1 Starting of FCA investigations

The FCA and the FCP can start investigations for suspected breach of Austrian or EU competition law on their own initiative and upon a complaint by any interested third party (including consumer or trade associations, administrative authorities, competitors, customers, or individuals, e.g., former employees). An investigation can also stem from a leniency application submitted by an undertaking involved in a restrictive agreement/concerted practice. B.2 Cartel Court sanctioning powers

The Cartel Court can issue orders to the undertakings concerned to bring an immediate end to the infringements. Alternatively, the Cartel Court can order structural obligations (if there are no other equivalent measures available or other measures would have higher costs for the undertakings concerned) (Section 26 of the Cartel Act). In addition, the Cartel Court may accept commitments and declare them to be binding, on the basis that these commitments will prevent future infringements. A decision by the Cartel Court to accept commitments terminates the proceedings, although there are some circumstances that can cause a later reopening of the proceedings (Section 17 of the Cartel Act).

In addition, the Cartel Court may impose fines of up to 10% of the aggregate group turnover (of the last financial year) on undertakings (or associations of undertakings) involved in the infringement of the prohibition on restrictive agreements (Section 1 of the Cartel Act); the abuse of a dominant market position (Section 5 of the Cartel Act); failure to comply with a commitment imposed by the Cartel Court (Section 27 of the Cartel Act); breach of Article 101 or Article 102 of the TFEU (Section 29 of the Cartel Act). Individuals are not liable under Austrian competition law. However, there are (to some extent) criminal sanctions for breaches of competition law. Only the FCA and the FCP may apply to the Cartel Court for the imposition of fines pursuant to Section 29 of the Cartel Act. B.3 Powers to carry out inspections

The Cartel Court may – upon application from the FCA – authorise the FCA to search premises (including computer systems), provided that there are grounds to suspect that an infringement of the prohibition of cartels (Section 1 of the Cartel Act, Article 101 of the TFEU) or an abuse of a dominant market position (Section 5 of the Cartel Act, Article 102 of the TFEU) occurred and the searching of premises is necessary to obtain information from business documents (Section 12 of the Competition Act). In carrying out the search of premises, the FCA may:

4

• access/search all premises of the undertaking, and can copy any document, in whatever format, held by the undertaking;

• request oral clarifications on the subject matter of the investigation during the

raids; and

• request information and documents relevant to the case of the undertakings under investigation.

B.4 Rules protecting trade secrets from disclosure in the course of Cartel

Court proceedings

There are no clear rules regarding the protecting of trade secrets that are divulged in cartel proceedings. This is also due to the fact that there is no uniform definition of trade secrets under Austrian law (in particular not in relation to competition law matters). Under the relevant rules of procedure concerning FCA competition law investigations, all the information acquired during the proceedings (including trade secrets) must be used only for the purposes for which it was requested, must be treated as confidential and cannot be divulged, even to government departments and authorities. Section 39 of the Cartel Act provides that in cartel proceedings, third parties may not have access to file without the parties consent (para 2). Thus, it is not relevant whether the files of the Cartel Court contain trade secrets of the parties as their consent (to join proceedings or grant access to file for third parties) is required in any case. Upon application by a party to the proceedings, the Cartel Court may exclude the general public from court hearings where this is necessary to protect trade secrets (Section 47(1) of the Cartel Court). The general public may be excluded for all or just individual hearings. B.5 Possibility for the claimant to participate in the proceedings

Any undertaking or association of undertakings whose legal or economic interests are affected may apply to the Cartel Court to (i) order to end an ongoing infringement of the Cartel Act, Article 101 or Article 102 of the TFEU (Section 26 of the Cartel Act); or (ii) to declare that an infringement has occurred in the past (Section 28 of the Cartel Act). However, pursuant to the decision-making practice of the Supreme Cartel Court, the intention to pursue claims for damages does not amount to a legitimate interest (berechtigtes Interesse) that is required to make a declaratory judgement. Thus, a declaratory decision may only be made where it is in the public interest. B.6 Interim measures

Where the prerequisites for an order to end an infringement are met (Section 26 of the Cartel Act), the Cartel Court may issue interim measures. B.7 Dealing with issues requiring specific technical knowledge

The Cartel Court may appoint technical experts as expert witnesses. B.8 Average duration of the proceedings

The average duration of proceedings of the Cartel Court is from six months to three years.

5

B.9 Rights of appeal against FCA decisions

Decisions of the Cartel Court can be appealed to the Supreme Cartel Court, which has the power to annul those decisions on points of law. Appeals must be brought within four weeks following delivery or pronouncement of the Cartel’s Court decision (Section 49 para 2 of the Cartel Act). The Supreme Cartel Court shall render a decision within two months following receipt of the Cartel Court files (Section 14 para 2 of the Cartel Act). C. CIVIL LITIGATION

C.1 Differences between general civil litigation and enforcement of competition law rules

There are no differences between general litigation and litigation relating to competition law violations.

Relevant Literature • Ablasser-Neuhuber/Neumayer, “Schutz von Betriebs- uns Geschäftsgeheimnissen

in Kartellsachen (Teil I), ecolex, 2011, 103. • Ablasser-Neuhuber/Neumayer, “Schutz von Betriebs- uns Geschäftsgeheimnissen

in Kartellsachen (Teil II), ecolex, 2011, 222. • Leukauf/Steininger, StGB (3rd edition), para 4 to Section 122. • Lewisch, Wiener Kommentar zum Strafgesetzbuch (2nd edition), para 9 to

Section 122; • Solé, Das Verfagren vor dem Kartellgericht, 2006, 152 et seq. • Thiele , ‘Widerspruchslose Bonitätsdatenbanken – Die Datenschutzjusidkatur des

OGH im Jahr 2010’ in Jahrbuch Datenschutzrecht 2011, page 21. • Thiele in Salzburger Kommentar zum Strafgesetzbuch, para 40 to Section 122. • Thiele in Wiebe/Kodek, UWG, para 34 to Section 11. • Reidlinger/Hartung, Das österreichische Kartellrecht, 257 et seq. • Hoffer, Kartellgesetz – Kommentar, 273 et seq. • Gruber, Österreichisches Kartellrecht, 396 et seq. • Solé in Petsche/Urlesberger/Vartian, Kartellgesetz, 491 et seq. • Mair/Zellhofer, Aktenzugang im Kartellverfahren im Spannungsfeld zwischen

Geheimnisschutz und Private Enforcement, OZK 2008, 99. • Mair/Solé, Kartellverfahren – (halb) neu!, ecolex 2004, 930.

6

BELGIUM



The Act of 15 September 2006 on the protection of economic competition, consolidated on 15 September 2006 (Wet van 15 september 2006 tot bescherming van de economische mededinging, gecoördineerd op 15 september 2006 / Loi du 15 septembre 2006 sur la protection de la concurrence économique coordonnée le 15 septembre 2006 – the “APEC”), and the Royal Decree of 31 October 2006 on the procedures governing the protection of economic competition (Koninklijk besluit van 31 oktober 2006 betreffende de procedures inzake bescherming van de economische mededinging / Arrêté royal du 31 octobre 2006 relatif aux procédures en matière de protection de la concurrence économique – the “Decree”) do not contain any provision specifically referring to trade secrets. In Belgium, specific protection to trade secrets is granted under IP law, unfair competition law and criminal law. Protection for trade secrets and confidential information is, however, legally granted in respect of all contexts and fields of competition law in terms of their protection and in terms of their use, thus including illicit agreements/exchanges of information, abuses of dominant position, etc. This implies that the substantive provisions of APEC relating to illicit agreements (Article 2) and abuses of dominant position (Article 3) do apply in case where the use or refusal to disclose trade secrets result in a restriction of competition. A.2 Definition of trade secrets

The APEC does not provide a definition of either “trade secrets”, “confidentiality” or “confidential information”. Moreover, the legislator has expressly decided to use both terms together in the APEC without distinction. This lack of a uniform terminology is, however, likely to create interpretive difficulties: in this respect, Articles 55, 67 and 68 of the APEC use the term “trade secrets” (zakengeheim/secret d'affaires), whereas Articles 36, 44, 45, 46, 48, 55, 57, 67, 68, 71 and 76 of the APEC use the term “confidential information” (vertrouwelijke gegevens/informations confidentielles). However, the definition of trade secrets in the context of competition law generally acknowledged as the most important in Belgium can be found in case T-353/94 Postbank (judgement of the General Court of 18 September 1996, Postbank v. Commission, § 87), where a trade or business secret is defined as information about an undertaking’s business activity, the disclosure of which could result in a serious harm to the same undertaking. Examples are technical and/or financial information relating to an undertaking's know-how, methods of assessing costs, production secrets and processes, supply sources, quantities produced and sold, market shares, customer and distributor lists, marketing plans, cost and price structure and sales strategy. Moreover, the Belgian Competition Authority (“BCA”) and Belgian courts also take into account the judgement of the General Court in case T-198/03 Bank Austria (judgement of the General Court of 30 May 2006, Bank Austria Creditanstalt AG v. Commission), according to which other types of information are to be considered confidential if: (i) the information is known only to a limited number of persons; (ii) the disclosure of the information is liable to cause serious harm to the person who has provided it or to third parties; and (iii) the interests liable to be harmed by disclosure must, objectively, be worthy of protection.

7

A.3 Applicability of EU competition law principles

Belgian courts and the Belgian Competition Council (“Competition Council”, the body within the BCA that adopts decisions on competition matters) apply the principles elaborated in relation to EU competition law and take into account decisions of the European Commission and case law of European Tribunals. This implies that Belgian courts and the Competition Council will take into consideration and apply the European rules on the transfer of know-how contained in EU Regulation No 772/2004 of 7 April 2004 on the application of Article 81(3) of the Treaty to categories of technology transfer agreements as well as the Commission’s decisions – together with the judgements of EU Tribunals – concerning the applicability of Articles 101 and 102 of the Treaty on the Functioning of the European Union (“TFEU”). Hence, these will definitely impact on the conclusions that the Belgian courts and the Competition Council will draw when assessing agreements or abuses of dominant position concerning trade secrets. A.4 Decisional practice of the Belgian Competition Authority

The Belgium Competition Authority (BCA) has not issued, to our knowledge, any decisions on substance regarding trade secrets. For a summary of the most relevant decisions relating to the protection of trade secrets from disclosure during proceedings, please refer to Section B.4 below. A.5 Civil court judgements

Belgian courts have never dealt with competition law issues involving trade secrets. For a summary of the most relevant judgements relating to the protection of trade secrets from disclosure during proceedings, please refer to Section B.4 below. A.6 Inadequacies and need for a European harmonised and common


The inadequacies of the protection granted by competition law on trade secrets in Belgium are mainly related to the lack of a uniform terminology and definition of “trade secrets”, “confidentiality” and “confidential information”. This may impact on the assessment of different situations and generate interpretative doubts. Further considerations can be made in relation to the protection of trade secrets from disclosure during proceedings (see Section B.4.) In this respect, it should be mentioned the absence of any procedural mechanism whatsoever to preserve the confidential nature of documents and data in the framework of proceedings before the Brussels Court of Appeal, in contrast to the detailed and structured procedure to preserve the confidential nature of documents and data in the framework of proceedings before the competition authority of documents and data collected during an investigation (see Article 44 of the APEC). How to improve the legislative framework with respect to trade secrets concerns a policy decision. Still, there are certain categories of information (e.g., know-how) that deserve additional protection against disclosure for the reason that the value of these categories of information precisely lies in the fact that they are kept confidential. If made public, these categories of information would lose their value, causing (irreparable) prejudice to the owner. Therefore, it should be considered to grant additional legal protection to these categories of information.

8

A European harmonised and common legislation specifically targeted to trade secrets would certainly be feasible and positive, and would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights.

B. POWERS OF THE BCA AND PROTECTION OF TRADE SECRETS IN THE ADMINISTRATIVE PROCEDURE

B.1 Starting of BCA investigations

The BCA can initiate proceedings following a complaint and ex officio. In particular, investigations by the college of anti-competitive practices may start as a result of one of the following acts (Article 44, §1 of the APEC): • Ex officio or upon a request by the Minister of Economic Affairs or following a

complaint lodged by a natural or legal person demonstrating a direct and immediate interest

• Upon a request by the Minister for Small and Medium-Sized Businesses, of an

appropriate public institution or other government body charged with the supervision or control of a particular economic sector in cases of restrictive practices

• Ex officio, upon a request by the Minister of Economic Affairs or the General

Assembly of the Competition Council where there are strong indications of a restrictive practice or in connection with a proposal for a group exemption

• Upon a request by the Brussels Court of Appeal within the framework of a

request for a preliminary ruling B.2 BCA sanctioning powers

Pursuant to Article 63 of the APEC, the Competition Council may impose fines of up to 10% of the total annual turnover upon each of the undertakings and associations of undertakings involved. In addition, the Competition Council may, at the request of the auditor, impose a penalty for non-compliance with its decision of up to 5% of the average daily turnover per day of delay starting from the day determined in the decision. B.3 Powers to carry out inspections

Article 44 and following of the APEC granting the BCA wide investigative powers, so that it can search premises and computer systems and require the alleged infringer to provide information as to the whereabouts of documents and files containing such data. In particular, BCA may collect all information, take written or oral testimonies, obtain all necessary documents or information and make all necessary on-the-spot findings. It may conduct a search at the undertaking’s premises in order to examine the books and other business records and take copies thereof. The following is needed in order to carry out such activities (Article 44, §3 of the APEC): • An order from the president of the Competition Council or a member of the

general Assembly of the Council authorised by the president for that purpose, in

9

case of a dawn raid in the premises, vehicles and other sites of the companies where it is reasonably suspected that documents or information can be found

• An order from an investigating magistrate in case of a dawn raid at the houses of

company managers, directors, and other staff as well as all other internal and external persons charged with the commercial, accounting, administrative, financial and fiscal management of the undertaking

B.4 Rules protecting trade secrets from disclosure in the course of BCA

proceedings

The APEC contains strict rules for preserving the confidential nature of documents and data collected during an investigation. In the framework of proceedings before the Competition Council, the officer or the college make up an inventory of all documents and data collected during the investigation and expresses its views on their confidentiality. The confidentiality of the information and documents will be assessed in relation to any individual or legal entity that becomes aware of the reasoned report. In other words, a certain document may be confidential vis-à-vis one party, while at the same time not confidential vis-à-vis another. The protection of confidential information is, however, not absolute, since even if the parties themselves have indicated that certain documents or data should be considered and treated as confidential, the officer or the college may nevertheless decide that such documents are not confidential (Brussels Court of Appeal, judgement of 25 February 2002, Jaarboek Handelspraktijken & Mededinging). This decision can be appealed before the Competition Council. The decision of the Competition Council cannot be appealed. The hearing before the Competition Services and the College are not public (Article 15 of the Decree). The individuals or legal entities are heard individually or in the presence of other persons called upon. In the latter case, the Competition Services and the College will take into account the legitimate interest of the individuals or legal entities concerned not to disclose their business secrets (Articles 4 and 15 of the Decree). Trade secrets and confidential information will also be suppressed in the public version of the decision. It should be furthermore mentioned that Articles 36, 37 and 38 of the APEC prevents the disclosure of confidential information by individuals within the BCA. As far as confidentiality of information during proceedings before the Brussels Court of Appeal are concerned, a party to a dispute can file a request asking the court to treat certain information it has submitted as confidential. This information will then be suppressed in the public version of the judgement. The court may also exclude the public from the proceedings if the “public access can endanger morals or public order”, but we have no knowledge of any such decision in civil proceedings. Civil courts have dealt with the issue of protection of trade secrets from disclosure within proceedings. In its judgement of 22 January 2008 (Handelspraktijken & Mededinging), the Belgian Supreme Court (Hof van Cassatie/Cour de Cassation) stated that, when there are ongoing antitrust proceedings before the Competition Council, the documents containing trade secrets belonging to the companies involved cannot be disclosed to third parties, even if these third parties intervene in the proceedings. Also, the Competition Council has dealt with the issue at stake. In a decision of 23 April 2001 (VT4 v. VTM), the Competition Council refused to grant the complainant access to a report that was filed as an exhibit to the Competition Council. This decision

10

was motivated by the fact that this report still contained “business secrets” and that the confidentiality of such data had not yet been the subject of debate with the parties involved. This motivation is not directly based on the APEC, but emanates from the discretionary powers of the Competition Council in such matters. B.5 Possibility for the claimant to participate in the proceedings

Claimants, as well as any individual or legal entity representing a public or private interest that might be directly, immediately and presently damaged by the subject matter of the investigation, or by any measures adopted as a result of it, can file a request to participate in the proceedings for the enforcement of Belgian and EU competition law. Third parties admitted to participate in the proceedings have the right to access the documents of the Competition Council’s file, file written submissions, documents, arguments and opinions, as well as further representations, and to participate in hearings. B.6 Interim measures

Pursuant to Article 62, §1 of the APEC, the president of the council or his representative may, under certain conditions, adopt provisional measures in order to suspend restrictive practices which are the subject of an investigation, if it is urgent to avoid a situation that may cause a serious, immediate and irreparable damage to the companies whose interests are affected by such practices or in case the restrictive practices may be harmful to the general economic interest. B.7 Dealing with issues requiring specific technical knowledge

The BCA may appoint experts in cases where technical or financial advice is required. B.8 Average duration of the proceedings

The duration of proceedings before the competition authorities are difficult to assess as they will depend on the circumstances of each particular case, including the complexity of the case, the arguments brought by the parties, the size of the file and the need to translate documentary evidence into the language of the proceedings. B.9 Rights of appeal against BCA decisions

Pursuant to Article 75 of the APEC, the decisions of the Competition Council and the president may be appealed before the Court of Appeal of Brussels. Importantly, the Court of Appeal is not bound by the decisions on access or confidentiality taken at the level of the Competition Council (judgements of the Brussels Court of Appeal of 6 May 2010, Nr. 2003/MR/3, 2009/MR/4, 2009/MR/5, 2009/MR/6, 2009/MR/7, 2009/MR/8, Jaarboek Marktpraktijken). Pursuant to Article 76, § 5 of the APEC, the Court of Appeal must ensure the confidentiality of the file delivered by the Competition Council for the duration of the proceedings before it. However, this provision does not preclude the court from reconsidering the request and allow access to elements of the case as it deems necessary for reasons of efficiency. Nor is the court bound in this respect by any instructions contained in the inventory of the file regarding the possible confidential nature of certain elements of the file.

11

C. CIVIL LITIGATION



Relevant Literature There is no leading literature as such on the protection of trade secrets under competition law in Belgium. The literature available includes publications dealing with competition law in general, some of which deal briefly with the issues of the treatment of confidential information and trade secrets. • VANDERMEERSCH, D., De Mededingingswet, Kluwer, Mechelen, 2007; • L'ECLUSE, P., T'SYEN, K., “De bescherming van zakengeheimen in het Belgisch

en Europees mededingingsrecht: wat geheim is blijft geheim… of toch niet?”, Cah.jur. 2011, afl. 1, 20-30;

• MARCHANDISE, P., “Het Akzo Nobel Chemicals LTD arrest van 14 september

2010: Wat moeten we echt onthouden?”, Cah.jur. 2011, afl. 1, 34-36; • Tijdschrift voor Belgische Mededinging/Revue de la Concurrence Belge, Maklu,

Antwerpen.

12

BULGARIA



The Law on Protection of Competition (“LPC”) does contain provisions specifically referring to trade secrets. Notably, the statute adopts an unusual approach as it brings together under its umbrella the rules on unfair competition and antitrust laws. In this respect, in addition to the general prohibition of unfair competition behaviours, the LPC contains two explicit provisions on protection of trade secrets that respectively prohibit (a) the “acquisition, use or disclosure of manufacturing or trade secrets that is contrary to good faith commercial practices” (Article 37(1)); and (b) the “use or disclosure of manufacturing or trade secrets that were acquired or communicated under the condition not to be used or disclosed” (Article 37(2)). Accordingly, any unauthorised access to or disclosure of information, which has been designated as and disclosed under the condition of being trade secret, if not authorised by the owner of said information, is prohibited by law. With reference to competition law, the LPC does not contain any substantive provision referring to trade secrets. However, provisions in the LPC concerning prohibited agreements/concerted practices (Article 15) and abuse of dominant position (Article 21), will also apply to licensing and disclosure of (or refusal to disclose) trade secrets as long as they restrict competition. Furthermore, similar to other national competition authorities and national courts within the European Union, the Commission on Protection of Competition (“CPC”) and Bulgarian courts are empowered to enforce Article 101 and Article 102 of the Treaty on the Functioning of the European Union (“TFEU”). The decisional practice of the CPC, however, focused on the concept that various “sensitive” data should have been kept confidential, finding that exchange of such information between competitors has resulted in cartels and imposing sanctions on the undertakings concerned. Such decisional practice, however, is not relevant for the purpose of this Study. Finally, the LPC also mentions “trade secret” (together with “production and other protected secrets” that, however, are not defined elsewhere) in regulating the submission of information to the CPC for the purposes of its investigations (Article 55). A.2 Definition of trade secrets

Pursuant to § 9 of the supplementary provisions to the LPC, “a manufacturing or trade secret is any circumstance, information, decision or data related to a business activity, the secrecy whereof serves the interests of the undertakings concerned and necessary measures to this end have been undertaken”. The above statutory definition of “trade secrets” is, however, specifically tailored to the purposes of targeting unfair competition activities. The most significant feature of the above definition is the requirement that measures must be undertaken to preserve the secrecy of information. At the same time, when dealing with antitrust cases, the CPC uses the concept of “sensitive information”. The latter is defined as information which can be used to identify the commercial strategy (future behaviour) of the respective undertaking, on the basis

13

of EU principles and case-law. More clarity was introduced in the end of 2011, when the CPC adopted the Guidelines on the Exchange of Information between Competitors5 (the “Guidelines”) that define “sensitive commercial information” (“strategic data”) as the information about the economic behaviour of undertakings which is usually kept as trade secret and its disclosure or sharing between competitors may lead to reducing the strategic uncertainty in the market. A.3 Applicability of EU general principles

The CPC and Bulgarian courts do take into account the practice and case law of the European Commission (the “Commission”) and Bulgarian competition law is largely modelled and interpreted in accordance with the principles of the EU Competition law. Article 15 and Article 21 of the LPC largely replicate Article 101 and Article 102 of the TFEU in the national setting. Similarly, the Commission’s case law and constant practice together with the judgements of European courts concerning the applicability of Articles 101 and 102 of the TFEU have an impact on the conclusions of the CPC and Bulgarian courts in cases assessing prohibited agreements, cartels and/or abuses of dominance concerning trade secrets. A.4 Decisional practice of the Commission on Protection of Competition

The CPC has not yet handled any case where there has been an issue of trade secrets in relation to an investigation under the competition rules. The only available cases concern exchanges of sensitive information considered as illicit agreement which are, however, not relevant for the purpose of this Study. A.5 Civil court judgements

Taking into account that the texts of decisions of lower courts (regional/district/appellate courts) are rarely published and generally not available through legal information providers in Bulgaria, we are not aware of any Bulgarian civil court judgement which has dealt with competition law issues relating to trade secrets. A.6 Inadequacies and need for a European harmonised and common


The principal function of the LPC is to protect the competition and create conditions for effective economic activities. In this context, trade secrets are of relevance in two ways: (i) when their exercise (or withholding) has anti-competitive effects, or (ii) when confidentiality is breached by undue means. As noted above, both in cases of antitrust enforcement and unfair competition proceedings, the concept of “trade secrets” steps on the concept of “sensitive information”, which originated under EU case law. Unfortunately, the CPC and Bulgarian courts have adopted an overtly broad interpretation of “sensitivity”, expanding the concept to cover almost any information that is related to production volumes, costs and pricing. The 2011 Guidelines seem as an attempt to remedy prior discrepancies, but it remains to be seen how closely they will be followed in the future. Thus, a European legislative initiative would be most welcome as it would certainly facilitate harmonisation among Member States and sound cohesion

5 See § 32, 33 and 34 of the CPC Decision № 1778 of 20 December 2011 adopting a Guidance on Information Exchange between Competitors.

14

with other statutes within each jurisdiction. Furthermore, a European harmonized and common legislation on trade secrets would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights. B. POWERS OF THE CPC AND PROTECTION OF TRADE SECRETS IN THE

ADMINISTRATIVE PROCEDURE

B.1 Starting of CPC investigations

CPC can start investigations: (i) on its own initiative (ex officio); (ii) upon request of a public prosecutor; (iii) upon complaint of persons having legitimate interest in the case; or (iv) on the basis of a leniency application (only for antitrust proceedings). Antitrust proceedings are usually initiated ex officio (e.g., on the basis of information from the media) or on the basis of a signal from another public authority (e.g., notice from the Ministry of Finance on the pricing irregularities in a public tender). Proceedings in unfair competition cases, on the other hand, are normally initiated upon a complaint from an interested party. Any individual or legal entity whose rights and/or legitimate interests have been infringed or jeopardized would have standing to initiate proceedings before the CPC. However, the two parties (complainant and respondent) should be competitors on one and the same relevant market. There is one major difference between antitrust and unfair competition proceedings: if the claimant withdraws its claim, proceedings in the latter case are automatically terminated, while in the former case, the CPC has discretion to continue the investigation should it find reasons to do so. B.2 CPC sanctioning powers

Where the CPC has established that a violation of the provisions of the LPC or Article 101 and/or 102 of the TFEU, it can: (i) impose fines, periodic penalty payments or other sanctions (e.g., periodic

review); (ii) order the undertakings concerned to bring the illegal behaviour to an end, and

where necessary impose any behavioural or structural remedies which are proportionate to the committed violation and are necessary to restore competition; and

(iii) withdraw the benefit of a block exemption. It should be noted that the LPC does not distinguish between sanctions for antitrust and for unfair competition violations. Furthermore, the CPC may impose to undertakings fines for failure to comply in the form of periodic penalty payments of up to 5% of the average daily turnover for each day of delay to comply with, or implement an order or decision of the CPC: (i) For termination of an infringement, including where behavioural or structural

remedies are imposed

15

(ii) For imposition of interim measures (iii) For approval of commitments and remedies Also individuals who have “assisted the commitment of a violation” under the LPC (such as managers, key personnel or employees), where such behaviour does not qualify as a crime, may be sanctioned by personal punitive fines in the range of BGN500–BGN50,000. B.3 Powers to carry out inspections

The CPC has broad investigative powers including, inter alia, conducting site inspections (dawn raids) and collecting evidence, questioning individuals, soliciting expert reports and imposing interim measures where there is a risk of irreparable harm on competition. According to the internal regulations of the authority, dawn raids are used only for the purposes of investigation of antitrust violations. The inspection has to be authorised by a court order of the administrative court in Sofia, on request from the CPC Chairman. During dawn raids, the CPC has the power to: • enter any premises, means of transport and other locations used by the

investigated undertakings or associations of undertakings; • examine all documents and records, related to the activities of the investigated

undertakings or associations of undertakings, irrespective of the medium on which they are stored;

• seize or obtain in paper, digital or electronic medium any copies of or extracts

from documents and records, irrespective of the media on which they are stored or, where this is impossible, seize the originals, as well as any other material evidence;

• seize or obtain electronic, digital and forensic evidence, as well as traffic data,

from all types of computer data media, computer systems and other information media as well as seize the devices for transmission of information;

• receive access to all types of information media, including servers, accessible by

computer systems or other means, located in the inspected premises; • seal for a certain period of time any premises, means of transport and other

locations, used by the inspected undertakings or associations of undertakings, as well as commercial or accounting books or other information media; and

• take oral statements of any representative or member of the management or

staff of the undertakings or associations of undertakings, on circumstances related to the subject matter and purpose of the inspection.

B.4 Rules protecting trade secrets from disclosure in the course of CPC

proceedings

Commercially sensitive information is subject to full disclosure to the CPC. Addressees of a request for information from the CPC cannot call upon protection of business secrets to refuse to provide to the CPC a particular piece of confidential information. The LPC,

16

however, requires CPC officials to protect any information identified by the undertakings concerned as business secrets.

The parties to the proceedings before the CPC have access to all case materials collected, except for those containing “manufacturing, trade or other secrets” of other entities. Each party can ask (indicating the reasons for such a request) the CPC to treat as confidential the material containing trade secrets at the time of making submissions before the CPC. The CPC has the power to evaluate the groundlessness of the confidentiality request. Moreover, the CPC is obliged to follow certain protective measures, including: • Access to materials collected during a CPC investigation that contain trade

secrets should be restricted. • Confidential information should be omitted in the public version of the CPC

decision and replaced by the symbol combination “...”. • Files that are marked as “confidential” should be stored in separate folders. Irrespective of the above, the CPC may disclose trade secret materials provided that they are of critical importance for the proceedings or the right of defence of the other party. This is, however, subject to limitations. The parties to the proceedings may request the disclosure of confidential information provided that this information is of significant importance to their defence before the CPC. If given information represents a crucial source of information for the establishment of malpractice/infringement, the CPC on its own motion may disclose the information. In such cases, the CPC decides on the matter by a reasoned ruling that may be appealed before the Supreme Administrative Court by the undertaking whose confidential information would be disclosed to other parties to the proceedings. Undoubtedly, part of the information collected in the course of the investigation may potentially qualify for protection as a “trade secret”. In this regard, Bulgarian courts have held that if certain information meets the established criteria and should be classified as protected, the CPC has an obligation not to disclose it to third parties.6 However, the courts also state that the CPC cannot use such information to justify a decision for a committed infringement, as far as the denial of access would vitiate the ability of the affected undertaking to express its views as to the accuracy and reliability of the evidence, or to the correctness of the conclusions derived therefrom. In a series of cases from 2011, the SAC confirmed that at least as far as antitrust investigations are concerned, a defendant’s right of access to confidential materials is part of the constitutional right of fair trial, the observance of which is a precondition for the legality of the administrative act, which the CPC will adopt at the end of the administrative proceedings.7 Therefore, the CPC could legitimately refuse to grant the defendant access to information and materials marked as confidential only if such information and materials are not cited in the statement of objections or not used as

6 See Decision № 3243 of 3 April 2003 on case № 1124 of 2003, SAC I Grand Chamber.

7 See Decision № 7116 of 20 May 2011 on case 4516/2011, SAC IV Chamber, p. 7, as well as Decision № 14038 of 1 November 2011 on case 10587, SAC I Grand Chamber, p. 10.

17

evidence that substantiate an allegation for the commission of an antitrust violation, and/or may not be otherwise used by the defendant in order to prepare and present its defence.

B.5 Possibility for the claimant to participate in the proceedings

The claimant may, and in practice is obliged to, participate in the proceedings before the CPC. Often, submissions from the claimant are among the most important evidence in the investigation, especially in proceedings on alleged unfair competition violations. Both in antitrust and unfair competition investigations, the CPC holds a public hearing to which all parties are summoned in accordance with the standard civil procedure rules. The parties are also provided with an opportunity to get acquainted with the materials collected on the case before the hearing, and may submit additional comments or evidence during the hearing. B.6 Interim measures

During the course of an investigation, in cases of urgency due to the risk of serious and irreparable harm to competition, the CPC, acting on its own initiative or upon the request of any party whose interests are harmed or threatened by an alleged infringement, may order by a reasoned ruling immediate termination of the respective practice or impose interim measures. Interim measures may be imposed at any moment during a pending investigation by a ruling, in which the CPC should specify the type, scope and exact purposes of the relevant measure, which may not last for a period longer than three months. However, this term may be renewed when necessary and prolonged until the issuance of the final CPC decision on the merits. B.7 Dealing with issues requiring specific technical knowledge

The CPC can appoint experts, as long as they are independent, i.e., have not vested interest in the outcome of the proceedings. Once they complete their expert assignment, a report should be presented to the CPC for approval and the undertakings concerned should be able to challenge the conclusions therein. In practice, however, the CPC almost never resorts to outside experts, even when specialist knowledge is required. B.8 Average duration of the proceedings

The LPC does not envisage specific deadlines for completion of proceedings and issuance of decisions in cases of antitrust investigations. The duration of the proceedings before the CPC will mostly depend on the complexity of each particular case. B.9 Rights of appeal against CPC Council decisions

Decisions of the CPC are subject to judicial review and can be challenged by any party having legitimate interest before the Supreme Administrative Court. Appeals should be lodged within 14 days, effective from serving the notification of the decision to the undertaking concerned. Third parties (other than the parties to the proceedings) may appeal within 14 days effective from the publication of the decision in the electronic register of the CPC.

18

The procedure for judicial review follows the Code on Administrative Procedure, which is supplemented by the Code on Civil Procedure. The SAC reviews the appeal in a panel of three justices (a "Chamber"). The decision of a Chamber is subject to further appealed on points of law before a SAC panel of five justices (a "Grand Chamber"). The decision of the Grand Chamber is final and is not subject to further appeal.

C. CIVIL LITIGATION


Claims for damages due to injury resulting from an action in violation of the LPC (or TFEU provisions) follow the standard procedures for civil action in tort. However, a claimant can be only a competitor of the alleged tortfeasor - a company (or a sole trader) that has been active during the relevant period on the same geographic and product market. Because of the significant evidentiary burden that has to be satisfied, the civil action procedure is rarely used. This is also valid notwithstanding, as of 2008, the LPC was modified to the effect that a final and binding decision on an administrative case under the LPC shall be considered by the civil courts as conclusive evidence that the administrative violation, condemned therein, has been committed.

Relevant Literature • GRADINAROV, P., “Refusal to Supply a Competitor as a Form of Abuse of

Dominance” in Commercial and Competition Law 1: 49 - 59 (2010) - some comments on the refusal to provide access to trade secrets as a form of abuse of dominance;

• GYUROV, I., “Undertakings with Special or Monopoly Rights and Competition

Law” in Market and Law 12: 41 - 55 (1999) - some comments on the refusal to provide access to trade secrets as a form of abuse of dominance;

• NIKOLOV, P., et al. “The New Legal Framework for Protection of Competition”.

(Trud i pravo Publishing House, Sofia, 2009) - commentary on the LPC, including sections on “sensitive commercial information” and “trade secrets” within unfair competition violations;

• PAPAZOVA, M., “Exchange of Information Between Competitors: Problem and

Acceptable Limits” in Commercial and Competition Law 6: 57 - 65 (2009) - an”.

19

CYPRUS



Cyprus competition law only provides for specific measures aimed at protecting business secrets and confidential information in the course of proceedings. In this respect, please refer to Section B.4. below. In relation to substantive competition law provisions, even though the Protection of Competition Law 2008 (Law 13(I) of 2008) contains provisions prohibiting agreements restricting competition (Section 3(1)) and abuses of dominant position (Section 6), such provisions are not specifically referring to trade secrets, and such provision may be possibly relevant in relation to trade secrets only in very exceptional circumstances, i.e., in cases where a restriction of competition is ascertained. In this respect, it should be stressed that the decisional practice of the Commission for the Protection of Competition (CPC) in Cyprus evidences the absence of decisions involving trade secrets. A.2 Definition of trade secrets

In the legislation enforced by the CPC, there is no definition of trade secrets nor of business secrets and/or confidential information. However, in the context of protecting business secrets and confidential information in the course of proceedings, the CPC upholds the definition of trade secrets and confidential information in paragraphs 17, 18, 19 and 20 of the Announcement of the EC Commission regarding access to the Case File of the Commission in the context of Articles 81 and 82 of the EC Treaty and the EC Reg. 139/2004 of the EC Council. A.3 Applicability of EU competition law principles

The CPC and the courts in Cyprus take into consideration the decisions of the European Commission and competition law in Cyprus is interpreted in accordance with the principles of the European Community competition law. As an example, it should be noted that the Protection of Competition Law 2008 incorporates into national law “the act of the European Union with the title Council Regulation (EC) No. 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the [EC] Treaty as last amended by Council Regulation (EC) No. 1419/2006 of 25 September 2006 and as further from time to time amended or substituted...” A.4 Decisional practice of the Commission for the Protection of Competition

No decisions of the CPC involving trade secrets have been retrieved. A.5 Civil court judgements

No court cases on Cyprus competition law involving trade secrets have been retrieved. A.6 Inadequacies and need for a European harmonized and common

legislation specifically targeted to trade secrets?

The lack of any decisional practice suggests that competition law is not perceived as a relevant tool in relation to trade secrets protection. In any event, the main inadequacy of the applicability of competition law to trade secrets in Cyprus is the lack of any

20

specific definition of trade secrets and/or confidential information in Cyprus’ competition law. In this respect, a European harmonised and common legislation specifically targeted to trade secrets may provide some clarity, and would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights. B. POWERS OF THE CPC AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of CPC investigations

The CPC can initiate proceedings ex officio or following a complaint. B.2 CPC sanctioning powers

Pursuant to Sections 24 and 25 of Law No. 13(I)/2008, for every infringement of Section 3 and/or Section 6 (restrictive agreement/abuse of dominant position), and for every violation of Articles 101 and/or 102 of the TFEU, the CPC may: (i) impose administrative fines not exceeding 10% of the total turnover of the

undertaking; (ii) force the undertakings involved to bring the infringement to an end; and (iii) impose any terms and measures, whether behavioural and/or corrective,

depending on the infringement ascertained, which are necessary to bring said infringement to an end.

Furthermore, pursuant to Sections 36 and 37 of Law No. 13(I)/2008, any person who omits to comply with or acts in contravention to any decision issued pursuant to Sections 24, 25 and 28 (the latter referring to interim measures), shall commit a criminal offence punishable with a sentence of imprisonment not exceeding two years or with a fine not exceeding EUR340 or with both such penalties. B.3 Powers to carry out inspections

The CPC has powers to search premises and computer systems and to require the infringer to provide information as to the location of documents and files containing such data. Specifically, the CPC – on the basis of Section 30 of Law No. 13(I)/2008 – has the authority to gather all information that is necessary for the exercise of its competences, powers and functions and also on behalf of all competition authorities of other EU Member States by addressing for this purpose a written request to the undertakings or association of undertakings or natural or legal persons. B.4 Rules protecting trade secrets from disclosure in the course of CPC

proceedings

The Chairman, the members and the deputy members of the CPC, as well as the persons working at the CPC and other public servants that handle any documents dealing with business secrets and/or confidential information in the course of their official positions or in the context of their official duties are under a duty to ensure confidentiality and they are prohibited from communicating or publishing such information except where it is necessary to:

21

(a) prove infringement of Sections 3 and/or 6 of Law No. 13(I)/2008 and/or Articles 101 and 102 of the TFEU; and/or

(b) for the general application of the provisions of Law No. 13(I)/2008. Any other legal or natural person that comes across such information for the purposes of the application of Law No. 13(I)/2008 has the same obligation. Infringement of this obligation constitutes a disciplinary offence punishable by up to one-year imprisonment or a fine up to EUR3,500. Furthermore, it should be mentioned that once the CPC has decided on a prima facie case for an infringement, it has to communicate to the undertakings or association of undertakings against whom there is a complaint or an ex officio investigation, those documents within the file that the CPC intends to base its decision on, without however disclosing business secrets and confidential information. B.5 Possibility for the claimant to participate in the proceedings

The claimant can participate in the proceedings under Section 17(4)(a)(i) of Law N. 13(I)/2008 and under Section 24 of the Control of Concentrations Between Undertakings Laws 1999-20008. The claimant may be a legal or a natural entity having a legitimate interest, i.e., it has suffered – or there is a serious or possible risk of suffering – a substantial financial injury or it will be placed at a disadvantageous position regarding competition as a direct result of the infringement. B.6 Interim measures

The CPC may, pursuant to Section 28 of Law N. 13(I)/2008, order the taking of interim measures. Such measures must be temporary and conservative in nature, and their extent must not exceed what is absolutely necessary under the circumstances. Furthermore, interim measures may be adopted only where a reasonably strong prima facie case of infringement of Sections 3 and/or Section 6 of Law N. 13(I)/2008 is set, it is an emergency case and there is a serious risk of an irreparable damage to the interests of the person making the application or to the public interest. B.7 Dealing with issues requiring specific technical knowledge

Technical experts are involved by the CPC whenever this is considered as necessary. B.8 Average duration of the proceedings

The duration and cost of proceedings from initiating the claim to final decision vary from case to case depending on the overall complexity of the case, the number of documents, number of witnesses involved and various other factors. B.9 Rights of appeal against CPC decisions

Decisions of the CPC can be appealed before the Supreme Court. Under Article 146 of the Constitution of the Republic of Cyprus, a person having a legitimate interest may file an appeal against a decision of the CPC within a period of 75 days from the notification of the decision or from its publication

8 Law 22(I) of 1999, Law(I) 107(I) of 1999, and Law 154(I) of 2000

22

C. CIVIL LITIGATION


There are no significant differences between general litigation and litigation relating to competition law violations in Cyprus.

Relevant Literature

No relevant literature has been identified.

23

CZECH REPUBLIC



Czech Law No. 143/2001 (“Competition Act”) does not contain any provision specifically referring to trade secrets. In the Czech Republic, specific protection to trade secrets is granted under IP law, unfair competition law and criminal law. However, the general provisions contained in the Competition Act and relating to illicit agreements/concerted practices (Article 3 of the Competition Act) and abuses of dominant position (Article 11 of the Competition Act) may apply also to situations relating to the licensing, disclosure of (or refusal to disclose) trade secrets. Furthermore, as with other national competition authorities and national courts within the European Union, the Czech Competition Authority (“CCA”) and the Czech courts have the power to enforce Article 101 and Article 102 of the Treaty on the Functioning of the European Union (“TFEU”). In this respect, Czech competition law – likewise EU competition law – may impact on trade secrets, but only in circumstances where the use of (or refusal to transfer) trade secrets have an impact on competition, which is the final object of competition law protection. A.2 Definition of trade secrets

The Competition Act does not contain a definition of trade secrets. The general definition of trade secrets is included in Article 17 of the Commercial Code which provides that: “Trade secrets include commercial, manufacturing or technological facts relating to the enterprise which have actual or at least potential material or nonmaterial value, are not commonly available in the business circles in question, and are to be kept confidential at the discretion of the entrepreneur, who ensures that his enterprise's secrets are protected in a suitable manner”. A.3 Applicability of EU competition law principles

The CCA and Czech courts do take into account the decisional practice of the European Commission (“Commission”), and Czech competition law shall be interpreted in accordance with the principles of the European Community competition law. This implies that in relation to the applicability of Article 3 of the Competition Act and Article 101 of the TFEU, the CCA does apply in reviewing agreements involving the transfer of know-how the EU Transfer of Technology Block Exemption Regulation (“TTBER”). Similarly, the Commission’s decisions – together with the judgements of EU Tribunals – concerning the applicability of Articles 101 and 102 of the TFEU will impact on the conclusions that the CCA and Czech courts will draw when assessing agreements or abuses of dominant position. A.4 Decisional practice of the Czech Competition Authority

The CCA has not adopted any decision relating to the issue of whether the disclosure/non-disclosure of trade secrets constitutes anticompetitive behaviour.

24

Similarly, the CCA has not adopted any decision applying the essential facility doctrine in relation to intellectual property, trade secrets or know-how, and ordering a dominant undertaking to disclose certain information. Furthermore, no decision identifies as abusive a situation where a dominant undertaking has obtained from its weaker contractual counterparties information or know-how that may qualify as trade secrets. The CCA has also never adopted any decision considering as illicit vertical agreements involving the transfer of know-how. In any event, in reviewing these transactions, the CCA will follow the TTBER. This being said, the CCA has issued a number of decisions where it fined undertakings for exchange of information which is “sensitive” or “not publicly available”, but such decisions are outside the scope of this Study. A.5 Civil court judgements

The Czech civil courts have never dealt with competition law issues involving trade secrets. A.6 Inadequacies and need for a European harmonised and common


Impacts of competition law on trade secrets could very rarely apply. However, a European harmonized and common legislation on trade secrets would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights. B. POWERS OF THE CCA AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of CCA investigations

The CCA can start investigations for suspected breach of Czech or EU competition law on its own initiative and upon a complaint by any interested third party, including consumer or trade associations, administrative authorities, competitors, customers, or individuals, e.g., former employees. An investigation can also stem from a leniency application submitted by an undertaking involved in a restrictive agreement/concerted practice - not applicable in abuse of dominance cases and vertical agreements in restraint of competition. B.2 CCA sanctioning powers

If the CCA, as a result of an investigation, finds a breach of Czech or EU competition law it will order the unlawful conduct(s) to be brought to an end (if still ongoing) and, in cases of serious breaches, having regard of the gravity and duration of the infringement(s), may impose administrative fines of up to 10% of the turnover of the undertaking involved. Alternatively, the CCA can accept and render binding commitments submitted by the party(ies). Individuals are liable under Czech criminal law for the breach of competition law by conclusion of hard-core horizontal cartel agreements. B.3 Powers to carry out inspections

25

Within the context of competition law investigations, the CCA has the power to: (a) carry out on-the-spot investigations at the business premises of the undertaking.

During raids, the CCA has the power to access/search all premises of the undertaking (including vehicles used by employees, but not private homes and private vehicles), and can copy any business documents which are located in the business premises, in whatever format, held by the undertaking. The CCA can further seal business premises, or cases and boxes or business documents therein located. For dawn raids to be carried out, a formal authorisation decision by the CCA is required;

(b) request oral clarifications on the subject matter of the investigation during the raids from employees or persons in a similar relationship to the undertaking; and

(c) request information and business documents relevant to the case of the undertaking.

B.4 Rules protecting trade secrets from disclosure in the course of CCA

proceedings

Employees and persons in a similar relationship to the CCA are obliged not to disclose trade secrets and confidential information they have become aware of during the course of their employment; this obligation continues after termination of the relationship. Parts of the administrative file, including trade secrets, are excluded from the access to the administrative file. The administrative file must include, besides documents including trade secrets, documents from which trade secrets were removed or sufficiently detailed extract which does not include trade secrets. Furthermore, when during an oral hearing trade secrets of participants may be disclosed, the CCA will exclude from such hearing parties which do not have a right to access them. B.5 Possibility for the claimant to participate in the proceedings

Only addressees of the CCA decision participate in proceedings. B.6 Interim measures

The CCA may issue interim measures if it is necessary to temporarily regulate the relationship between the parties or if enforcement at a later point would be jeopardised. The CCA may order the undertaking or a third party to implement, omit or sustain certain acts or to secure what may be used as evidence or may be subject of enforcement. B.7 Dealing with issues requiring specific technical knowledge

The CCA may request information from technical experts, in case of need. B.8 Average duration of the proceedings

The average duration of CCA proceedings is approximately 24 months.

26

B.9 Rights of appeal against CCA decisions

Decisions of the CCA can be appealed to the regional administrative court in Brno, which has the power to annul such decisions on points of law. Appeals must be notified to the CCA within two months from the time the appealing party was notified of the CCA's decision. The filing of an appeal with the regional court in Brno does not per se suspend the enforceability of the decision, although the appellant can file a petition for its interim suspension. The decision of the regional court in Brno can be appealed to the Supreme Administrative Court within two weeks from the date on which the appealing party was notified of the decision of the regional court in Brno. C. CIVIL LITIGATION



Relevant Literature

• J. Jakoubek. Competition Law Aspects of Industrial Right in the EU. PF UK, 2005 = J. Jakoubek. Soutěžněprávní aspekty průmyslových práv v EU. PF UK, 2005.

• P. Kolman. “European competition law and intellectual property rights”, Právní

rozhledy, schedule Evropské právo, Issue 8, p. 1, 2002 = P. Kolman. “Evropské soutěžní právo a práva duševního vlastnictví”, Právní rozhledy, příloha Evropské právo, Issue 8, p. 1, 2002.

• J. Malý. Trade with intangible goods. Patents, inventions, know-how, trademarks.

C. H. Beck, 2002 = J. Malý. Obchod nehmotnými statky. Patenty, vynálezy, know-how, ochranné známky. C. H. Beck, 2002.

• J. Munková, P. Svoboda, J. Kindl. Competition Law. C.H. Beck, 2006 = J.

Munková, P. Svoboda, J. Kindl. Soutěžní právo. C.H. Beck, 2006. • Petr Michal. Prohibited agreements and abuse of dominant position in the Czech

Republic. C.H.Beck, 2010 = Petr Michal. Zakázané dohody a zneužívání dominantního postavení v ČR. C.H.Beck, 2010.

• J. Pilař. Licensing in European law with regard to competition law aspects. PF UK,

2004 = J. Pilař. Licencování v evropském právu s ohledem na soutěžní aspekty. PF UK, 2004.

• R. Polčák, “Abuse of dominant position in IT – case Microsoft”, Jurisprudence,

Issue 4, 2005 = R. Polčák, “Ke zneužití dominantního postavení v informačních sítích – případ Microsoft”, Jurisprudence, číslo 4, 2005.

• J. Skuhravý, “Intellectual Property Rights and Essential Medicines”, Common Law

Review 3/5, Praha, 2003.

27

• P. Svoboda, “Parallel exports”, Právní rádce, Issue 3, p. 10, 2000 = P. Svoboda, “Paralelní dovozy”, Právní rádce, číslo 3, p. 10, 2000.

• P. Svoboda. Influence of copyright territoriality on development of European law.

Karolinum, 2001 = P. Svoboda. Vliv autorskoprávní teritoriality na rozvoj evropského práva. Karolinum, 2001.

• P. Utěšený, “Abuse of dominant position by intellectual property holder in

European case-law”, Soudní rozhledy, Issue 8, 2001 = P. Utěšený, “Zneužití dominantního postavení nositelem práv duševního vlastnictví v současné komunitární judikatuře”, Soudní rozhledy, číslo 8, 2001.

• P. Utěšený. Market power and intellectual property in European competition law.

C.H.Beck, 2003 = P. Utěšený. Tržní moc a duševní vlastnictví v evropském soutěžním právu. C.H.Beck, 2003.

28

DENMARK



The Danish antitrust rules (i.e., the Consolidated Act No. 1027 of 21 August 2007, “Danish Competition Act”) do not provide any specific provisions relating to trade secrets. However, the way trade secrets are exploited may violate Section 6 of the Danish Competition Act, which prohibits agreements that have restriction of competition as their direct object or consequence (and which corresponds to Article 101 of the Treaty on the Functioning of the European Union, “TFEU”). Also, the use of trade secrets may be contrary to Section 11 of the Danish Competition Act, prohibiting any abuse by one or more undertakings of a dominant position (and which corresponds to Article 102 of the Treaty on the Functioning of the European Union, “TFEU”). It should be, however, stressed, that the above provisions are not aimed at protecting trade secrets, but rather at protecting competition. Articles 101 and 102 of the TFEU may be applied by the Competition Council if the relative cases have ties in Denmark. A.2 Definition of trade secrets

The law in Denmark does not provide a definition of trade secrets as such. For the general definition developed by case law (not, however, relating to competition law), please refer to the Commercial and IP Chapter. A.3 Applicability of EU competition law principles

The decisional practice of the European Commission is taken into account in Denmark, and Danish competition law shall be interpreted in accordance with the principles of the European Community competition law. A.4 Decisional practice of the Competition Council

There is no known decision regarding competition law involving misuse of trade secrets. A.5 Civil court judgements

Even though there have been several judgements regarding misuse of trade secrets, there is no known judgements regarding competition law involving misuse of trade secrets. A.6 Inadequacies and need for a European harmonised and common


Not applicable B. POWERS OF THE COMPETITION COUNCIL AND PROTECTION OF TRADE

SECRETS IN THE ADMINISTRATIVE PROCEDURE

B.1 Starting of Competition Council investigations

The Competition Council may initiate proceedings ex officio. It may consider complaint, deciding whether there are sufficient grounds to initiate an investigation.

29

B.2 Competition Council sanctioning powers

The Competition Council may issue orders to bring infringements of Section 6 and/or Section 11 to an end and may order remedies made by undertakings to accommodate competition concerns to be binding on such undertakings. Also, if a more severe punishment is not applicable under other legislation (criminal liability may be imposed under the provisions of Part 5 of the Criminal Code), it is possible to issue fines, according to Section 23. B.3 Powers to carry out inspections

Pursuant to Section 18 of the Danish Competition Act, the Danish Competition and Consumer Agency, for the use of the Competition Council activities, may search the premises, including computer systems, of undertakings suspected of infringing the Danish Competition Act (i.e., in the event of antitrust violations). The Danish Competition and Consumer Agency must secure a court order before carrying out a dawn raid. B.4 Rules protecting trade secrets from disclosure in the course of

Competition Council proceedings

Pursuant to Section 13 of the Danish Competition Act, the Competition Council, when publishing information (in its decisions, orders, etc.), shall not include information on technical matters, including information on research, production methods, products and operating and business secrets, where such information is of substantial financial importance to the person or undertaking concerned. B.5 Possibility for the claimant to participate in the proceedings

Not applicable B.6 Interim measures

Not applicable B.7 Dealing with issues requiring specific technical knowledge

Not applicable B.8 Average duration of the proceedings

Not applicable B.9 Rights of appeal against Competition Council decisions

The decisions of the Competition Council can be appealed to the Competition Appeals Tribunal. The decisions from the Competition Appeals Tribunal may be brought before the civil courts within four weeks after the decision has been communicated to the party concerned.

30

C. CIVIL LITIGATION


There are no specific differences between general litigation and litigation relating to competition law violations. Both types of litigation are heard by the same court and are governed by the same procedural rules.

Relevant Literature

Not available

31

ESTONIA



The Estonian Competition Act does not contain any substantive provisions targeted to violations concerning trade secrets. The more specific protection to trade secrets is granted under IP law, unfair competition law (which is also regulated by the Estonian Competition Act) and criminal law. However, the Estonian competition law can have an impact on trade secrets under Articles 4 and 16 of the Estonian Competition Act. Namely, Article 4 regulates prohibited agreements and Article 16 regulates the abuse of dominant position. Most probably, competition law can have an impact on trade secrets under Article 4, subsection 4, in regard of exchange of prohibited information. The interpretation of the named subsection of Article 4 does relate to trade secrets as information which competitors should not exchange. Also, as long as the involvement of a trade secret in any prohibited agreement, concerted practice, or decision of a trade association or abuse of dominant position involves infringement of competition law, then such involvement is covered by the Estonian competition law regulation. A.2 Definition of trade secrets

Article 63 of the Estonian Competition Act does state in regard of certain data to be published by the Estonian Competition Authority (the “ECA”) in its decisions that information concerning the business activities of an undertaking, the communication of which to other persons is likely to harm the interests of such undertaking, above all, technical and financial information relating to know-how, information concerning the methodology of validation of expenditure, production secrets and processes, sources of supply, volumes of purchase and sales, market shares, clients and distributors, marketing plans, expenditure and price structures and sales strategy are deemed to be business secrets and not to be disclosed to the public. Information subject to disclosure or disclosed to the public is not deemed business secrets. A.3 Applicability of EU competition law principles

Both the Estonian Competition Authority and the Estonian courts take into account the practice of the European Commission and the European Court of Justice in their decisions. Also, both the ECA and the courts interpret Estonian competition law in the light of the TFEU and relevant European Commission guidelines. A.4 Decisional practice of the Estonian Competition Authority

There is no decision of the ECA which specifically relates to competition law violations involving trade secrets. A.5 Civil court judgements

There is no court case law which specifically relates to competition law violations involving trade secrets.

32

A.6 Inadequacies and need for a European harmonised and common legislation specifically targeted to trade secrets

The main inadequacy derives from the vagueness of Estonian legislation in general on the term and definition of a “trade secret” or “business secret”. The content of the concept is currently depending on each market player interpretation and there is no real guidance to rely upon when assessing and referring to certain facts or documents as trade secrets. Even more, most often the terms “trade secret”, “business secret” and “confidential information” are used interchangeably in legislation and in the (very limited) court/ECA practice. In this respect, a European harmonised legislation targeted to trade secrets would avoid different interpretations of the notion and ensure consistency and would furthermore avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights. B. POWERS OF THE ECA AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of ECA investigations

In general, the ECA commences proceedings based on a complaint or by a leniency application. However, the Estonian Competition Act also permits the ECA to start an investigation at its own initiative. B.2 ECA sanctioning powers

If the ECA concludes at the end of its investigation that a competition law infringement has taken place, then it has the right to issue an injunction to the breaching party. However, in Estonia, cartel proceedings are handled under criminal law and thus in case the ECA commences an administrative proceeding upon a complaint and finds traits of infringement of Article 4 of the Estonian Competition Act, then the criminal proceedings are commenced in co-operation with the prosecutor. In case a leniency application is filed with the ECA, then the investigation shall be automatically based on criminal law. In case of infringement of competition law in regard of abuse of dominant position, the ECA may fine the company with a pecuniary penalty of up to EUR32,000 and the physical person with a pecuniary penalty or detention. With regard to cartels, the company shall be subject to a pecuniary punishment up to 5%-10% of its annual group turnover but not more than EUR16,000,000, and the physical person may be fined by a pecuniary punishment or imprisoned for up to three years. B.3 Powers to carry out inspections

Officials or ECA’s representatives, authorised by a decision of the director-general of the ECA, have the right, without prior warning or special permission, to inspect the seat and place of business of an undertaking, including the enterprises, territory, buildings, rooms and means of transport of the undertaking. The person conducting such inspection must present to the undertaking or its representative the decision issued by the director-general of the ECA authorising the inspection. The ECA has the right to:

33

• examine documents relating to the activities of the undertaking and all the relevant materials and to obtain copies or transcripts;

• immediately examine data or databases kept in electronic form on computer and to make printouts and electronic copies; and

• request the undertaking to submit explanations.

At the end of the inspection, the person conducting the same is required to draft a report of the results which shall be signed by the inspector and by the representative of the undertaking. B.4 Rules protecting trade secrets from disclosure in the course of ECA

proceedings

The ECA shall not communicate to other persons, publish without the undertaking’s consent, or in any manner disclose to the public business secrets acquired in performance of its duties. Undertakings shall determine and indicate any such information which they consider to constitute a business secret. If the ECA so requests, undertakings are required to provide reasons for classifying information as a business secret. The ECA may request the undertakings to provide an unofficial version – of the complaint or of any other document – not containing business secrets, so that such version can be accessed by the public. The ECA may disclose and use a business secret of an undertaking if this is necessary for establishing an offence related to competition law or to the TFEU and may also exchange business secrets of an undertaking in co-operation with other EU Member States’ Competition Authorities and the European Commission with regard to application of the TFEU articles. B.5 Possibility for the claimant to participate in the proceedings

Claimants can participate in the proceedings, and they are encouraged to do so. B.6 Interim measures

The ECA has the right to issue an injunction obliging the addressee to refrain from a prohibited act, terminate or suspend activities which restrict competition, or restore the situation prior to the offence. In case of failure to comply with the injunction, the ECA may impose a penalty payment of up to EUR3,200 on natural persons and up to EUR6,400 on legal persons. B.7 Dealing with issues requiring specific technical knowledge

If needed, the ECA may involve technical experts in the proceedings. B.8 Average duration of the proceedings

It is very difficult to estimate the average duration of the proceedings by the ECA since it can vary from a couple of months to a couple of years. In general, more complex cases involving several parties and vast amounts of documents shall take over a year.

34

B.9 Rights of appeal against ECA decisions

The decisions of the ECA can be appealed to the administrative courts. The administrative court’s decision can be appealed to the Circuit Court, and the Circuit Court’s decision can be appealed to the Supreme Court. C. CIVIL LITIGATION


Estonian competition law infringements are handled under criminal law, except for “first time” abuse of dominant position. Civil litigation in Estonia with regard to competition law infringements is only relevant in case a third party who has suffered damages due to a competition law infringement applies for compensation through civil courts.

Relevant Literature • Konkurenstiseaduse kommentaarid, issued by the ECA in co-operation with

Tallinn Technical University Department of Economics, 2003 • Eveli Ojamäe: “Saladuse hoidmise kohustus ja konkurentsipiirang uues

töölepingu seaduses”, Juridica 2009, No 4, pp. 236-243. Discussion on the new Estonian Employment Act

• Mario Rosentau: “Intellektuaalse omandi õigused infotehnoloogia valdkonnas.

Infotehnoloogilise loomingu olemus”, Juridica 2008, No 3, pp. 171-183. Discussion on information technology and intellectual property rights, including computer programs and databases as trade secrets

• Eveli Ojamäe: “Töötaja vastutus konkurentsikeelu ja konfidentsiaalsuskohustuse

rikkumise eest”, Juridica 2006, No 3, pp. 199-209. Discussion on the criminal liability of an employee for misuse of trade secret

• Eveli Ojamäe: “Konfidentsiaalse teabe määratlemine töösuhtes”, Juridica 2005, No 10, pp. 719-730

• “Äripäeva Ettevõtja Käsiraamat” – a collection of different legal aspects necessary

for operating a company, published by an Estonian daily economic newspaper Äripäev

35

FINLAND



The Finnish Competition Act (948/2011) does not contain provisions specifically referring to the protection of trade secrets. However, the provisions concerning prohibited agreements and arrangements having as their object or effect the prevention, restriction or distortion of competition (Section 5 of the Competition Act), may also apply to situations relating to the disclosure of trade secrets. It should be mentioned that the existence of certain communication between market participants may be recognised as concerted practices and, therefore, may invoke the legal consequences of referred provisions of the Competition Act. Furthermore, trade secret-related issues can also surface with regard to abuse of dominant position, which are prohibited by Section 7 of the Competition Act. A.2 Definition of trade secrets

The Finnish Competition Act does not define the notion of trade secrets, and there is no general definition of trade secrets to which the Finnish Competition Authority (the “FCA”) and/or national courts refer to when dealing with competition law. A.3 Applicability of EU competition law principles

The principles of EU competition law are applicable in Finland. The courts and the FCA do take into account the decisions of the European Commission and the case law of European Tribunals. A.4 Decisional practice of the Finnish Competition Authority

There is no decision of the FCA which specifically relates to violation of competition law concerning trade secrets. A.5 Civil court judgements

There is no court case law which specifically relates to violation of competition law concerning trade secrets. A.6 Inadequacies and need for a European harmonized and common


The applicability of competition law to trade secrets is an issue that has not received very much attention in Finland. Due to lack of case law and limited amount of attention to the subject in general in the field of competition law, it is difficult to comment on the inadequacies of such applicability. However, it is possible to state that a European harmonized and common legislation on trade secrets would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights.

36

B. POWERS OF THE FCA AND PROTECTION OF TRADE SECRETS IN THE ADMINISTRATIVE PROCEDURE


The FCA can commence investigations on the initiative of a third party, upon a leniency application of a party to a cartel, and on its own initiative - ex officio. The third-party initiatives are not formal complaints, but a simple request for action. B.2 FCA sanctioning powers

The FCA does not have the authority to impose sanctions on parties involved in a competition infringement. The sanctions are imposed by the Finnish Market Court, which investigates the claimed competition infringement, following a proposal by the FCA. The Market Court acts on the basis of the FCA’s proposal. However, the amounts of fines proposed by the FCA in case of competition infringements are not binding for the Finnish Market Court. B.3 Powers to carry out inspections

The FCA has the power to search the premises, land and vehicles of an undertaking that has allegedly infringed competition law. The dawn raids include the search, and - if needed - the seizure of relevant documents and other data, including data on computers. Only attorney/client–privileged material will not be seized. The dawn raids do not require particular decisions or approvals from other supervisory bodies other than the FCA. The FCA also has the possibility to conduct investigations in premises other than the business premises of the undertaking (such as domicile of a manager). However, in order to carry out such inspections, the FCA has to obtain a specific permission from the Finnish Market Court. These investigations are made only in exceptional circumstances, e.g., when there is reasonable doubt that some essential information concerning the competition infringement has been transferred from the business premises of the undertaking to other premises. The investigators may demand the personnel to clarify some facts and information, and record the given answers. The investigators also have the authority to seal premises and information for the duration of the investigation. B.4 Rules protecting trade secrets from disclosure in the course of FCA

proceedings

The FCA and the Finnish Market Court take the confidentiality of trade secrets into account during their investigations/proceedings. The FCA’s investigation is mainly based on written material, interviews and negotiations. No trade secrets are disclosed to the other parties during the investigation and the FCA publishes its decision online, in a version that omits all trade secrets. The Finnish Market Court proceedings are mainly held in written form and the non-exposure of trade secrets are taken into account in the proceedings. The parties shall separately indicate business secrets in the investigation material if the material is self-delivered.

37


The parties to a case handled before the FCA and/or the Market Court have the right to be heard either orally or in writing. B.6 Interim measures

The FCA may impose interim measures aimed at temporarily forbidding an infringing conduct and/or obligating the infringing parties to carry out certain activities during the investigation. The parties have the right to be heard before an interim measure is ordered by the FCA. B.7 Dealing with issues requiring specific technical knowledge

The investigators of the FCA and the judges of the Finnish Market Court are traditionally lawyers, economists, or their equivalent. Nonetheless, during the FCA investigation or court proceedings, the authorities can ask for the assistance of all the needed external technical advisors and use the knowledge of the parties in order to understand the technical details of the case. B.8 Average duration of the proceedings

The duration of competition infringement investigations before the FCA may vary from few months to few years, depending on the specific features of the case. B.9 Rights of appeal against FCA decisions

If the FCA finds that a competition infringement has taken place and makes a proposal to the Finnish Market Court, the case will be further investigated by the latter. In its investigation, the Finnish Market Court will re-evaluate the infringement and may apply fines. Both the FCA’s infringement and non-infringement decisions may be appealed to the Finnish Market Court. The decision of the Finnish Market Court may be appealed to the Supreme Administrative Court within 30 days following the Finnish Market Court’s judgement. C. CIVIL LITIGATION


In competition cases, the procedure is governed by the provisions of the Competition Act together with the provisions of the Administrative Judicial Procedure Act, whereas in civil cases, the Code of Judicial Procedure is applied. As a rule, the proceedings related to competition law are conducted in writing. Nevertheless, the Finnish Market Court can hold an oral hearing if necessary in order to clarify the case.

Relevant Literature • CAIKA, T., “Komercnoslēpuma aizsardzības: tiesības vai pienākums?”, SALDO,

8 March 2012.

38

FRANCE



Besides the protection preventing third parties to access trade secrets within the course of proceedings before the French Competition Authority (“FCA”), there is no specific provision on trade secrets under French competition law. Protection is provided in France through intellectual property law, labour law, criminal law and unfair competition. Nevertheless, trade secrets can be found to have an undue impact on the free competition under French competition law or with respect to Articles 101 and 102 of the Treaty on the Functioning of the European Union (“TFEU”). Agreements on trade secrets, and specifically know-how licences and technology transfer agreements could be found to be infringing the free competition. Refusal to give access to know-how or disclose trade secrets could also be against competition law. The Competition Authority and the French courts enforce European competition law where practices involving trade secrets and know-how are found to infringe Articles 101 and 102 of the TFEU. Such practice could also infringe French competition law. In this respect, Article 420 of the Commercial Code gives a definition of anti-competitive practices which includes abuses of dominant positions and anti-competitive agreements. It should be noted that Article L. 420-2 of the Commercial Code not only prohibits abuses of dominant position, but also prohibits, “since it may affect the function or the structure of competition, abuses by a company or group of companies of the state of economic dependence against a client or a provider company. Such abuses may include a refusal to sell, related sales, discriminatory practices provided by Article L. 442-6 I or line agreements”. A.2 Definition of trade secrets

French competition law does not provide any definition of trade secrets. Furthermore, there is no general binding definition in other fields of internal law. However, there are some partial and scattered elements that are taken into account when examining trade secrets. In any event, the FCA takes into account the related concepts defined by the European law, such as the concept of know-how as defined by Article 1 (i) of the (EC) Regulation 772/2004 of 24 April 2004 on the application of Article 81 (3) of the Treaty to categories of technology transfer agreements, “TTBER”, and by Article 1 g) of the EU Regulation 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices. For the general notion of trade secrets within French law, please refer to the Commercial and IP Chapter. A.3 Applicability of EU competition law principles

The FCA and the Paris Court of Appeal, which has exclusive appeal jurisdiction over FCA decisions, both take into account decisions of the European Commission regarding competition law. Similarly, they also take into account decisions of the Court of Justice

39

of the European Union and European Tribunals regarding Competition Law. European case law has a strong impact on decisions of the Competition Authority. Accordingly, the principles elaborated within EU competition law apply also in national cases decided by the FCA and the Paris Court of Appeal. A.4 Decisional practice of the French Competition Authority

The French Competitio Authority - FCA - has not issued, to our knowledge, any decisions on substance regarding trade secrets. For a summary of the most relevant decisions relating to the protection of trade secrets from disclosure during proceedings, please refer to Section B.4 below. A.5 Civil court judgements

Within the scope of its appeal jurisdiction on decisions of the Competition Authority, the Paris Court of Appeal and the Court of Cassation (Cour de cassation) rendered very few decisions with interest regarding trade secrets, which however mainly relate to the protection of trade secrets from disclosure during proceedings (please refer to Section B.4 below). A.6 Inadequacies and need for a European harmonised and common


Neither competition law nor other fields of practice offer a legally binding, general definition of trade secrets, although many laws, regulation and courts refer to it. There is also no general regime governing the protection of trade secrets. The only specific protection is limited to disclosure of information within the course of proceedings before the FCA, whereas the general protection is ensured by unfair competition action. This general protection is settled by case law on a case-by-case analysis which gives rise to legal uncertainty. Furthermore, there are no specific provisions as to the indemnification of the owner of trade secret, which is freely set by courts on various uncertain grounds. In this respect, a European harmonised and common legislation would be feasible in France, and would allow giving a general definition of trade secret and a common regime to all trade secret infringement in the European Union This would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights, and would also allow protecting trade secrets from the production of documents in proceedings between Member States. B. POWERS OF THE FCA AND PROTECTION OF TRADE SECRETS IN THE



Pursuant to Articles L. 752-5 and 752-26 of the Commercial Code, a complaint before the FCA can either be filed by a third party or proceedings can be initiated ex officio by the authority. B.2 FCA sanctioning powers

In case the FCA concludes that a violation of competition law has occurred, it can impose fines or penalties up to 10% of the companies’ global gross income or up to EUR3 million

40

if the offender is not a company. Specific injunctions can also be ordered such as injunctions to stop anti-competitive practices. The FCA can also order the publication of the decision. B.3 Powers to carry out inspections

The FCA is granted investigation powers. Accordingly, it can order any investigation measures it deems necessary, whether the parties have requested them or not. Thus, the FCA can search the premises and seize any documents deemed necessary to the investigation, including digital files on a computer - Article 450-1 and seq. of the Commercial Code. However, a prior authorisation by a judge who is going to supervise the operations must be granted in order to carry out such activities. The FCA can also place under seal computers, documents or the entire premises. B.4 Rules protecting trade secrets from disclosure in the course of FCA

proceedings

When carrying out investigations, the FCA grants procedural guarantees to trade secrets owners. A specific procedure allows a party to ask that trade secrets be removed from the document to be produced in the course of litigation. The interested party must send a formal request to the FCA including a list of the information for which protection is requested. In this respect, Article L. 463-4 of the Commercial Code provides that the chief reporting officer of the Competition Authority ('Rapporteur general de l’Autorité de la concurrence') can refuse that a piece of evidence or part thereof be produced or reviewed by a party in the event it would jeopardise a third-party trade secret. In this case, a non-confidential, summarised version of said documents is provided to the party. If the FCA accepts the request, the document containing trade secrets may still be disclosed upon request of the reporting officer or one of the parties. If the interested party timely objects to the disclosure, the FCA decides whether to accept or deny disclosure, entirely or partially. This decision may be appealed before the Paris Court of Appeal. Furthermore, during hearings before the FCA, the president may ask parties to leave the room in order to preserve information that has been granted protection. The parties can also ask that some information be deleted from the decision to be published. The party must make such request within 15 days of the decision’s notification and specify why the information should not be displayed. In the event of disclosure of trade secrets in the course of proceedings, the sanction would be the compensation through award of damages to the owner of the secret (FCA decision of September 2010, No. 10-D-28, 20, Checks Processing). French courts have examined the issue of secret information protection within FCA proceedings. The Court of Cassation has ruled in application of Article L. 463-1 and L. 463-4 of the Commercial Code that documents used by experts in their opinion must be displayed to all the parties in the action if they are not found to jeopardise trade secrets. Such documents must also be displayed if they have not been deemed to involve trade secrets within the meaning of the specific procedure set by the Commercial Code. Such

41

principle has been reiterated in three judgements issued on the same day (Cour de cassation, Commercial Chamber, judgements of 2 February 2010, No. 08-70.450, No.08-70.449 and No.70.451). The issue of secrets information protections within proceedings has also been explored by the FCA. In its decision of 26 January 2011, No. 11-D02, the FCA – citing the Paris Court of Appeal judgement of 24 January 2006 in the historical buildings restoration market case – has ruled that the protection of trade secrets offered in the course of proceedings did not affect the defence’s right to evidentiary disclosure where the defendant had access to all evidence and documents supporting the ruling. B.5 Possibility for the claimant to participate in the proceedings

The claimants are part of the proceedings before the French Competition Authorities, i.e., they receive a copy of the statement of objections, can submit observations in response and can also ask to attend the hearing. B.6 Interim measures

In urgent cases, the FCA can order interim relief on the ground of Article L. 464-1 of the Commercial Code. Such reliefs are injunctions to cease anti-competitive practices. The FCA can order whatever injunction it deems appropriate, notwithstanding the requests of the parties. Interim reliefs include invalidating anti-competitive clauses in a contract or ordering the production of documents. It can also order to cease dispraising competitor’s products. B.7 Dealing with issues requiring specific technical knowledge

There is no specific rule within French law providing that an expert has to be appointed every time it is necessary to deal with issues requiring a specific technical knowledge, such as trade secrets. Nevertheless, the FCA chief reporting officer can appoint experts having specific expertise when he appoints the officer in charge of investigating the case. In any case, the FCA is not bound by the expert opinion. B.8 Average duration of the proceedings

In 2010, the average duration of proceedings from claims to final decision was 16.3 months, with an improvement in comparison to the previous four years when the average duration was 18 months. However, pre-trial investigation periods can last much longer, up to several years. B.9 Rights of appeal against FCA decisions

Decisions of the FCA can be appealed before the Paris Court of Appeal within one month from the ruling - Article L. 464-8 of the Commercial Code. The decision is nevertheless enforceable during the appeal. The Court of Appeal’s decision can be appealed before the Court of Cassation. C. CIVIL LITIGATION


42

There is virtually no difference between general litigation and trade secret litigation based on the grounds of competition since the same procedure and rules apply. However, competition law is discussed before specialised courts having specific knowledge in this field.

Relevant Literature • HAGEL, F., “The Protection of trade secret: Issues and Guidelines”, Cahiers de

droit de l'entreprise n° 1, January 2012 • DE BÉCHILLON, D., “Adversarial principle and trade secret protection – why it is

necessary to maintain current case law”, RFDA 2012 p. 1107 • CARAYON, B., “Report n°4159 on the sanctions for the violation of trade secret”,

Report for the National Assembly, 11 January 2012. Available in French at http://www.assemblee-nationale.fr/13/rapports/r4159.asp

• BOUT, R., BRUSCHI, M., LUBY, M., POILLOT-PERUZZETTO, S. and

MATHONNIÈRE, C. “Trade secrets protection” Lamy Droit Economique, n°1282, 2012

• KOVAR, R., “Patents, know-how and prohibited restrictive agreements-

implementation of Article 101 of the Treaty on the Functionning of the European Union to transfer of agreements technologies”, Jurisclasseur Lexisnexis, n° 1730-2, May 2011

• Report of the workshop presided by Claude Mathon, the protection of Trade

secrets: issues and propositions, by Claude Mathon and his team, 17 April 2011 • Proceedings of the Conference Prometheus on the legal protection of economical

information – Issues and prospects, by Bernard Carayon, André Dietz, Christian Harbulot, François Hagel, Olivier de Maison Rouge Thibault du Manoir de Juaye, Bertrand Warusfel, 18 October 2010. Proceedings of a conference organised by Bernard Carayon, a French deputy, regarding the protection of trade secrets and economical information in France.

• Competition Authority, Questions and answers on trade secrets protection,

February 2010, detailing the specific trade secret protection request procedure before the Competition Authority. Available in French at http://www.autoritedelaconcurrence.fr/user/standard.php?id_rub=370&id_article=1344

• Competition Authority, Trade Secret protection request procedure diagram,

February 2010.Available in French only at http://www.autoritedelaconcurrence.fr/images/article/schema_secret_ins.gif

• WILHELM, P., “Anti-competitive practice control procedure – procedure before the

Competition Authority”, Jurisclasseur Lexisnexis Encyclopedia, n° 381, December 2009

• CHEYNEL, B. “Trade secret protection new edition”, Lamy Concurrence April-June

2009 n°19 p. 79

43

• SZALEWSKI, J. S., “Know-how”, Répertoire de droit commercial Dalloz, February 2009

• FABRE, R., and SERSIRON, L., “Appropriation or Reservation of know how”,

Jurisclasseur Encyclopedia Patents, n° 4200, 28 February 2007

44

GERMANY



The German Act against Restraints of Competition ("ARC") does not contain any substantive provisions that explicitly refer to the protection of trade secrets. There is, however, a number of provisions protecting trade secrets from disclosure during proceedings (see Section B.4 below). In Germany, trade secrets are specifically protected under IP law, unfair competition law and criminal law. Competition law can, however, have an impact on trade secrets under Section 1 ARC that relates to illicit agreements/concerted practices and under the Sections 19 and 20 ARC that refer to abuses of dominant position. These general provisions may also apply to licensing agreements containing trade secrets as well as to the disclosure of (or refusal to disclose) trade secrets. Furthermore, the German Federal Cartel Office ("FCO") and the German courts have the power to enforce Article 101 and Article 102 of the TFEU with the consequence that these general EU competition law provisions may also apply to situations relating to licensing, disclosure/exchange of trade secrets, especially between competitors. These provisions, however, will only be applicable in cases where trade secrets-related behaviours result in a restriction of competition. Despite of not explicitly being written down in the ARC, the exchange but also unilateral disclosure of competitively relevant information (especially of trade secrets) constitutes a serious violation of German competition law, namely of Section 1 ARC which has almost the same wording as Article 101 (1) TFEU. This issue will not be further analysed since outside the scope of this Study. It should also be mentioned that Section 20 ARC refers to the prohibition of discrimination and prohibition of unfair hindrance. A.2 Definition of trade secrets

The ARC does not provide for a definition of trade secrets. However, according to the decision of the Federal Constitutional Court (Bundesverfassungsgericht) of 14 March 2006, "all facts, circumstances and procedures relating to an undertaking which are not evident, but only available to a limited group of people and concerning which there is a legitimate interest of non-proliferation by the legal entity" should be regarded as trade secrets. Therefore, German courts and the FCO usually qualify unpublished and strategically important information which may have effects on competitive practice as trade secrets (protection of hidden competition). A.3 Applicability of EU competition law principles

The relevant German competition law provisions have, in essence, been aligned with Article 101 TFEU. As a result, substantive differences between German and EU Competition Law do not exist in this field. Especially against this background, the FCO and the courts take into account the decision practice of the European Commission and the European courts and interpret German competition law provisions in the light of

45

these decisions when assessing concerted practices or agreements relating to trade secrets. As far as provisions referring to the abuse of a dominant position (Sections 19 and 20 of the ARC) are concerned, their content is quite similar to that of Article 102 TFEU. However, Sections 19 and 20 of the ARC do also contain certain considerations that are not (at least not directly) included in the wording of Article 102 TFEU. Nevertheless, the theories of harm and the principles developed by the European Commission and European courts with regard to dominance cases do also, at least to a large extent, apply when assessing German dominance cases. A.4 Decisional practice of the German Federal Cartel Office

The FCO has not issued, to our knowledge, any decisions on competition law violations regarding trade secrets. A.5 Civil court judgements

The German civil courts have never dealt with competition law issues involving trade secrets. For a summary of the most relevant decisions relating to the protection of trade secrets from disclosure during proceedings, please refer to Section B.4 below. A.6 Inadequacies and need for a European harmonised and common


As mentioned, the ARC does not contain any substantive provisions that explicitly refer to the protection of trade secrets, but does provide for trade secrets protection from disclosure during proceedings (see Section B.4 below). In this respect, the protection of trade secrets in Germany is basically adequate. However, it should be mentioned that an European harmonized and common legislation on trade secrets would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights. B. POWERS OF THE FCO AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of FCO investigations

The FCO can institute proceedings acting on its own initiative - ex officio - where it discovers anti-competitive conduct. Alternatively, it can also act upon request/complaint. B.2 FCO sanctioning powers

German procedural competition law makes a distinction between administrative proceedings and fine proceedings. While administrative proceedings are initiated in conjunction with merger control filings and in case of minor infringements of the ARC, fine proceedings concern more serious infringements of competition law such as price-fixing, customer allocation and abuse of dominance. Fine proceedings are regulated by the Code of Administrative Offences (Ordnungswidrigkeitengesetz) and the Code on Criminal Procedure (Strafprozessordnung). Administrative proceedings are determined by the provisions of the ARC and the Administrative Procedure Act (Verwaltungsverfahrensgesetz).

46

The sanctioning powers of the FCO depend on the type of proceedings. In administrative proceedings, the FCO may require undertakings to bring to an end an infringement of provisions of ARC or of Articles 101 and 102 of the TFEU. In addition, it may also impose on the undertakings all measures which are necessary to effectively bring the infringement to an end and are proportionate to the infringement established. In particular, the FCO can issue prohibition decisions, order remedies, declare the commitments of undertakings, capable of dispelling the FCO's concerns, to be binding, withdraw exemption, or skim off benefits. In fine proceedings, the FCO has the powers to impose monetary fines on the undertakings for serious infringements of competition law such as a violation of Article 101 and Article 102 of the TFEU or similar German provisions (i.e., Sections 1, 2, 19 or 20 of the ARC), or unlawfully putting a concentration into effect. In such cases of serious infringements, the FCO may impose monetary fines of up to EUR1 million for individuals and, for undertakings, up to 10% of their total turnover achieved in the last completed business year. In cases of less serious infringements, the fine is limited to EUR100,000. B.3 Powers to carry out inspections

In administrative proceedings, the FCO may request the surrender of documents regarding the economic situation from the owners of undertakings and their representatives or associated undertakings; and it can also do so during an inspection and/or examination of business documents on the premises of the undertakings. Preconditions are sufficient factual indications for a possible competition law infringement. Request of documents requires a written individual order by the Federal Ministry of Economics and Technology or the supreme land authority or a decision by the FCO made with the consent of its president. Further, the FCO may carry out inspections of business premises by means of a search warrant of the local court judge in whose district the search is to be made. Inspections are permissible if it is to be assumed that documents are located in the relevant premises which may be inspected and/or examined, and the surrender of which may be requested, by the cartel authority pursuant to Section 59 (1) of the ARC (see above). A court order is not required in case of imminent danger. Similarly, in fine proceedings, the FCO may request the surrender of documents, search the business premises of an undertaking as well as computer systems and image computer hard drives pursuant to Section 46 of the Code of Administrative Offences (Ordnungswidrigkeitengesetz) in conjunction with Sections 102 and 105 of the Code on Criminal Procedure (Strafprozessordnung) if authorised by a court order of the local court (Amtsgericht). According to Section 102 of the Code on Criminal Procedure, it must be presumed that the search will lead to the discovery of evidence; furthermore, a search may be conducted without a court order in case of imminent danger. Information gathered in the course of the above-described measures that comprise trade secrets must be kept confidential by the responsible staff of the FCO. Violations of this obligation are punishable pursuant to Section 203 (2) of the German Penal Code (Strafgesetzbuch). B.4 Rules protecting trade secrets from disclosure in the course of FCO

proceedings

47

A number of measures are put into effect in Germany to protect the secrecy of information during the proceedings. To start with, there are provisions excluding the public during proceedings. Public hearings can be held during proceedings before the FCO. However, the FCO shall exclude the public from the hearing or from part of it to the extent trade secrets might have to be disclosed. Trade secrets will not be protected in the course of proceedings where, considering all circumstances of the particular case, the significance of the matter in protecting competition outweighs the interests of the undertaking in maintaining confidentiality. Secondly, there are a number of further procedural provisions that safeguard the protection of trade secrets in proceedings before the FCO. Section 50 lit. b (2) sentence 1 No. 2 of the ARC limits the power of the FCO to forward trade secrets to foreign competition authorities and/or to other national authorities in the context of cooperation with them. It states that the FCO shall forward information only with the provision that receiving competition authorities will respect the protection of confidential information (including trade secrets) and will transmit it to third parties only if the FCO agrees to such transmission. The FCO is not allowed to forward trade secrets to the Federal Financial Supervisory Authority, the German Central Bank and the Media Institutions of the Länder, even though it shall, in performance of its functions, generally exchange information with these authorities. Furthermore, in fine proceedings, the defence counsel of the - potential/accused - cartel offender has the right to inspect files of the FCO. Further, the FCO is generally obliged to grant persons affected by cartel agreements access to its files. These rights are not limited by the fact that the files may contain trade secrets of other undertakings. In order to ensure confidentiality of trade secrets, the counsel has to blacken the trade secrets before he discloses the files to the client. However, this practice has not yet become legislation and is, partially, controversial. In administrative proceedings before the FCO, the undertaking concerned has the right to inspect files. However, undertakings whose trade secrets are contained in the files have the right to demand protection of the trade secrets by the FCO. Against this background, the FCO usually does not disclose trade secrets in administrative proceedings. It should be also mentioned that, according to the provisions of the Federal Freedom of Information Act (Informationsfreiheitsgesetz), everyone has the right to obtain information of federal ministries and offices in Germany upon application without having to fulfil any conditions. This legislation affects competition authorities as well. Although the right to get access to files is legally constructed as unconditional, competition authorities may refuse applications for different reasons, for example in order to protect trade secrets, personal data, the exchange of information between competition authorities organised in networks, leniency applications or if the information applied for is already publicly available. In case of a competition authority's decision denying access to information, claimants may submit their case to the administrative courts. German courts have dealt with the issue of trade secrets protection in the course of proceedings. In this respect, the most important principles stemming from such judgements are the following:

48

(a) In fine proceedings, the defence counsel has to be given access to files of other accused undertakings or complaining undertakings pursuant to Section 147 of the Code of Criminal Procedure if these files refer to a connected complex of facts and are handled by the same appellate court. Possible disclosure of trade secrets shall not generally hinder the inspection of files; however, the defence counsel can disclose to its client only the information that is indispensable for a proper defence (decision of the German Supreme Court (Bundesgerichtshof) of 4 October 2007, BGH KRB 59/07). Such principle generates several concerns since there is no explicit provision requiring the defence counsel not to disclose trade secrets of other undertakings contained in the files.

(b) The fact that trade secrets were disclosed to one party of the proceedings against

the consent of the other party will only result in claims for compensation of damages (decision of the German Regional High Court of Berlin (Kammergericht) of 20 October 1999).

(c) Third parties requesting access to leniency documents in preparation for a private

cartel damage claim should only be granted limited access to files, i.e., confidential business information should not be submitted to private plaintiffs (decision of the Local Court Bonn (Amtsgericht) of 30 January 2002, Pfleiderer).


Claimants whose interest can substantially be affected by the decision of the FCO or the Court of Appeal, can participate in proceedings before the FCO and the courts of appeal. In particular, in administrative proceedings, pursuant to Section 54 (2) ARC, the parties to the proceedings before the FCO are the following: 1. Those who have applied for the institution of proceedings 2. Cartels, undertakings, trade and industry associations or professional

organisations against which the proceedings are directed 3. Persons and associations of persons whose interests will be substantially affected

by the decision and who, upon their application, have been admitted by the cartel authority to the proceedings; the interests of consumer advice centers and other consumer associations supported by public funds are substantially affected also in cases in which the decision has effects on numerous consumers and in which therefore the interests of consumers in general are substantially affected

B.6 Interim measures

Pursuant to Section 32 a (1) of the ARC, in cases of urgency, the FCO may order interim measures ex officio if there is a risk of serious and irreparable damage to competition. The interim measures consist in the same measures the FCO can issue on the grounds of Section 32 ARC (see Section B.2 above). These measures must, however, be interim in nature and not go beyond what is necessary to prevent serious and irreparable damage to competition. Interim measures shall be limited in time. The time period may be extended, but should not normally exceed one year in total. B.7 Dealing with issues requiring specific technical knowledge

49

The chairman and other members of the decision divisions of the FCO shall be civil servants appointed for life and shall be qualified to serve as judges or senior civil servants. This means that case handlers must either have a legal education or another university degree. In practice, FCO's case handlers handling issues requiring specific technical knowledge are usually lawyers or economists. The decision divisions of the FCO are mainly organised according to economical sectors with the consequence that the case handlers often, but not always, have the required technical knowledge related to the sector in question. B.8 Average duration of the proceedings

The average duration from initiating the claim to final decision can vary to a great extent depending on the duration of the investigation phase. The FCO institutes fine proceedings where the investigations reveal sufficient evidence of a cartel law infringement. Often the next step after instituting fine proceedings is the search of the premises of the persons and companies concerned as well as IT screening. Finally, the FCO evaluates the evidence gathered and takes its decision. This procedure from claim to final decision of the FCO can last over one to two years. B.9 Rights of appeal against FCO decisions

Decisions of the FCO are subject to full factual and legal review by the Higher Regional Court of Düsseldorf (OLG Düsseldorf). Decisions of the Higher Regional Court may be appealed to the Federal Supreme Court (Bundesgerichtshof) on questions of law.

C. CIVIL LITIGATION


In principle, there are no major differences between general litigation and litigation relating to competition law violations. However, one recent development with regard to damage claims in the course of civil proceedings deserves to be mentioned. In its recent judgement of 28 June 2011, the German Federal Supreme Court (Bundesgerichtshof) had recognised the so-called "passing-on defense" by deciding that damage claims can also be brought by indirect victims of cartels (i.e., customers of customers). Consequently, where the direct purchaser brings an action for civil damages against the cartelist, the latter can raise the defence and counter-argument that the direct purchaser passed the effect of the increased cartel price on to its customers. Previously, the German legislator had restricted the circumstances in which the passing-on defence could be used by amending Section 33 (3) of the ARC stating that the mere fact that a cartelised product was resold by the purchaser did not exclude its action for damages.

Relevant Literature • ANDERS, L., "Die Kartellbehörden im Angesicht der Informationsfreiheit",

Wirtschaft und Wettbewerb, 2006, pp. 592-601 • Engelsing, F., "Münchener Kommentar zum Wettbewerbsrecht,, Band 2: Gesetz

gegen Wettbewerbsbeschränkungen, 2008, Section 56 para 18 et seqq.

50

• FISCHER, T., "Strafgesetzbuch und Nebengesetze", 57th Edition, 2010, Section 203, pp. 1320-1338

• DREHER, M., HOFFMANN, J., "Kartellverstöße durch Informationsaustausch",

Wirtschaft und Wettbewerb 2011, pp. 1181-1196

51

GREECE



Greek Law No. 3959/2011 “on the protection of free competition”, which repealed former Law 703/1977, effective from April 2011, does not contain any specific provision on trade secrets. In the absence of specific provisions on the protection of trade secrets, general provisions included in Law 3959/2011 may be applied in cases involving trade secrets. In particular, Article 1 prohibits agreements and concerted practices having as their object or effect the prevention, restriction or distortion of competition in the Greek territory, and Article 2 prohibits abuses of dominant position. It should be, however, considered, that the mission of the Hellenic Competition Commission (“HCC” or “Commission”) is the protection of public and not private interest. HCC’s purpose is to safeguard free competition in the Greek territory and not to provide legal protection to individuals whose interests or rights are violated due to an infringement of Articles 1 and 2 of L. 3959/2011. Furthermore, Article 21 of Law 1733/1987 “on technology transfer, innovations and technological innovation” applies to technology transfer agreements. Although such law and this provision do not belong systematically to competition law, they govern technology transfer agreements, which is a form of protection of trade secrets recognised by free competition law. In particular, Article 21 expressly refers to the Regulation number 2349/1984 of the Commission of European Communities (Official Journal No. L 219/15)9, and states that terms in contracts on technology transfer including ban of exportation shall be null and void. A.2 Definition of trade secrets

Greek competition law does not provide a definition of trade secrets. Doctrine adopts a broad definition, considering as trade secrets any data (information, methods, techniques) of a commercial or technical nature, known to a limited circle of persons and having economic value for the undertaking due to their secret character. Such definition is commonly accepted in unfair competition law, which is the sector granting protection to trade secrets by virtue of specific provisions, but is also a definition adopted by scholars of free competition law. It should be mentioned that Article 21 of L. 1733/1987 provides an indicative list of “technology” which may constitute the object of a transfer agreement, and indicates that “industrial secrets are mainly technical information, data or knowledge which relate to processes, expertise or skills, that have practical application particularly in relation to the production of goods and the rendering of services, provided that they have not become widely known”. Moreover, when competition scholars or competition authorities deal with agreements on or including licensing of know-how, they follow the definitions provided in EU competition law and namely Block Exemption Regulations, such as

9 This Regulation has been replaced by Commission Regulation (EC) No 240/96 of 31 January 1996 “on the application of Article 85 (3) of the Treaty to certain categories of technology transfer agreements” covering also know-how licensing, which has been repealed by currently applicable Regulation (EC) No 772/2004.

52

Commission Regulation (EC) No 772/2004 of 27 April 2004 on the application of Article 81(3) of the Treaty (now Article 101(3) of the TFEU) to categories of technology transfer (“TTBER”) and Commission Regulation No 2790/1999 of 22 December 1999 on the application of Article 81(3) of the Treaty (now Article 101(3) of the TFEU) to categories of vertical agreements and concerted practices for franchising agreements. A.3 Applicability of EU competition law principles

In applying competition law rules, the HCC and the Greek courts do take into account the decisions of both European Commission and European Tribunals. Furthermore, Block Exemption Regulations (including TTBER) are directly applicable in Greece. Additionally, according to specific law provisions, HCC and the Greek courts may sanction infringements of Articles 101 and 102 of Law 3959/2011. In all cases concerning infringement of either Greek or EU competition law, the jurisprudence of the European Commission and European Tribunals serves always as a valuable tool for the interpretation and application of free competition provisions. This applies also to decisions regarding trade secrets. A.4 Decisional practice of the Hellenic Competition Authority

Case law on trade secrets protection in Greece is rather poor. Decisions issued by the Commission may be divided in two groups: (a) decisions upon notifications of agreements on or including transfers of know-how; and (b) abuse of dominant position where it may be argued that non-disclosure of trade secrets was involved. A third group might be identified in relation to illicit exchanges of confidential business information falling under the scope of Article 1 par. 1 of Law 3959/2011. However, voluntary exchanges of confidential information considered as a tool to co-ordinate the undertakings’ market behaviour is outside the scope of this chapter. Group A - Clearance of agreements including transfers of know-how Decision No 2/1979: The Commission decided that an agreement for the granting of an exclusive and non-transferable licence of methods, designs, technique and expertise (know-how) from Levi Strauss & Co. to a Greek company for the manufacture in Greece of clothing under the trademarks of Levi Strauss does not restrict competition in the sense of Articles 1 par. 1 and 2 of Law 703/77. Decision No 25/1985: The Commission decided that a know-how licence agreement concluded between Philip Morris and two Greek companies by virtue of which Philip Morris granted to the Greek companies an exclusive and non-transferable licence for the use of methods, technique and expertise (know-how) for the manufacture and distribution in Greece of cigarettes does not fall under the scope of Articles 1 par. 1 and 2 of Law 703/77. Two further cases relate to franchising agreements involving the transfer of know-how from franchisors: HCC- Section B’ Decision no 51/97 and HCC – Section B’ Decision no. 432/V/2009. It is worth noting that the HCC has not considered, in such cases, the (even exclusive and non-transferrable) right to use know-how as problematic from a competition law perspective, but has considered as restrictive other terms of the agreements - mainly the duration of the non-compete clause following the termination of the agreements.

53

Group B – Restriction of access to trade secrets as abuse of dominant position HCC – Section B’ no. 244/III/2003: The owner of an independent device repair and service shop filed a complaint against Sony Hellas S.A. for infringement of Articles 1 par. 1 and 2 of Law 703/77. The claimant argued that he tried to purchase tools required for the repair and service of certain Sony devices from an authorised Sony service shop and that the latter refused to supply him, because the Sony representative in Greece, Sony Hellas, does not supply non-authorised shops with tools, software, etc. Furthermore, the claimant argued that the cost of purchase of technical manuals for Sony devices for independent non-authorised shops are extremely high and about 25 times more expensive than in any other EU countries. By those means, Sony Hellas intends to channel demand for repair and service of its devices solely to authorised shops and to exclude any non-authorised independent professionals. Sony Hellas argued that its devices are the products of continuous and expensive research, that they incorporate a lot of innovations and patents and that it is reasonable to insist on the service of its clients through the organisation of a network of authorised Sony shops which are selected on the basis of specific criteria and whose personnel receive extensive training on the technical specifications of each product. HCC discovered that the agreement concluded between Sony Hellas and its network prohibited the members of its network to supply any third parties with technical manuals and tools necessary for the repair of Sony devices. Such contractual provision has been declared by HCC as contrary to Article 1 par. 1 of Law 703/77, because it limited access to services of repair of Sony devices by independent repair shops. Furthermore, this same behaviour and the imposition of an extremely high price to technical manuals falls under the scope of Article 2 sec b of Law 703/77, since it limited the provision of repair services for Sony devices by independent repair shops to the prejudice of consumers who were not free to choose the undertaking which would repair their device. HCC – Plenary Session Decision 207/III/2002: This decision imposed to Coca Cola Hellenic Bottling Company (“3E”) a fine for abuse of dominant position. Among others, the claimants (a wholesaler of Coca Cola products and the Hellenic Association of Manufacturers of Soft Drinks) raised the issue of exclusivity of the licence granted by the Coca Cola Company (“TCCC”) to 3E in Greece for the bottling of soft drinks under its trademarks. Under an exclusive licence agreement dated from 1969, 3E enjoyed a monopoly on Coca Cola products in the Greek market and assigned the right of manufacturing such products only to certain companies – usually its affiliates – with the exclusion of all other manufacturers. However, according to the HCC, such exclusive licence does not fall under the scope of Article 2 of Law 703/77, since the agreement between TCCC and 3E is a know-how licence agreement which fell under the scope of the then applicable Block Exemption Regulation 240/1996 on technology transfer agreements. Therefore, the contractual obligation of TCCC to abstain from granting to other undertakings a licence for its know-how in the territory already awarded to 3E has been considered as legitimate. A.5 Civil court judgements

The Greek civil courts have never dealt with competition law issues involving trade secrets.

54

A.6 Inadequacies and need for a European harmonised and common legislation specifically targeted to trade secrets?

Greek competition law implements in Greece the regulations and principles of EU law. Therefore, the means of protection of trade secrets at the Greek level are not different than those available at the EU level. Additionally, the Greek legal order acknowledges the existence of trade secrets, at least as a good deserving legal protection, and includes in the definition of trade secrets a wide range of information, data, etc. It is true that under Greek law, trade secrets do not seem to enjoy the same level of protection as industrial and intellectual property rights, but an inherent legal value worth protection is attributed to them. In an environment where access to information is easier than ever and knowledge is considered as a valuable business asset, facilitation of cross-border exchange of information through agreements for the transfer or licensing of know-how could depend to a certain extent on the existence of common rules, in the European Union, on the definition of the term “trade secrets” and the type of protection awarded to them. A common legislation at the EU level would solve problems caused by the diversity of Member States’ legislation and create a safer environment for innovation. B. POWERS OF THE HCC AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of HCC investigations

The HCC may sanction infringements of Articles 1, 2 of Law 3959/2011 and Articles 101, 102 of the TFEU either ex officio or further to a complaint of an individual or an application of the Minister of Development. B.2 HCC sanctioning powers

When the HCC confirms an infringement of Articles 1, 2 of Law 3959/2011 and 101, 102 of the TFEU, it can take the following measures: (a) Address binding recommendations (b) Order concerned undertakings or associations of undertakings to cease

infringement and desist in the future (c) Impose behavioural or structural remedies. Structural remedies can only be

imposed either where there is no equally effective behavioural (d) Impose fines to undertakings or relevant associations that may not exceed 10%

of the total turnover (e) Impose fines under d) or a periodic penalty or both, in case of continuation or

repeat of the infringement or failure to comply with a commitment made binding by a decision of the HCC. The periodic penalty may not exceed the amount of EUR10,000 per day of non-compliance with the decision of the HCC

(f) Impose fines not exceeding 10% of the total turnover of the undertaking in cases

of failure to comply with a decision of the HCC (g) Impose separate fines to natural persons responsible for compliance with Articles

1, 2 of Law 3959/2011 and Articles 101, 102 of the TFEU, notably to businessmen of one-man businesses, administrators and partners of joint

55

ventures or partnerships, to members of Board of Directors of societes anonymes and to persons competent for putting in place the corporate decisions related to the infringement. Such fines may range from EUR200,000 to EUR2,000,000 and are imposed if it is proved that the above natural persons have participated in preparing, organising or committing the infringement.

Furthermore, when the HCC confirms a violation of Articles 1 and 2 of Law 3969/2011, it must announce such event to the competent public prosecutor within 10 days following the issuance of the respective decision, in order for penal authorities to initiate criminal proceedings for the imposition of penal sanctions provided for violations of Articles 1, 2 of Law 3969/2011 and 101 and 102 of the TFEU. B.3 Powers to carry out inspections

The officials of the HCC have the powers of tax auditors and are entitled to proceed to the following actions, in the framework of an investigation for infringements of Articles 1, 2 of Law 3959/2011 and 101 and 102 of the TFEU: (a) Examine any kind of books, records and other documents of the undertakings or

associations of undertakings, as well as the electronic business correspondence of businessmen, administrators, managing directors, officers and personnel of the undertakings or associations of undertakings, irrespective of the medium on which they are stored and the place of storage and receive copies or extracts of the above

(b) Proceed to the confiscation of books, documents and other pieces, as well as of

electronic means of storage or data transfer, which constitute professional information

(c) Control and collect information and data from mobile terminals, portable devices

as well as from their servers, located either inside or outside the premises of investigated undertakings and associations of undertakings, in cooperation with the competent authorities

(d) Enter and investigate the offices and other premises and means of transport of

the undertakings or associations of undertakings (e) Seal any business premises and books and records for the period necessary and

to the extent necessary for the inspection (f) Conduct investigations in the residences of the businessmen, administrators,

managing directors, officers and personnel of the undertakings or associations of undertakings, if a reasonable suspicion exists that books or other records related to the business and to the subject matter of the inspection are being kept in those premises

(g) Take statements, under oath or not, and ask from any officer or member of the

personnel of the undertakings or associations of undertakings, explanations on facts or documents relating to the subject matter and the purpose of the inspection and record their answers

56

The officials of the HCC act upon written authorisation of the president of the HCC or the appointed vice-president or the deneral director or the director of the Directorate General (DG) of Competition of the HCC. B.4 Rules protecting trade secrets from disclosure in the course of HCC

proceedings

The HCC must comply with the duty of secrecy while collecting, processing and evaluating data and information under Articles 38 and 39 of Law 3959/2011. This obligation applies not only to HCC officials but to any external expert used by the HCC under a confidentiality agreement. Furthermore, public authorities and legal entities of the public sector who provide information and assist the HCC and its officials are also bound by a duty of secrecy. Subject to Article 37 para 2 of the Greek Penal Procedure Code, the officials of the DG Competition of the HCC and civil servants or personnel of entities of the public sector who, in the course of execution of their duties, take knowledge of confidential information of undertakings, associations of undertakings or other natural or legal entities, must keep them confidential. According to Article 41 of Law 3969/2011 information collected in application of Law 3959/2011 may be used only for the purposes intended with the request for information, the inspection or the examination of witnesses. In all cases of filing or collection of information under competition law, the legal or natural persons who submit or from whom such information is collected, may determine, by a reasoned request to the DG Competition, that the information, the documents or extracts contain confidential information and provide such information or documents in a separate non-confidential version. In any case, such persons are invited by the DG to determine which information or documents are confidential and to provide a separate non-confidential version thereof. The DG may refuse, grant temporarily and then revoke the above requests, after having invited the undertaking concerned to submit its opinion. In case of disagreement on the confidential nature of the information, the president of the HCC decides on the nature of the information or the document. The undertakings against whom a complaint for infringement of Articles 1, 2 of Law 3969/2011 and 101 and 102 of the TFEU is filed have a right of access to non-confidential information of the administration file. If access to documents, including confidential business information, is absolutely necessary for the exercise of their defence rights; at their request, the president of the HCC may grant access to all or part of those documents, but only to the undertaking against whom a complaint is filed. If the Rapporteur of the case considers that use of confidential documents is required for the preparation of his opinion, the president of the HCC decides on the information to be included in said opinion which, after being included, is no longer confidential. Hearings before the HCC are not public (Article 5 par. 3 of the HCC Regulation) and even third parties who request to participate to the hearing are not allowed to attend the entire hearing. The HCC may allow their presence only if it considers that their participation will help the examination of the case and after they have replied to the questions of the HCC, they leave the hearing room.

57

In case of appeal against HCC decisions, confidential information is submitted before the courts in a separate confidential file and the litigant parties are not allowed to have access to that file, unless the ruling court issues a different decision upon written request. B.5 Possibility for the claimant to participate in the proceedings

The person who files a complaint for infringement of Articles 1 and 2 of Law 3959/2011 is considered as a party of the proceedings and is invited to participate to the proceedings by the HCC. B.6 Interim measures

In cases of urgency due to the risk of serious and irreparable damage to public interest, HCC has the exclusive competence to order interim measures either ex officio or following an application submitted by the Minister of Development. In the framework of this competence, the HCC may also issue a provisional order, which remains in force until the issuance of the interim measures decision at the latest. The HCC invites the undertaking against whom the order or the interim measures are requested to participate to the proceedings. Undertakings concerned may seek interim measures and/or provisional orders before civil courts for the protection of their private interests. B.7 Dealing with issues requiring specific technical knowledge

The HCC can consult external experts in case it deems it appropriate and necessary in order to examine specific issues and questions, which may not be addressed by its personnel (Article 21 par. 7 of Law 3959/2011 and 34 of the Regulation of Organization of the HCC/“HCC Regulation”). B.8 Average duration of the proceedings

Any a priori estimation of time required until the issuance of a final decision by the HCC is extremely difficult due to the workload of the HCC. From filing of the complaint up to issuance of a decision the average duration could be estimated in three to five years. However, in an effort to improve the effectiveness of the HCC work, the recently adopted Law 3959/2011 sets a system of prioritisation of cases examined by the Commission on the basis of criteria which have already been determined by virtue of the HCC Decision nr. 525/VI/2011. The basic criterion of action of the Commission is the public interest, meaning that the HCC shall evaluate complaints on the basis of the estimated impact of a practice to free competition, especially vis-à-vis consumers. B.9 Rights of appeal against HCC decisions

Decisions of the HCC are subject to appeal before the Administrative Court of Appeal. The filing of the appeal does not per se suspend the enforceability of the decision, although the appellant can file a petition for its interim suspension. The decisions of the Administrative Court of Appeal are subject to appeal before the Greek Conseil d’Etat - the Supreme Administrative Court.

58

C. CIVIL LITIGATION


Under Article 35 of Law 3959/2011, courts of any jurisdiction can apply Articles 1 and 2 of Law 3959/2011 and Articles 101 and 102 of Law 3959/2011 of the TFEU. Civil courts are competent to rule on disputes based on the infringement of competition law provisions. Any acts or omissions falling under the scope of Articles 1 and 2 of Law 3959/2011 are automatically null and void, so any person suffering damages from such acts or omissions is entitled to bring before civil courts an action for restitution of damages. Such action will be based on tort (Article 914 of the Civil Code: “Any person harming someone else in breach of law and by negligence or intention is obliged to indemnify such other person”). The procedure followed is the same as in any other civil case. The claimant may bring an action before civil courts and at the same time file a complaint before the HCC. Civil courts are not obliged to but may suspend ruling on the case until the issuance of a HCC decision - although this has rarely happened in the past. In Greece, there are special IP courts which might also deal with cases of competition law involving trade secrets - see the Commercial and IP Chapter.

Relevant Literature • Georgios Triantafyllakis, “Free Competition”, Nomiki Vivliothiki, 2005 • Ioannis Dryllerakis, “The New Law on Free Competition”, Nomiki Vivliothiki, 2011 • Anthoula Papadopoulou, “Business Secret”, Sakkoulas Publications, 2007. The

author provides an analysis of technology transfer agreements as well as of confidentiality clauses included in various contracts

• D. Anagnostoupoulou / E. Kleftodimou, Know-how transfer agreements in EU law,

Sakkoulas Publications, 1992 • L. Kotsiris, Competition Law, Sakkoulas Publications, 4th Edition, 2001 • Dim. Koutsoukis and Dim. Tzouganatos, The application of L. 703/1977, Volume

A’: 1979-1986, Athens 1987 pp. 12-13. The authors present case law of the Competition Commission for years 1979-1986

• K. Theodoridis, “Microsoft complies”, Epitheorisi Evropaikou dikaiou 2005, pp.

481-483 • K. Theodoridis, “Microsoft at the gun sight of the European Commission”,

Epitheorisi Evropaikou Dikaiou, 2004, pp. 619-623 • K. Kleisouras, “Commercial and industrial secret in EU competition law”, Dikaio

Epixeiriseon kai Etairion 2006, pp. 370-375 • Ch. Apostolopoulos, “Conditions of application and basic principles of Regulation

772/2004/EC regarding technology transfer agreements”, Chronika Idiotikou Dikaiou, 2009, pp. 783-792

59

• V. Chatzopoulos, “Essential facilities rule, after the decision of the European Commission on Microsoft and of the Court of European Communities on IMS Health”, Chronika Idiotikou Dikaiou 2004, pp. 655-670

60

HUNGARY



The Hungarian Act LVII of 1996 on the Prohibition of Unfair and Restrictive Market Practices (the “Competition Act”), in addition to the classical competition law rules (merger control, prohibition of restrictive agreements and abuse of a dominant position), also contains unfair competition rules. While the classical competition law rules of the Competition Act do not contain any specific provisions on the protection of trade secrets, Chapter II of the Competition Act on the Prohibition of Unfair Competition does contain certain provisions in this regard. However, since this chapter only refers to the relation between the classical competition law rules with the protection of trade secrets, further details on the relation between unfair competition rules and trade secrets can be found in the Commercial and IP Chapter. The general rules contained in the Competition Act prohibiting restrictive agreements/concerted practices (Section 11 of the Competition Act) and abuses of a dominant position (Section 21 of the Competition Act) may apply also to situations relating to the licensing, the disclosure of (or a refusal to disclose) trade secrets. Competition law prohibits the disclosure of trade secrets to the extent that it prohibits the exchange of competitively sensitive information between competitors. Moreover, under certain special circumstances, dominant companies may be required to disclose trade secrets if this is necessary for downstream competitors to enter the market (see e.g., by analogy the EU essential facilities and interoperability cases). Furthermore, like other national competition authorities and national courts within the European Union, the Hungarian Competition Authority (“HCA”) and the Hungarian courts have the power to enforce Article 101 and Article 102 of the TFEU, which may also have a similar impact on trade secrets as the national competition law provisions. However, both EU and Hungarian competition laws are applicable only in circumstances where the use of (or refusal to transfer) trade secrets has an impact on competition, which is the final object of competition law protection. A.2 Definition of trade secrets

The Competition Act does not define “trade secret”, but it refers to the definition included in Section 81(2) of the Civil Code, according to which trade secret means all facts, information, solution or data pertaining to economic activities whose publication, acquisition or use by unauthorised persons, is likely to violate or imperil the financial, economic or market interests of the owner of such secrets, provided the right holder has taken all the necessary steps to keep such information confidential. A.3 Applicability of EU competition law principles

The HCA and Hungarian courts do take into account the decisional practice and the guidelines of the European Commission, as well as the case law of the European courts. Hungarian competition law is therefore generally interpreted in accordance with the principles of the European Community competition law.

61

A.4 Decisional practice of the Hungarian Competition Authority

HCA cases dealing with classical competition law issues involving the protection or the use of trade secrets have not been retrieved, apart from those cases which dealt with the notion of “competitively sensitive information” in the context of an information cartel or a restrictive horizontal (e.g., price fixing) agreement, which are however outside the scope of this Study. A.5 Civil court judgements

Court cases dealing with classical competition law issues involving the protection or the use of trade have not been retrieved. A.6 Inadequacies and need for a European harmonised and common


As a matter of fact, as above outlined, competition law only incidentally regulates the use of trade secrets, notably when it may have an impact on competition. This particular feature of competition law requires a flexible, effects-based approach rather than the use of rigid categories and definitions. However, a European harmonized and common legislation on trade secrets would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights. B. POWERS OF THE HCA AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of HCA proceedings

Investigations of the HCA are always commenced ex officio, regardless of how the HCA became aware of the infringement. The HCA may become aware of an infringement either as a result of a complaint, an informant, a leniency application or based on knowledge the HCA acquired by itself or from other competition agencies - including the European Commission. B.2 HCA sanctioning powers

The HCA may order the termination of the infringement and impose remedies, as well as administrative fines of up to 10% of the turnover of the undertaking concerned. Alternatively, the HCA can accept and render binding commitments submitted by the parties. B.3 Powers to carry out inspections

Within the context of competition law investigations, the HCA has the power to: (a) carry out on-the-spot investigations (dawn raids). During dawn raids, the HCA

has the power to access/search all premises of the undertaking, and can copy and seize any document, in whatever format, held by the undertaking. The HCA may also make forensic copies of hard disks. The HCA may obtain and review business secrets, bank secrets, and personal data. For dawn raids to be carried out, the HCA must obtain a search warrant from the Metropolitan Tribunal. Moreover, the HCA may also search private premises, but only if it obtains a search warrant from the Metropolitan Tribunal;

62

(b) request oral clarifications on the subject matter of the investigation during the

dawn raids; and

(c) request information and documents relevant to the case of the undertaking under investigation and/or any third party.

B.4 Rules protecting trade secrets from disclosure in the course of HCA

proceedings

Under applicable procedural rules, the HCA must observe the protection of business secrets and of any other confidential information protected by law. The HCA is, in particular, required to ensure that confidential information is not disclosed to the public or to any unauthorised person in the course of granting access to the file, the hearing, and the publication of the decision. Therefore, although documents and statements provided to the HCA are in general accessible to other parties involved in the investigation after the notification of the preliminary position10, any party to the investigation may request that access be denied to documents containing its business secrets. The party submitting such request may be obliged to provide the Competition Office with a non-confidential version of the document in question, to which access can be granted. Similarly, the protection of business (and other) secrets requires that, although hearings by the Competition Council - the decision-making body of the HCA - are generally public, the Competition Council may hold closed hearings if necessary to ensure confidentiality. Finally, notwithstanding the decisions of the Competition Council are published in full, the public version is cleared from any confidential information in order to avoid the disclosure of business secrets. B.5 Possibility for the claimant to participate in the proceedings

Claimants are not involved in the proceedings (i.e., they do not have access to the file and they do not receive the preliminary position of the HCA). The scope of claimants’ rights depends on whether they submitted a formal notification, which must be submitted on the detailed notification form of the HCA, or a more informal complaint. Persons submitting a formal notification: (i) have a right to have their notification decided upon by the HCA within two

months’ time, with a possible two-month extension; however, the HCA is not obliged to launch an investigation on the basis of the notification, as it may reject a notification also for lack of public interest;

(ii) may request anonymity, and may also request the notification not to be

disclosed; (iii) may request protection of its business secrets which have been submitted to the

HCA in the course of the notification; and

10 The HCA preliminary position is a document similar to the Statement of Objections issued by the European Commission.

63

(iv) may challenge the order of the HCA rejecting the notification before the

Metropolitan Tribunal. Persons submitting an informal complaint have even less procedural rights and, in particular, they may only: (i) request anonymity; and (ii) request that the complaint not be disclosed, and the HCA is obliged to inform

them if it opens an investigation or if there is an investigation already pending/concluded in the case.

B.6 Interim measures

The HCA may issue interim measures, ordering the termination of the unlawful behaviour/compliance with the competition rules, if - in view of the legitimate interests of the interested parties and the harm threatening competition - this is immediately necessary. B.7 Dealing with issues requiring specific technical knowledge

The HCA may request information from technical experts, if necessary. B.8 Average duration of the proceedings

If the HCA initiates an investigation, it must adopt a decision within six months, although that deadline may be extended twice of further six months, and there is no sanction if the investigation exceeds such time limits. The average duration of HCA proceedings would amount to one-and-a-half year or two years. B.9 Rights of appeal against HCA decisions

The decisions of the HCA are subject to judicial review before the Metropolitan Tribunal in Budapest. If an undertaking concerned wishes to seek judicial review of a decision, it must file a statement of claims within 30 days of the notification of the decision. The judgement of the Metropolitan Court may, in turn, be appealed to the Metropolitan Court of Appeal in Budapest. In case of an error in law, extraordinary judicial review can be requested from the Curia - formerly known as the Supreme Court of Hungary - against the otherwise final and enforceable judgement of the Metropolitan Court of Appeal. C. CIVIL LITIGATION


Actions against competition law violations can be brought pursuant to the general rules of civil procedure and the special rules contained in the Competition Act. Private actions must be brought in regular civil courts. There are no specialist courts or sections of courts to hear actions based on a breach of competition law. Depending on the value of the claim, cases can be heard either by the local courts or the county courts, such as the Metropolitan Court in Budapest.

64

A prior finding by the HCA of an infringement is not a precondition to bringing a claim (e.g., damages claim) for competition law violations. However, the Competition Act requires that the court notifies the HCA, if competition laws are to be applied in pending civil litigation. If the HCA informs the court in response to such a notice that it has launched an investigation in that particular case, the court must suspend its procedure until a final and binding decision has been made by HCA. Should the HCA make a decision, it is binding on the civil courts insofar as the existence of an infringement is concerned. The HCA has recently introduced a rebuttable presumption that hard-core cartels (such as horizontal price-fixing, market sharing, etc.) result in a price increase of 10%. As a result, it is likely that - in practice - a claimant will only need to prove, in cases connected to hard-core infringements, causation and/or that the damage incurred exceeded the above 10% level. It will be then up to the defendants (e.g., by invoking the passing-on defence) to prove that either the amount of the damage was less than 10% or that the claimant did not suffer any damage at all.

Relevant Literature No relevant literature has been identified.

65

REPUBLIC OF IRELAND



There is no specific competition legislation in Ireland specifically targeted to violations concerning trade secrets. However, the general provisions contained in the Irish Competition Act 2002 relate to illicit agreements/concerted practices and abuses of dominant position and may apply also to situations relating to the licensing, disclosure of (or refusal to disclose) trade secrets. In particular: (i) Section 4 (1) of the Competition Act 2002 prohibits agreements and concerted

practices having as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in Ireland or in any part of Ireland. The exchange of competitively sensitive information between competitors is likely to breach the above provision. Furthermore, in relation to confidentiality clauses in agreements, the Competition Authority is generally of the view that they do not breach Section 4 (1) of the Competition Act 2002, and are therefore not restrictive of competition provided that the object or effect of the clause is to protect genuinely confidential information. In the context of mergers and acquisitions, the Irish Competition Authority appears to be willing to accept agreements that place indefinite obligations on a vendor not to disclose confidential information surrounding the target business.

(ii) Section 4 (8) of the Competition Act 2002 refers to concentrations and

arrangements constituting restrictions which are directly related and ancillary to the implementation of the concentration. The relevant principles in relation to non-compete obligations mirror those of the European Commission Notice on restrictions directly related and ancillary to concentrations, i.e., if the transaction involves both the transfer of goodwill and know-how, a period of up to three years will be permitted on the basis that it is felt that the know-how will require and justify a longer period of protection.

(iii) Section 5 of the Competition Act 2002 prohibits any abuse by one or more

undertakings of a dominant position in trade for any good or services in Ireland or in any part of Ireland.

Furthermore, the Irish Category Declaration on Vertical Restraints provides an automatic exemption from the prohibition against restrictive agreements and practices contained in Section 4 (1) of the Competition Act 2002 in respect of vertical agreements and concerted practices provided that certain conditions are satisfied. The above is sufficiently broadly defined to include agreements such as franchise and distribution agreement involving the communication of intellectual property and trade secrets. In addition, the Irish Notice on Vertical Restraints sets out the Irish Competition Authority’s (hereinafter also “ICO”) current thinking on vertical agreements and the circumstances in which they will not be regarded by the Irish Competition Authority as infringing the prohibition on restrictive agreements and practises in Section 4 (1) of the Competition Act 2002. The above notice covers agreements such as franchise and

66

distribution agreement involving the communication of intellectual property and trade secrets. A.2 Definition of trade secrets

There is no specific definition of a “trade secret” in Ireland. For the generally accepted notion of trade secret, please refer to the Commercial and IP Chapter. A.3 Applicability of EU competition law principles

The Competition Authority and Irish courts do take into account the decisional practice of the European Commission, and Irish competition law shall be interpreted in accordance with the principles of the European Community Competition Law. Similarly, the Commission’s decisions together with the judgements of EU Tribunals concerning the applicability of Articles 101 and 102 of the Treaty will impact on the conclusions that the Competition Authority and Irish courts will draw when assessing agreements or abuses of dominant position. This implies that European block exemption regulations, such as the Commission Regulation (EU) No. 772/2004 on the application of Article 81(3) of the Treaty to categories of technology transfer agreements (“TTBER”) does also apply. A.4 Decisional practice of the Competition Authority

The only examples of Irish Competition Authority’s decisions relating to trade secrets relate to cases where non-compete clauses have been accepted as ancillary in the context of mergers notified to it under Part 3 of the 2002 Act in order to protect know-how. In particular: 3I/Alpharma Determination of the Competition Authority March 13 2008 M/08/004 - In this case, the Authority reviewed the proposed acquisition of the active pharmaceutical ingredients business of Alpharma Inc. by 3i Group plc. The duration of the non-compete covenants was expressed to be for three years, which the parties submitted was directly related and necessary to the implementation of the transaction due to the highly technical nature of the pharmaceutical sector in which Alpharma was active. The parties stated that a three-year duration was necessary in order to guarantee the transfer of significant and valuable know-how developed by Alpharma, and that such a time duration was consistent with the Ancillary Restraints Notice. The Competition Authority considered that all non-compete obligations in this case were directly related and necessary to the implementation of the proposed transaction. Eurocopter/McAlpine Determination of the Competition Authority October 18 2007 M/07/058 – a three-year non-compete restriction was considered to be directly related and necessary because it protected the value of the goodwill and confidential know-how of McAlpine, which the purchaser was acquiring. The McAlpine business was considered to be reliant on the development and retention of significant and valuable confidential know-how regarding the market for civil helicopters, specifically regarding customer preferences and individual specifications sought by McAlpine customers. A three-year non-compete restriction was accepted by the Authority as necessary to maintain the integrity of the transferred McAlpine business. VION/Oerlemans Determination of the Competition Authority October 10 2007 M/07/053 – The Competition Authority accepted a three-year non-compete restriction on the vendor (together with its employees and associated parties) in respect of the market on which the vendor was active because intangible assets like goodwill and know-how were

67

being transferred, and the duration of the non-compete was necessary to guarantee the full value of the assets to be transferred. Barclays/Gardman Determination of the Competition Authority 10 January 2008 M/07/071 - a non-compete obligation of two-year and 11-month duration placed on one of the vendors was held to be directly related and necessary to the implementation of the transaction. The vendor in question was obliged not to canvass, solicit or approach any relevant customer for the supply of specified products or services. The non-compete obligation was accepted by the Competition Authority as ancillary as it protected the value of the goodwill and confidential know-how of the target. Hibernian/Vivas Determination of the Competition Authority 28 April 2008 M/08/013 – The Competition Authority accepted a non-compete obligation, the duration of which was redacted from the public determination. It was held to be directly related and necessary to the implementation of the transaction in order to protect the value of Vivas’ goodwill and confidential know-how. The authority pointed out the importance of such protection given the development of Vivas’ products from its “specialist know-how and given the associations of the parties involved with the Vivas brand”. MMC/HIBL Determination of the Competition Authority 10 February 2010 M/10/001 – The Competition Authority accepted as necessary non-compete and “non-solicitation obligations” for a period of three years from the completion date.

Clondalkin/Catalent Determination of the Competition Authority 25 March 2011 M/11/008 – The Competition Authority accepted four year non-compete and "non-solicitation” obligations as ancillary, given the “specific nature of the proposed transaction”, the retention of certain know-how by the vendor and the contemplated continued relationship between the vendor and the purchaser post-completion. A.5 Civil court judgements

No decisions rendered by civil courts dealing with competition law issues involving trade secrets have been retrieved. A.6 Inadequacies and need for a European harmonised and common


As above outlined, Irish competition law is not designed to protect trade secrets as such and only provides limited protection in very specific contexts. In any event, a European harmonized and common legislation on trade secrets would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights. B. POWERS OF THE ICO AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of ICO investigations

The Competition Authority initiates proceedings for a violation of competition law ex officio. Accordingly, a complaint is not required. The right for action is provided to the Competition Authority by Section 14 (2) of the Competition Act 2002. Furthermore, a court may grant an injunction on foot of a motion of the Competition Authority to

68

enforce compliance with the terms of a commitment, a determination or an order. In addition, Section 26 (8) gives the Competition Authority the power to bring summary proceedings in relation to an offence under that Section of the Competition Act 2002. B.2 CPO sanctioning powers

For any breach of European or Irish competition law, the Competition Authority has the right to seek a criminal prosecution, or to pursue the matter in civil courts, or both. In relation to civil matters, pursuant to Section 14 (2) of the 2002 Act, the Competition Authority has a right of action in respect of an agreement, decision or concerted practice or an abuse which is prohibited under Section 4 or Section 5 of the 2002 Act or by Articles 101 and 102 of the TFEU. In relation to criminal matters, summary offences may be prosecuted by the Competition Authority pursuant to Sections 8 (9) and 8 (11) of the 2002 Act. B.3 Powers to carry out inspections

The Competition Authority can carry out inspections, search premises and computer systems in order to acquire information in relation to an alleged competition law infringement pursuant to a warrant issued by the District Court to the Competition Authority under Section 45 of the 2002 Act. B.4 Rules protecting trade secrets from disclosure in the course of ICO

proceedings

Save in certain circumstances, such as court proceedings, Section 32 of the 2002 Act provides that a person shall not disclose information that: (a) comes into the possession of the Authority by virtue of the exercise by it of its

powers under this Act to obtain information; or (b) comes into the possession of the Authority in the course of a meeting of the

Authority held in private at which he or she is present. Furthermore, the Competition Authority has the right to seek a criminal prosecution or to pursue the matter in the civil courts or both. The court can put in place measures to protect the secrecy of the information, and in particular, it can order that only a certain number of people can view the particular trade secret in the discovery process and allow certain documents to be redacted. Hearings are conducted in public by virtue of the constitution save in exceptional circumstances. B.5 Possibility for the claimant to participate in the proceedings

Claimants may participate in proceedings before the courts. B.6 Interim measures

The Irish Competition Authority is not empowered to confer mandatory interim relief. However, a court application can be made for interim relief aimed at preventing serious and irreparable harm to competition pending the investigation. Conceivably, the court could order the disclosure of trade secrets (e.g., in the form of order to grant a licence).

69

B.7 Dealing with issues requiring specific technical knowledge

In case of issues requiring a specific technical knowledge, expert testimony can be given to the court. B.8 Average duration of the proceedings

The average duration of proceedings depends on whether the proceedings are criminal or civil. Civil proceedings could take between 12 and 18 months. B.9 Rights of appeal against ICO decisions

Section 15 of the 2002 Act states that an appeal can be made to the High Court. Such an appeal should be made to the High Court within 28 days after the date of the publication of the notice in relation to the declaration or such greater period as the High Court may specify on application being made to it. On the hearing of an appeal, the High Court may confirm, amend or annul the declaration concerned. The High Court may also order that a decision of the Competition Authority shall not have effect pending the hearing and determination of the appeal. C. CIVIL LITIGATION


There are no significant differences between Irish general civil litigation and civil litigation concerning competition law violations.


70

ITALY



Italian Law No. 287/1990 (“Competition Act”) does not contain any substantive provision specifically referring to trade secrets. In Italy, specific protection to trade secrets is granted under IP law, unfair competition law and criminal law. However, the general provisions contained in the Competition Act and relating to illicit agreements/concerted practices (Article 2 of the Competition Act) and abuses of dominant position (Article 3 of the Competition Act) may apply also to situations relating to the licensing, disclosure of (or refusal to disclose) trade secrets. Furthermore, like other national competition authorities and national courts within the European Union, the Italian Competition Authority (“ICA”) and Italian Courts have the power to enforce Article 101 and Article 102 of the TFEU. In this respect, Italian competition law – likewise EU competition law – may impact on trade secrets, but only in circumstances where the use of (or refusal to transfer) trade secrets have an impact on competition, which is the final object of competition law protection. A.2 Definition of trade secrets

As a general remark, scholars have stressed the difficulties in identifying what sort of information can qualify as trade secret, since the concept of information has no conceptual boundary, and trade secrets are sometimes lumped in with “know-how”. The Competition Act does not provide for a definition of trade secrets. Furthermore, in Italy, application of competition law has not led to decisions or judgements clearly dealing with trade secrets strictu sensu, i.e., secrets corresponding to patent entitlement situations, and in particular when a new and original solution – able to have concrete embodiments in the industrial field such as to bring progress with respect to existing techniques and knowledge (extrinsic novelty) and to express a creative activity on the part of the inventor – is bound to a technical problem. The very limited decisional practice and jurisprudence available in Italy – which, however, never enters into the definition of trade secrets – does instead deal with a general concept of know-how and with the concept of competitively sensitive information (i.e., information relevant to unveil the commercial strategy of the company: in general, sensitivity of information depends on whether or not that information would normally be regarded as business secret), which are notions that appear broader than the core of trade secrets as above indicated and also broader than the concept of technical-industrial information, but that may nonetheless fall within the definition of trade secrets provided by Article 98 of the Italian Code of Industrial Property. In this respect, please refer to the Commercial and IP Chapter. This chapter will accordingly refer to a broad concept of trade secrets, which is in line with the available indication, mainly provided by the ICA and with the provisions of Article 98 of the CIP. A.3 Applicability of EU competition law principles

The ICA and Italian courts do take into account the decisional practice of the European Commission, and Italian competition law shall be interpreted in accordance with the principles of the European Community competition law. This implies that, in relation to

71

the applicability of Article 2 of the Competition Act and Article 101 of the TFEU, the ICA does apply in reviewing agreements involving the transfer of know-how and the EU Transfer of Technology Block Exemption Regulation of 2004 (“TTBER”). Similarly, the European Commission’s decisions – together with the judgements of EU Tribunals – concerning the applicability of Articles 101 and 102 of the TFEU will definitely impact on the conclusions that the ICA and Italian courts will draw when assessing agreements or abuses of dominant position concerning trade secrets. A.4 Decisional practice of the Italian Competition Authority

Scholars have indicated that the antitrust treatment of trade secrets has remained largely hidden and that there has been little separate focus on the competition problems that trade secrets may present. It is worth noting that the decisional practice of the ICA does not expressly enter into the notion of trade secrets, and more in general the expression “segreto industriale” can be hardly found when reviewing the decisional practice of the ICA - only nine ICA decisions, eight of which relate to concentrations. The ICA has indeed focused on the notion of “competitively sensitive information”, which has, however, come into play mainly in decisions relating to violations of the prohibition to enter into agreements restricting competition – the exchange of sensitive information as per se violation or as evidence of the existence of horizontal agreements to fix prices or share the market – and on the concept of “know-how”. The ICA has never adopted any decision considering as illicit vertical agreements involving the transfer of know-how. As far as agreements ancillary to concentrations are concerned, the ICA does apply the Commission Notice on restrictions directly related and necessary to concentrations (“Notice on Ancillary Restraints”). However, the most relevant issue relates to the decisions dealing with unilateral behaviours by dominant undertakings pursuant to Article 3 of the Competition Act or Article 102 of the TFEU. To start with, no decision expressly identifies as abusive situation where a dominant undertaking has obtained from its weaker contractual counterparties information or know-how that may qualify as trade secrets. In a case relating to an abuse of dominant position the ICA, even though recognising that the dominant undertaking has benefitted from its competitors’ know-how due to the contractual relations with the latter, did not develop this point further and focused on other abusive (exclusionary) conduct of the dominant company (Posta Elettronica Ibrida, decision No. 15310 of 29 March 2006). Italian competition law has played a more active role in obliging dominant undertakings to grant access to certain information or know-how. In the Sapec Agro/Bayer Helm decision (decision No. 22558 of 28 June 2011), the ICA dealt with the refusal by a dominant undertaking to grant access to its competitors to two medical studies on the effects on men and environment of a certain active ingredient for a fungicide. The ICA, in assessing the case, stressed that it was not possible to duplicate the studies due to applicable laws, and followed the steps recognised by EU Competition law to apply the essential facility doctrine. In particular, the ICA evaluated (i) whether the two studies were or not duplicable; (ii) the absence of any alternatives on the market; (iii) the link between the refusal and the incentives for competitors to innovate (citing in this regard the EU Microsoft case); (iv) the existence of objective justification to the refusal; and (v) the elimination of competition and harm to consumers. It is worth mentioning that the

72

ICA expressly made reference to the EU approach, stating that such approach provides for a high level of competition protection, which may prevail on the protection of IP rights when balancing such two aspects (citing in this regard the EU Magill, Microsoft and IMS cases). The decision has been however annulled by the competent administrative court, which confirmed the principles expressed by the ICA, but contested that the medical studies were not duplicable. Other cases relating to the refusal to disclose information appear more peculiar, since they are strictly related to the monopolistic position of the dominant undertaking, due to exclusive licences or provision of a service of public interest. In two of these cases (Comune di Prato – Estra Reti Gas, Decision No. 23243 of 25 January 2012; Comuni Vari – Espletamento Gare Affidamento Servizio di Distribuzione Gas, decision No. 23114 of 14 December 2011), relating to the distribution of gas in Italian municipalities, the ICA considered as an abuse of dominance the refusal by undertakings enjoying a monopoly in the provision of a service of public interest to disclose certain confidential information to Italian municipalities - information mainly concerning the value of the distribution infrastructure, the volume of distributed gas and the list of clients. Specific reference was made to the fact that the information not disclosed by the dominant undertakings was necessary to the municipalities in order to draft a call for tender not penalising the incumbents’ competitors, and had been acquired and developed by the incumbents due to their monopoly position. It should be noted that, during the investigation, the ICA requested clarifications from the Ministry of Economic Development and to the Italian Energy Authority in order to verify to what extent the refusal by the dominant undertakings would have prevented the possibility for the involved municipalities to prepare a call for tender not penalising (in a way, to make it impossible to compete) the dominant undertakings’ competitors. Emphasis was also given to the fact that it was not possible to replicate such information. Another case (Giochi24-Sisal, decision No. 22301 of 13 April 2011) related to the refusal by the dominant undertaking (exclusive licensee for the managing of numerical games in Italy) to provide competitors with information necessary to have their Virtual Point of Sales (Punti Vendita a Distanza) communicating with the server used to collect bets for numerical games. The case was closed with the ICA making binding commitments proposed by the dominant undertaking; accordingly, the final decision did not evaluate whether, and under which circumstances, the behaviour constituted a violation of competition law. However, the commitments proposed by the dominant undertaking did – in a way compatible to the legislation regulating the sector – provide the possibility to communicate with the server. A.5 Civil court judgements

The Italian civil courts have never dealt with competition law issues involving trade secrets. A.6 Inadequacies and need for a European harmonised and common


As mentioned, Italian competition law protects competition, and trade secrets might be of relevance – only under certain exceptional circumstances – when their exercise (or the refusal to disclose them) illicitly restricts competition. Accordingly, impacts of competition law on trade secrets could very rarely apply.

73

However, the current wording of the Code of Industrial Property, which apparently confers to trade secrets the vest of full property rights (even though such conclusion has been mitigated by recent jurisprudence - please refer to the Italian Chapter on Commercial and IP law) poses a problem that is stressed by scholars: once a trade secret reaches the status of a full property right, any antitrust interference which may be deemed appropriate when an IPR is challenged should be available also when the exercise of a trade secret might be seen as a decisive factor of market foreclosure. In this respect, a European harmonised and common legislation on trade secrets (which would not obviously directly impact on national competition laws) may solve to a certain extent such problem, avoiding different approaches at the national level towards the applicability of competition law – and in particular, of provisions prohibiting abuses of dominant position – in respect to trade secrets. Nevertheless, the approach that the ICA and other NCAs (and obviously the European Commission) will take toward possible abuses of dominance carried out by refusing to disclose a trade secret will play a very significant role. Furthermore, the possible tensions between competition law and IP rights that have been identified by scholars in relation to the application of EU competition law – in particular indicating that the application of antitrust rules may impact on incentive to innovate and may not take into due consideration possible consumer harm – may also be detected in relation to the application of Italian competition law. B. POWERS OF THE ICA AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of ICA investigations

The ICA can start investigations for suspected breach of Italian or EU competition law on its own initiative and upon a complaint by any interested third party (including consumer or trade associations, administrative authorities, competitors, customers, or individuals, e.g., former employees). An investigation can also stem from a leniency application submitted by an undertaking involved in a restrictive agreement/concerted practice - not applicable in abuse of dominance cases and vertical agreements in restraint of competition. B.2 ICA sanctioning powers

If the ICA, as a result of an investigation, finds a breach of Italian or EU competition law it orders the unlawful conduct(s) to be brought to an end (if still ongoing) and, in cases of serious breaches, having regard of the gravity and duration of the infringement(s), may impose administrative fines of up to 10% of the turnover of the undertaking involved. Alternatively, the ICA can accept and render binding commitments submitted by the party(ies). Individuals are not liable under Italian competition law. Moreover, in Italy, there are no criminal sanctions for breaches of competition law. B.3 Powers to carry out investigations

Within the context of competition law investigations, the ICA has the power to: (a) carry out on-the-spot investigations at the premises of the undertakings

suspected of being involved in the allegedly unlawful conducts and/or third parties. During raids, the ICA has the power to access/search all premises of the

74

undertaking (including vehicles used by employees, but not private homes), and can copy any document, in whatever format, held by the undertaking; and

(b) request oral clarifications on the subject matter of the investigation during the

raids Furthermore, the ICA may also request information and documents relevant to the case of the undertakings under investigation and/or any third party and require submission of expert reports/testimony (e.g., economic analysis) on the subject matter of the investigation. B.4 Rules protecting trade secrets from disclosure in the course of ICA

proceedings

Under the relevant rules of procedure concerning ICA competition law investigations (Presidential Decree No. 217 of 30 April 1998, “Presidential Decree”), all the information acquired during the proceedings - including trade secrets - must be used only for the purposes for which it was requested, must be treated as confidential and cannot be divulged, even to government departments and authorities. Pursuant to the provisions of Article 13 of the Presidential Decree, whenever the documents in the case file (including those submitted by the parties on a voluntary basis, e.g., leniency applications, and those acquired by the ICA in the exercise of its powers of investigation) contain personal, commercial, industrial and financial information of a confidential nature, right of access by third parties - claimants, other parties under investigation, etc. - may be limited. Parties wishing to safeguard the confidentiality or secrecy of the information collected or submitted during an investigation must submit a request to the ICA specifying the reasons for that request. The ICA will not allow access by third parties to documents containing trade secrets and other confidential information. Notwithstanding the above, the described principles of protection of confidential information must be balanced with the ICA’s need to expressly mention certain information in its decisions in order to clarify its reasoning and the grounds for its conclusions in law, and with the right of third parties to participate in the proceedings fully exercising their rights of defence. Accordingly, where confidential information or business secrets constitute or are included in evidence of the infringement or contains essential information for the defence of the undertaking under investigation, access to that confidential information that is essential for defence purposes could generally be granted. Access to said information would be permitted, wholly or partly, only to the extent that is strictly necessary to enable representations by third parties to be made in respect of that information. It is worth noting that the administrative courts have in several occasions stressed that only in exceptional circumstances (which have not occurred yet in practice) is it possible to allow parties participating in proceedings to have access to secret information of other parties, since normally, the disclosure of secret information is not necessary to ensure equality of arms within the proceedings (Consiglio di Stato, judgement No. 03601/2010).

75


Claimants, as well as any third party representing public or private interests that might be directly, immediately and presently damaged by the subject matter of the investigation or by any measures adopted as a result of it, can participate in the proceedings for the enforcement of Italian and EU competition law. In order to participate in investigations for restrictive agreements/abuses of dominance, third parties must submit reasoned requests to intervene within 30 days from the date of publication in the ICA Bulletin of the commencement of the investigation. Third parties admitted to participate in the proceedings have the right to access the documents of the ICA file, file written submissions, documents, arguments and opinions, as well as further representations, and to participate in hearings. B.6 Interim measures

Pending the investigation, the ICA may issue interim measures aimed at preventing serious and irreparable harm to competition. As a consequence, the ICA may also order the disclosure of trade secrets (e.g., in the form of order to grant a licence). B.7 Dealing with issues requiring specific technical knowledge

The ICA may request information or advices to technical experts, in case of need. Furthermore, several economists serve within the ICA in order to analyse the economic implications of the cases under review. B.8 Average duration of the proceedings

The duration of the ICA proceedings depends on several circumstances, such as the number of the parties involved, the number of documents in the ICA file of the case, and the complexity – from a juridical and technical point of view – of the case. Considering the foregoing, the average duration of proceedings may be estimated in approximately 18 months. B.9 Rights of appeal against ICA decisions

The decisions of the ICA can be appealed to the regional Administrative Court of the Lazio Region (Tar Lazio), which has the power to annul those decisions on points of law. Appeals must be notified to the ICA within 60 days from the time the appealing party was notified of the ICA's decision. The filing of an appeal with the Tar Lazio does not per se suspend the enforceability of the decision, although the appellant can file a petition for its interim suspension. Tar Lazio's decisions can be appealed to the Supreme Administrative Court (Consiglio di Stato) within 30 days from the date on which the appealing party was notified of the Tar Lazio's decision.

76

C. CIVIL LITIGATION


There are no differences between general litigation and litigation relating to competition law violations. However, some peculiarities exist in relation to damages actions following a violation of competition law. Following the recent entrance into force of Italian Decree No. 1/2012, private enforcement actions stemming from violations of Italian competition law - due to the provision contained in Article 33 of the Competition Act - and from violations of EU competition law must be filed before the Specialized Sections of the 1st degree Tribunal having territorial jurisdiction. First instance, determinations may be then appealed to the Specialized Sections of the Court of Appeal having territorial jurisdictions, on either the law or merits of the case. Court of Appeal judgements can be challenged before the Corte di Cassazione (Court of Cassation), but not on the merits of the case. Such appeals can be brought based only on breach of the rules concerning jurisdiction and/or a point of law. This solution is welcome since it brings under the jurisdiction of specialised courts issues that were previously regulated by the general principles on jurisdiction. In such a way, at least as far as civil litigation is concerned, judges’ specialisation will ensure a consistent and adequate level of protection, taking also into account that specialised courts also have jurisdiction on litigation relating to IP rights.

Relevant Literature • GHIDINI, G., FALCE, V., “Upgrading trade secrets as IPRs: a recent break

through in Italian IP law”), Rivista di diritto d'autore, No. 79, issue 2, 2008 • FRANCHINI STUFLER, B., “Studi sull’evoluzione economica e giuridica del know-

how e della sua tutela”, Rivista di diritto industriale, No. 6, 2005 • FAELLA, A., “Il caso Merck”, Mercato concorrenza regole, No. 3, 2006 • FALCE, V., “Profili pro-concorrenziali dell'istituto brevettuale”, Giuffrè, Milano,

2008 • FIRST, H., “Trade secrets and antitrust law”, in Rochelle C. Dreyfuss, Katherine J.

Strandburg (eds.), "The law and theory of trade secrecy. A handbook of contemporary research", Edward Elgar Publishing, Cheltenham UK, Northampton MA USA, 2011

• CZAPRACKA, K. A., "Antitrust and trade secrets: the US and the EU approach",

24 Santa Clara Computer & High Tech. L.J. 207, 2008 • PARDOLESI, R., RENDA, A., “The European Commission's case against Microsoft:

Kill Bill?", 27 World Competition 513, 2004

77

• PARDOLESI, R., RENDA, A., “Kill Bill Vol. 2”, Mercato concorrenza regole, No. 3, 2007

• CHANG, H., EVANS, D., SCHMALENSEE, R., "Has the consumer harm standard

lost its teeth?", in Robert Hahn (Ed.), "High-Stakes antitrust. The last Hurrah?", AEI-Brookings Joint Center for Regulatory Studies, 2003

• DREXL, J., “Refusal to Grant Access to Trade Secrets as an Abuse of Market

Dominance”, in Steven Anderman, Ariel Ezrachi (Eds.), Intellectual Property and Competition Law - New Frontiers, Oxford: Oxford University Press 2011

• Paolo Auteri, “Commento al nuovo art. 6bis l. invenzioni”, nel Commentario al

d.lgs.19 marzo 1996, n. 198, in Le Nuove Leggi Civ. Comm., 1998, 124. • Paolo Auteri, Giorgio Floridia, Vito Maria Mangini, Gustavo Olivieri, Marco Ricolfi,

Paolo Spada, “Diritto industriale. Proprietà intellettuale e concorrenza”,Giappichelli, Torino, 3° ed., 2009.

• Aldo Frignani, “Segreti di impresa”, in Digesto comm., XIII, 1997. • Cesare Galli, “Codice della Proprietà Industriale: la riforma 2010”, IPSOA, 2010. • Massimo Scuffi, Mario Franzosi, Aldo Fittante, “Il Codice della proprietà

industriale”, CEDAM, Padova, 2005. • Luigi Carlo Ubertazzi, “Commentario breve alle leggi su proprietà intellettuale e

concorrenza”, CEDAM, Padova, 4°, 2007. • Adriano Vanzetti, Vincenzo Di Cataldo, “Manuale di diritto industriale”, Giuffrè,

6°, 2009.

78

JAPAN



The Act on Prohibition of Private Monopolization and Maintenance of Fair Trade ("Anti-Monopoly Act") does not provide any competition law provision specifically related to trade secret. In Japan, trade secrets are protected under the Unfair Competition Prevention Act (please refer to the Commercial and IP Chapter). However, it cannot be excluded that the use of trade secret or forcing disclosure of trade secret may fall within the scope of either "private monopolization" or "unreasonable restraint of trade" which are prohibited, respectively, by Article 2 (5) and Article 2 (6) of the Anti-Monopoly Act. Under Article 2 (5), the term "private monopolization" means such business activities, by which any entrepreneur, individually or by combination or conspiracy with other entrepreneurs, or by any other manner, excludes or controls the business activities of other entrepreneurs, thereby causing, contrary to the public interest, a substantial restraint of competition in any particular field of trade. Under Article 2 (6), the term "unreasonable restraint of trade" means such business activities, by which any entrepreneur, by contract, agreement or any other means irrespective of its name, in concert with other entrepreneurs, mutually restrict or conduct their business activities in such manner as to fix, maintain, or increase prices, or to limit production, technology, products, facilities, or counterparties, thereby causing, contrary to the public interest, a substantial restraint of competition in any particular field of trade. However, there is no leading case where competition issues are argued over activities related to trade secrets. A.2 Definition of trade secrets

The Anti-Monopoly Act does not define trade secrets. Furthermore, the Japan Fair Trade Commission ("JFTC") has never dealt with the issue of trade secrets. Accordingly, there is no accepted definition of trade secrets within the context of competition law. For the notion of trade secrets accepted under Japanese law, please refer to the Commercial and IP Chapter. A.3 Applicability of EU competition law principles

The principles of EU competition law are not applicable in Japan. A.4 Decisional practice of the Japanese Fair Trade Committee

The JFTC has not issued, to our knowledge, any decisions on substance regarding trade secrets. A.5 Civil court judgements

Japanese civil courts have not dealt with competition law issues regarding trade secrets.

79


Since there is no decisional practice in relation to the application of substantive competition law provisions to trade secrets, it is not possible to identify possible inadequacies of the system. B. POWERS OF THE JFTC AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of JFTC investigations

If any transaction or other activity fall within the scope of the Anti-Monopoly Act and is suspected to violate the Anti-Monopoly Act, the JFTC can initiate proceedings at its discretion without a complaint. B.2 JFTC sanctioning powers

The JFTC can issue (i) surcharge payment order against those who committed certain types of violation of the Anti-Monopoly Act, and (ii) cease-and-desist order against those who committed any type of violation of the Anti-Monopoly Act. The surcharge is determined based on the infringing party’s sales of the product subject to breach, on the type of violation, on duration of the violation itself, on the level in the distribution chain where the breach took place and on whether the infringing party is a SME. In addition to the administrative sanctions enforced by the JFTC, the Anti-Monopoly Act provides the following criminal charges for unfair restraint of trade and private monopolisation: For individuals: • imprisonment with work up to five years; or • a fine of up to JPY5 million. For companies: • a fine of up to JPY500 million B.3 Powers to carry out inspections

The JFTC, when investigating possible violations of the Anti-Monopoly Act, is authorised to enter any business office of the persons concerned with a case or other necessary sites, and inspecting conditions of business operation and property, books and documents, and other materials. Furthermore, the JFTC can order persons holding books and documents and other materials to submit such materials. When the JFTC conducts the on-site inspection, it has to present a notice to concerned parties which shall indicate the name of the case, outline of alleged violation of Anti-Monopoly Act and the relative statutes.

80

B.4 Rules protecting trade secrets from disclosure in the course of JFTC proceedings

In the course of a hearing procedure pertaining to the cease-and-desist order or surcharge payment order, any interested person may request the disclosure of relevant documents against the JFTC. However, pursuant to Article 70-15(2) of the Anti-Monopoly Act, the JFTC may reject such a request if the requested disclosure is likely to harm business operators. Such harm may also depend on the possibility of disclosing secret information. B.5 Possibility for the claimant to participate in the proceedings

Third parties (including the claimant) do not have the right to participate in the procedure of enforcement by the JFTC against the violation of the Anti-Monopoly Act. However, the JFTC has the authority to permit interested parties to participate in the hearing proceedings (i.e., adjudicative procedure before the trial body of the JFTC) pertaining to the cease and desist order or surcharge payment order (Article 70-3 of the Anti-Monopoly Act). B.6 Interim measures

Pursuant to Article 70-13 of the Anti-Monopoly Act, the JFTC can request the Tokyo High Court to issue an Urgent Order. When an Urgent Order is issued, the subject business operator has to temporarily suspend the act, which is suspected to constitute the violation of the Anti-Monopoly Act. B.7 Dealing with issues requiring specific technical knowledge

Not available B.8 Average duration of the proceedings

Not available B.9 Rights of appeal against JFTC decisions

Decision of the JFTC may be appealed. C. CIVIL LITIGATION


The proceedings concerning the violation of the Anti-Monopoly Act relate to (i) administrative orders issued by JFTC, and (ii) civil remedies. With specific reference to civil remedies, under Article 24 and 25 of the Anti-Monopoly Act, plaintiff can claim injunction of the violation of certain rules on Anti-Monopoly Act and/or claim compensation for damages caused by a violation of the Anti-Monopoly Act against the infringer. Even though, from a procedural prospective, such litigation does not in principle differ from general litigation, the Anti-Monopoly Act provides, in Articles 83-2 through 84-2, specific rules applicable to civil litigation based upon Article 24 and

81

25 of Anti-Monopoly Act, mainly relating to the issuing by courts of measures aimed at the suspension or prevention of infringements of the Anti-Monopoly Act.

Relevant Literature Not available

82

LATVIA



Besides provisions regarding unfair competition, Latvian Competition Law does not contain any provisions specifically referring to the protection of trade secrets. The general provisions regarding prohibited agreements and arrangements (having as their object or effect the hindrance, restriction or distortion of competition in the territory of Latvia may, however, apply also to situations relating to the disclosure of trade secrets. For instance, certain communication between market participants (potentially also communications of trade secrets) may be recognised as prohibited concerted practices should the information disclosed be used to foreseen activities of other players in the market, thus restricting competition. Moreover, the general prohibition of abuse of dominant position may also apply to cases relating to trade secrets. For instance, as regards the refusal by a dominant undertaking to disclose certain information or to licence a trade secrets, it could theoretically be possible that such undertaking is held liable for abusing its dominant position. A.2 Definition of trade secrets

There is not one unified definition of trade secrets referable to all situations provided either by the Competition Law or otherwise. Although there are several laws providing the explanation of trade secrets (please refer to the Commercial and IP Chapter), the Competition Council normally refers to commercial information or to commercially significant data of market participants. However, the Competition Council has never specifically defined “commercial information” or “commercially significant data of a market participant” within its decisions. A.3 Applicability of EU competition law principles

Generally, the principles of EU competition law and decisions of the European Commission are applicable in Latvia. Furthermore, the Competition Council is entitled to apply EU competition law. The Competition Council makes within its decisions references to the principles of EU law and decisions of both the European Commission and the European Court of Justice. A.4 Decisional practice of the Latvian Competition Council

There is no decision of the Competition Council which specifically relates to violation of competition law concerning trade secrets. A.5 Civil court judgements

There is no court case law which specifically relates to violation of competition law concerning trade secrets.

83


The aim of Competition Law is to protect, maintain and develop a free, fair and equal competition in the interests of the public in all economic sectors by restricting market concentration, imposing as a duty the termination of activities prohibited by the regulatory enactments governing competition, and by calling to account persons at fault in accordance with procedures prescribed by regulatory enactments. Accordingly, the application of competition law is related only to the use of trade secrets under certain circumstances, but it is not rendering the protection to such information in general. Besides, as noted above, there is not one unified definition of trade secrets referable to all situations provided either by the Competition Law or otherwise. With regard to a European harmonised and common legislation specifically concerning trade secrets, such legislation may be feasible and positive in order to have clarity at least on the notion and nature of trade secrets, and accordingly on the standard of intervention of competition law in trade secrets. B. POWERS OF THE COMPETITION COUNCIL AND PROTECTION OF TRADE



The investigation of a possible violation of the Latvian and/or EU competition law can be initiated on the basis of a third party’s submission, on the basis of an initiative from the Competition Council or the basis of a report from another institution - Article 22 and Article 28 of the Competition Law. B.2 Competition Council sanctioning powers

In case a prohibited agreement is ascertained, the Competition Council can impose legal obligations to restore competition and fines - Article 12 Part 1 of the Competition Law. In particular, the Competition Council is entitled to impose: • on market participants that are not competitors: fines of up to 5% of their net

turnover for the previous financial year each, but not less than LVL250 each; • on market participants that are competitors: fines of up to 10% of their net

turnover for the previous financial year each, but not less than LVL500 each. In case an abuse of dominant position is ascertained, the Competition Council can impose legal obligations to restore competition and fines up to 5% of their net turnover for the previous financial year each, but not less than LVL250 - Article 13 Part 2 of the Competition Law. B.3 Powers to carry out inspections

The Competition Council is entitled, on the basis of a decision of court, without prior notice and in the presence of police, to enter the “non-residential premises” (i.e., means of transport, flats, structures and other immovable and movable objects that are in the ownership, possession or use by a market participant or by an association of market participants), to open them and the storage facilities existing therein, carry out a forcible search of the objects and the storage facilities therein and perform an inspection of the

84

existing property and documents therein including the data stored on computers, floppy disks and other data stored in an electronic information system.

Furthermore, the Competition Council is entitled, on the basis of a decision of court, if there are justifiable grounds for suspicion that documents or property items that might serve as evidence of a violation of the law are being stored in non-residential premises, means of transport, flats, structures and other immovable and movable objects in the ownership, possession or use of other persons, perform in relation to such persons the above activities in the presence of police. B.4 Rules protecting trade secrets from disclosure in the course of


The Competition Law includes specific provisions to protect the information provided to the Competition Council. In particular, pursuant to Article 26 of the Competition Law, the Competition Council can restrict access to certain information in case the party submitting such information indicates the reasons that would justify a restriction. The Competition Council may require the party to submit a general summary of the relevant information, to which the status of restricted access information shall not be assigned. B.5 Possibility for the claimant to participate in the proceedings

As a matter of fact, the Competition Law does not set forth any specific conditions to be complied with in order to participate in the Competition Council proceedings. Thus, a requesting party may access the materials of the case, unless the Competition Council has decided that such an access may have a negative effect on the performance of its tasks - Article 26 Part 6 of the Competition Law. The Competition Council does not have the duty to make materials of the case accessible if this may have a negative effect on the performance of its tasks. The participants in the proceedings may become acquainted with the case, express their own opinions and submit additional information within 10 days from the moment of receipt of the above notification from the Competition Council. The Competition Council does not have to take into account information which has been received after the end of such time period - Article 26 Part 7 of the Competition Law. B.6 Interim measures

If the Competition Council has evidence at its disposal testifying the possible violation of competition law, and non-termination of this violation may cause significant and irreversible harm to competition, it may take a decision adopting interim measures. Such a decision imposes a duty upon market participants to perform and/or discontinue specific activities within a specified time period. B.7 Dealing with issues requiring specific technical knowledge

It is the discretion of the Competition Council whether or not to involve more qualified personnel such as, for example, experts. B.8 Average duration of the proceedings

Pursuant to Article 27 of the Competition Law, the Competition Council has to adopt its decision within six months from the day in which the case is initiated. However, if, due

85

to objective reasons it is not possible to observe such time period, the Competition Council may extend it up to further 18 months. B.9 Rights of appeal against Competition Council decisions

The decisions of the Competition Council, except for decisions regarding the initiation of a case and the extension of the time period for taking of a decision, may be appealed to the Regional Administrative Court within one month from the day when such decision came into effect. C. CIVIL LITIGATION


There are no differences between general litigation and civil litigation relating to violations of the Competition.

Relevant Literature • CAIKA, T., “Komercnoslēpuma aizsardzības: tiesības vai pienākums?”, SALDO, 8

March 2012

86

LITHUANIA



Although the Law on Competition (Law 23 March 1999, No VIII-1099, as amended) contains rules on protection of commercial secrets, they are related to prohibition of unfair competition. In Lithuania, specific protection for trade secrets is granted under civil law, unfair competition law and criminal law. However, the general provisions contained in the Law on Competition and relating to prohibited agreements and abuse of dominant position may apply also to situations relating to licensing, disclosure of (or refusal to disclose or licence) trade secrets. Enforcement of these competition law provisions (e.g., requiring the dominating undertaking to disclose or license commercial secrets, prohibition of licensing of secrets) would be possible only in cases where violations of restrictions on abuse of dominant position are established or when prohibited agreement is concluded. A.2 Definition of trade secrets

The Law on Competition does not provide any definition of trade secrets. The competition authorities usually refer to the definition of trade secrets as it is provided in the Civil Code of Lithuania. For further details, please refer to the Commercial and IP Chapter. A.3 Applicability of EU competition law principles

Both national courts, especially the Supreme Court, and state authorities – including the Competition Council - do take into account decisions and principles of the EU institutions and case law of the European Court of Justice. A.4 Decisional practice of the Lithuanian Competition Authority

There is no decision of the Competition Council which specifically relates to competition law violations involving trade secrets. A.5 Civil court judgements

There is no court case law which specifically relates to competition law violations involving trade secrets. A.6 Inadequacies and need for a European harmonised and common


The provisions of Lithuanian law protecting competition apply in relation to trade secrets only under certain exceptional circumstances – when their exercise (or the refusal to disclose them) illicitly restrict competition. Accordingly, competition law could very rarely apply to trade secrets. Since there is no practical application of competition law to trade secret protection matters, we cannot identify inadequacies at the national level in Lithuania. In any event, a European harmonized and common legislation on trade secrets would avoid different

87

national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights. B. POWERS OF THE COMPETITION COUNCIL AND PROTECTION OF TRADE



The Competition Council can initiate proceedings upon complaints received, as well as ex officio. B.2 Sanctioning powers

The Competition Council can request termination of activities in breach of competition law rules, or, if sanctioned by court, restrict specific types of trade or economic activities of undertakings. It also has the power to impose fines up to 10% of the undertakings’ annual turnover. B.3 Powers to carry out inspections

The Competition Council has the power to enter and search premises, territory or transport of undertaking under investigation, as well as other undertakings and to enter and search residential premises of managers or employees of the investigated undertaking provided that a specific permission is granted by court. It is also allowed to search for documents in whatever medium they may be stored (computer systems, files, CDs, documents, etc.). Court permission is required only to enter and search premises, but not to access computer systems when premises are entered. Furthermore, the Competition Council is allowed to request and obtain relevant information from investigated undertakings as well as from any other third party. B.4 Rules protecting trade secrets from disclosure in the course of


Any party to the proceedings may request the Competition Council to protect information containing trade secrets. The Competition Council is required to decide upon such request within 10 working days. In case the Competition Council approves the request, access to information containing trade secrets may be granted only upon consent of the owner of the trade secret in question. The Competition Council may request the party to submit extracts from documents which would omit trade secrets. B.5 Possibility for the claimant to participate in the proceedings

The claimants can participate in the proceedings - except for application of interim measures. Claimants have a right to be heard, to submit explanations and to familiarise with the materials of the case. B.6 Interim measures

The Law on Competition allows the Competition Council, upon obtaining court permission, to order undertakings to take specific action required to avoid possible material damage to other undertakings or public interest.

88


The Competition Council may request information from technical experts when needed, although there is no specific requirement to employ experts in all cases involving specific technical issues. B.8 Average duration of the proceedings

The duration of Competition Council proceedings depends on several circumstances, such as the number of the parties involved, the number of documents in the file of the case, and the complexity – from a juridical and technical point of view – of the case. Accordingly, it is not possible to provide an estimate of the average duration of proceedings. B.9 Rights of appeal against Competition Council decisions

Decisions of the Competition Council can be appealed to the administrative courts. C. CIVIL LITIGATION


Proceedings relating to competition law violations are carried out as administrative proceedings by specialised administrative courts, when such proceedings are instituted by the Competition Council. If the suffering party seeks civil relief (e.g., recovery of damages) for competition law violations, then ordinary civil procedure rules apply with no particular differences.


89

LUXEMBOURG



Substantive competition law in Luxembourg does not provide specific provisions on the protection of trade secrets. The Competition Act only forbids agreements restrictive of competition as well as the abuse of dominant positions. Articles 3 and 4 of the Competition Act are almost identical with Article 101 of the Treaty on the Functioning of the European Union, whereas Article 5 is almost identical with Article 102 of the TFEU. These articles could hence have an impact on trade secrets through licence agreements and refusal or obligation to disclose trade secrets in the presence of dominant undertakings, where such conduct result in a restriction of competition. Moreover, according to Article 6 (2) of the Competition Act, the Competition Council has the power to apply and enforce Articles 101 and 102 of the TFEU. A.2 Definition of trade secrets

The Competition Act does not provide a definition of trade secrets. The Competition Council has, however, issued a note concerning the treatment of confidential information as required by Article 26 (4) paragraph 2 of the Competition Act. In this note, trade secrets are described as follows: “If the disclosure of information concerning the activity of a company could cause a significant damage to the same company, one can consider that this information is a trade secret”. However, this definition is very broad and not very precise. For a definition of trade secrets under the laws of Luxembourg, please refer to the Commercial and IP Chapter. A.3 Applicability of EU competition law principles

In its decisions, also taking into account the very limited decisional practice in Luxembourg, the Competition Council commonly refers to EU case law deriving from the European Commission and the European Tribunals. A.4 Decisional practice of the Competition Council

No case law concerning trade secrets in competition law has been retrieved. A.5 Civil court judgements

No case law concerning trade secrets in competition law has been retrieved.

90


Trade secrets are not considered intellectual property rights in Luxembourg; in contrast, they are in some Member States, which is a reason why there are such huge discrepancies in the treatment of trade secrets in the European Union. Harmonised and/or common legislation, at least concerning the definition and status - intellectual property right or not - of trade secrets would therefore be desirable. B. POWERS OF THE COMPETITION COUNCIL AND PROTECTION OF TRADE



The Competition Council can initiate proceedings on its own initiative, on request of any natural or legal person justifying a legitimate interest or on the request of the Minister. B.2 Competition Council sanctioning powers

The council can order the termination of any established offence. To this end, it can impose any proportionate measure deemed necessary to effectively enforce its order. The council can also impose fines as well as penalty payments to ensure compliance to its decisions.

B.3 Powers to carry out inspections

The council can carry out any necessary inspection at the company alleged to infringe competition law. The investigators can access any buildings, grounds and professional transport means, and have insight into the accounts, invoices any other professional documents. They can also require the alleged infringer to provide information and justifications. The investigation must be ordered by the Council and the order must, to be valid, contain the object and aim of the investigation. The search-and-seizure order can also be authorised by the president of the district court. In this case, the investigators will be able to proceed to the search and seizure even if the alleged infringer does not agree. The investigators will then be able to require the help of the police. The authorisation of the judge must, to be valid, contain the object and aim of the investigation. B.4 Rules protecting trade secrets from disclosure in the course of


The Competition Act puts in place certain rules to protect the secrecy of information before and during the proceedings. In particular, pursuant to Article 26 (2) to (5) of the Competition Act, trade secrets or confidential information provided by companies or seized during the investigation for which a written and substantiated request of non-

91

disclosure has been submitted are not disclosed if the confidentiality of all or part of these documents is proved. In such cases, the items in question are removed from the file or some references omitted except where communication or consultation of these documents is necessary to the proceedings or the rights of the parties. In addition, according to Article 27 of the Competition Act, agents and investigators of the Council as well as appointed experts or any other person duly appointed by the Council are subject to respect the professional secrecy and are obliged to keep secret the deliberations and the information they were provided in the course of their duties. Furthermore, the note on trade secrets issued by the Council in May 2007 provides further details on which information can or cannot qualify for protection. It states that information concerning a company which is already known outside it or outside the association to which the company has communicated this information, are normally not considered as confidential. Similarly, information that has lost its commercial value, for example because a certain period of time has lapsed, cannot be considered as confidential. As a general rule, it is assumed that information concerning turnover, sales, market shares as well as any similar information that are older than five years is no longer confidential. B.5 Possibility for the claimant to participate in the proceedings

Before taking a decision on the merits of the case, the council organises a hearing where both the alleged infringer and the claimant are heard. B.6 Interim measures

Once the Council is seized by a case, it can, at the request of any concerned party and after having heard the parties at stake, take conservatory measures and order the parties to suspend the alleged infringing practices. The council can also add a penalty payment to the conservatory measure. These conservatory measures can only be ordered if the alleged infringement may cause serious and irreparable harm to the economic public order or the complaining company and must be proportionate to the situation, and are effective until the council has adopted a decision on the merits of the case. B.7 Dealing with issues requiring specific technical knowledge

The members of the Council are normally lawyers or economists. However, according to Article 18 of the Competition Act, the Council can appoint experts whose mission will have to be precisely determined. According to Article 27 of the Competition Act, these experts are subject to respect the professional secrecy as set out by Article 458 of the Penal Code, even after their duties. B.8 Average duration of the proceedings

The analysis of the existing case law shows that the proceedings in competition cases can last between three to five years. B.9 Rights of appeal against Competition Council decisions

Decisions of the Competition Council can be appealed before the administrative tribunal.

92

C. CIVIL LITIGATION


Unlike civil/IP law litigation, competition law litigation provides clear rules concerning the protection of trade secrets provided by the parties during or before the proceedings.


93

MALTA



The legislation relating to competition law in Malta does provide specific provisions on the protection of trade secrets. However, market players are bound by the provisions on Competition Law and therefore, the use of trade secrets relative to practices that may have fallen within the Competition Law regime would be governed and dealt with by the Competition Authorities and by the courts in terms of Competition Law. Accordingly, if any practices (including the use or misuse of trade secrets) amount to a restrictive agreement or to an abuse of dominant position, i.e., violates Articles 5 or 9, respectively, of the Maltese Competition Act (Cap 379 of the Laws of Malta), then the Maltese Competition Authority (“MCA”) or the Maltese courts would apply those provisions. A.2 Definition of trade secrets

There is no definition of trade secret, business secret or confidential information in the Competition Law regime; indeed, there is not one such definition under Maltese law, generally. A.3 Applicability of EU competition law principles

Principles elaborated in relation to EU Competition law are applicable in Malta. European case law on competition is very much taken into account by the MCA and by the Maltese courts. A.4 Decisional practice of the Maltese Competition Authority

No case law on trade secrets under Maltese Competition Law has been retrieved. A.5 Civil Courts judgements

No case law on trade secrets under Maltese Competition Law has been retrieved. A.6 Inadequacies and need for a European harmonised and common


The main inadequacies relate to the protection of trade secrets in the course of proceedings before the Maltese Competition Authority (see Section B.4. below). While Maltese Competition Law grants the possibility to interested parties to protect their business secrets and confidential information in the course of notification of concentrations, as well as during investigations relating to any breach of competition law generally, the inadequacies of the protection granted lies in the difficulty to remedy a possible breach of confidentiality, since such a breach would not be sanctioned.

94

B. POWERS OF THE MCA AND PROTECTION OF TRADE SECRETS IN THE ADMINISTRATIVE PROCEDURE

B.1 Starting of MCA investigations

Proceedings may be initiated by the Maltese Competition Authority ex officio and a complaint is not necessarily required. B.2 MCA sanctioning powers

The MCA may impose administrative fines (Article 21(1)-(3) of the Competition Act) in the form and manner set up by the Director General, from time to time. Currently, the fine is set at 10% of the total turnover of the undertaking or association of undertakings concerned in the preceding business year. Administrative fines are also imposed (Article 21(5) of the Competition Act) on any person who, in the course of any investigation or inquiry conducted under the Act, or in the course of any proceedings before the Appeals Tribunal, knowingly (a) gives any false, inaccurate or misleading information; (b) supplies incomplete information; (c) prevents or hinders any investigation; or (d) produces or furnishes, or causes or knowingly allows to be produced or furnished any document or information which he knows to be false in any particular material. In such cases, the administrative fine is not less than EUR1,000 and not more than EUR10,000. Furthermore, Article 21(6) of the Competition Act provides for a form of personal responsibility on the part of management of an undertaking. In particular, where a person, being a director, manager, secretary or other similar officer of an undertaking or association of undertakings fails, without reasonable cause, to supply information requested within the time given, such person shall be liable to the payment of an administrative fine of up to EUR2,400 for each day in default. B.3 Powers to carry out inspections

It is possible for the MCA to search premises and computer systems or to require the alleged infringer to provide information as to the whereabouts of documents and files containing such data. Subarticle 12(7) of the Competition Act provides that the Director General may, for the purpose of any investigation, enter into and search any premises, land and means of transport of undertakings and associations of undertakings, where he has reason to believe that information relevant to the investigation may be found, and in the course of any such search may seize any object or document, or take extracts or copies of documents, or order the non-removal of any object from any such premises, land and means of transport, and in connection with any such order may close and seal any or all parts of such premises, land or means of transport, or put any object under seal and, or ask any representative or member of staff of the undertaking or association of undertakings concerned for an explanation of facts or documents relating to the subject matter and purpose of the inspection and record the answers. The officials carrying out such inspection shall exercise their powers upon production of a written authorisation signed by the director general specifying the subject matter and purpose of the inspection and the penalties provided in Article 21(4) and (5) referred to above.

95

Subarticle 12(8) of the Competition Act provides in paragraph (a) that if a reasonable suspicion exists that books or other records related to the business and to the subject matter of the inspection, are being kept in any other premises, land or means of transport, including the homes of directors, managers and other members of staff of the undertakings and associations of undertakings concerned, the Director General may, duly authorised by a warrant issued by a magistrate, order an inspection to be conducted in any such other premises, land and means of transport. B.4 Rules protecting trade secrets from disclosure in the course of MCA

proceedings

Pursuant to Article 12,(4) of the Competition Act, where undertakings and associations of undertakings submit information which contains business secrets or other confidential information, Article 29 of the Malta Competition and Consumer Affairs Authority Act shall apply. Accordingly, any person, undertaking or association of undertakings or any other body which submits information or to the Director General in the course of an investigation, shall clearly identify any material which it considers to be confidential, giving reasons, and provide a separate non-confidential version. Furthermore, in the case of a statement of objections, a case summary, a decision or an order adopted by the Director General, persons, undertakings or association of undertakings may be required to identify any part of a statement of objections, case summary, decision or order which in their view contains business secrets or other confidential information. Where the Director General does not agree with the confidentiality request, even after having received additional clarifications, shall take a decision thereon. Such decision may be appealed to the Appeals Tribunal within 10 days from notification. Moreover, Subarticle 12A,(5) states that the parties notified with a statement of objections shall be entitled to have access to the file concerning their case following such notification, without prejudice to the non-disclosure of information or documents identified by the Director General as containing business secrets or other confidential information. B.5 Possibility for the claimant to participate in the proceedings

The claimant may participate in the proceedings. It is mostly up to Director General of the National Competition Authority to regulate the proceedings. The claimant may submit written and, in some cases, oral submissions. The Director General may also, after hearing the other party, authorise the claimant to make further submissions and to view the file of the proceedings with the other party's submissions. B.6 Interim measures

No interim measures are available. B.7 Dealing with issues requiring specific technical knowledge

Normally, such cases are handled by professionals with a background in law or in economics. It is not common that a technical expert is appointed.

96

B.8 Average duration of the proceedings

Considering all the rights of redress available at law, proceedings take an average of nine to twelve months. B.9 Rights of appeal against MCA decisions

Article 13A of the Competition Act states that the undertaking or association of undertakings concerned may appeal by application filed before the Appeals Tribunal from any infringement decision, cease and desist or compliance order, administrative fine and, or daily penalty payment adopted or imposed by the Director General in accordance with the provisions of this Act within 20 days from notification. The Appeals Tribunal may either confirm in whole or in part or quash the decision. The Appeals Tribunal decision may be appealed on a question of law to the Court of Appeal by means of an application filed in the registry of that court within 20 days from the date of the decision. C. CIVIL LITIGATION


In terms of the applicable norms regulating procedure locally, civil proceedings are separate and distinct from criminal and administrative proceedings. However, in general litigation, a civil court may stay proceedings and refer matters to the National Competition Authority, where there is any question relating to the Competition Act. Moreover, any person that suffers damages as a result of breach of Competition Law may bring a civil action for such damages. Litigation relating to Competition Law relies heavily on the rules of procedure of general civil and criminal law and adopts the same legislation in many respects as far as procedure is concerned.

Relevant Literature Not available

97

THE NETHERLANDS



The Dutch Competition Act (Mededingingswet, “DCA”) does not contain any provisions which specifically refer to trade secrets. However, the general provisions contained in the DCA relating to illicit agreements/concerted practices (Article 6 of the DCA) and abuses of dominant position (Article 24 of the DCA) may also apply to situations relating to the licensing, disclosure of (or refusal to disclose) trade secrets. Furthermore, like other National Competition Authorities and national courts within the European Union, the Dutch Competition Authority (Nederlandse Mededingingsautoriteit, hereinafter “NMa”) and the Dutch courts have the power to enforce Article 101 and Article 102 of the TFEU. In this respect, Dutch competition law – likewise EU competition law – may impact on trade secrets, but only in circumstances where the use of (or refusal to transfer) trade secrets have an impact on competition, which is the final object of competition law protection. A.2 Definition of trade secrets

The DCA does not provide for a definition of trade secrets or the few decisions of the NMa that deal with trade secrets – mainly concerning the question of whether a non-solicitation clause (to prevent the other party from hiring senior employees that have access to trade secrets) can be considered an ancillary restraint as meant in Article 10 of the DCA - contain a definition of trade secrets. Moreover, there are no Dutch court decisions that contain a definition of trade secrets. A.3 Applicability of EU competition law principles

The NMa and Dutch courts do take into account the decisional practice of the European Commission, and Dutch competition law shall be interpreted in accordance with the principles of the European Community competition law. A.4 Decisional practice of the Dutch Competition Authority

As mentioned above, the few decisions of the NMa that deal with trade secrets mainly concern the question of whether a non-solicitation clause (to hire senior employees that have access to trade secrets) can be considered an ancillary restraint as meant in Article 10 of the DCA. Accordingly, these decisions do not deal with the question on how competition law may come into play in relation to the protection or use of trade secrets. A.5 Civil court judgements

The Dutch civil courts have never dealt with competition law issues involving trade secrets. A.6 Inadequacies and need for a European harmonised and common


Dutch competition law protects competition, and trade secrets might be of relevance – only under certain exceptional circumstances – when their exercise (or the refusal to disclose them) illicitly restricts competition. Accordingly, impacts of competition law on

98

trade secrets could very rarely apply. In any event, a European harmonized and common legislation on trade secrets would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights. B. POWERS OF THE NMA AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of NMa investigations

A complaint is not required for the NMa to initiate proceedings; it can also initiate proceedings ex officio or as a result of a leniency request. The NMa makes use of a prioritisation policy11 when deciding which matters it will investigate. B.2 NMa sanctioning powers

The NMa can impose the following sanctions: (i) Administrative fines (ii) Penalty payments (iii) Binding instructions on compliance with the DCA The NMa can also fine individuals for breaches of competition law. However, in the Netherlands, there are no criminal sanctions for breaches of competition law. B.3 Powers to carry out inspections

The NMa has the power to search premises and computer systems and it has the right to require the alleged infringer to provide information as to the whereabouts of documents and files containing such data. The NMa’s investigators must request documents/files reasonably clearly and cannot go on a “fishing expedition”. The NMa is bound by legal privilege: it does not have the right to inspect correspondence between the company and its attorneys. Moreover, the NMa does not have the right to inspect documents that are clearly outside the scope of the investigation or personal documents. The NMa does not have to obtain a formal authorisation when entering and searching premises. The NMa will usually provide the company with a document setting out the subject matter and purpose of its investigation, but, however, it is not obliged to do so and can also inform the company orally of the purpose of its visit. Finally, the NMa also has the right to enter the homes of private persons. In such case, the NMa must, however, have the prior authorisation by the examining magistrate of the Rotterdam Court.

11 The most recent version of this prioritisation policy was published in the Government Gazette on 16 February 2012 and can be found at: http://www.nma.nl/documenten_en_publicaties/archiefpagina_nieuwsberichten/webberichten/2012/07_12_nieuwe_regels_voor_ingrijpen_nma.aspx.

99

B.4 Rules protecting trade secrets from disclosure in the course of NMa proceedings

The NMa goes a long way to protect companies’ trade secrets within proceedings. Indeed, for a long time, the NMa argued that the Dutch Act on Public Access to Government Information (Wet openbaarheid Bestuur, hereinafter “WOB”), that provides the framework under which third parties can access information that is in possession of the government, was not applicable to information provided by parties to the NMa on the basis of the DCA. In the NMa’s view, the DCA contained its own disclosure provisions and, therefore, the WOB was not applicable. As a result, the NMa refused to provide third parties access to trade secrets and other information that had been provided to the NMa confidentially. This line of argumentation was, however, rejected by the Council of State (Raad van State) in the so-called Gazelle case in 2007. Since then, the DCA specifically refers to the WOB. Moreover, the NMa does apply the WOB and takes requests for information on the basis of the latter. Nevertheless, the NMa is still generally reluctant to disclose trade and manufacturing information that has been provided to it confidentially. This may be regarded as understandable, as a different standpoint of the NMa would most likely lead to the situation where companies are unwilling to cooperate with the NMa for fear of their trade secrets becoming public. Article 44 (3) of the DCA, Article 49 d (1) 1 and Article 65 (2) of the DCA indicate that decisions of the NMa will be made public in the Government Gazette (Staatscourant) with the exception of information that cannot be made public pursuant to Article 10 of the WOB - which prohibits certain types of information being made public by the government, including trade and manufacturing information that has been provided to the government confidentially. In practice, this means that the NMa provides parties with the opportunity to indicate before the publication of the decision which information should be kept confidential on the basis of the WOB. Nonetheless, it is ultimately up to the NMa to decide whether it considers information to fall under Article 10 of the WOB or not. Parties can object to the decision of the NMa and in case the NMa declares the objection unfounded, parties can, moreover, appeal against the decision on the objection with the Court of Rotterdam. B.5 Possibility for the claimant to participate in the proceedings

The claimant can request the NMa to participate in antitrust proceedings as an interested party. It is up to the NMa to decide whether to allow such participation. B.6 Interim measures

Pursuant to Article 83 of the DCA, the NMa may impose a provisional order subject to periodic penalty payments if, in its provisional opinion, it is probable that Article 6(1) or Article 24(1) of the DCA has been violated and immediate action is required, in view of the interests of the undertakings affected by the violation or in the interest of preserving effective competition. B.7 Dealing with issues requiring specific technical knowledge

Not applicable

100


The average duration of proceedings is two years. B.9 Rights of appeal against NMa decisions

There is a general possibility for parties to object to decisions of the NMa. If the NMa declares the objection unfounded, parties can, moreover, appeal against the decision of the NMa on an objection with the Court of Rotterdam. It is, moreover, also generally possible to start interim injunction procedures to prevent the NMa from making information public. C. CIVIL LITIGATION


Actions against competition law violations can be brought pursuant to Dutch general rules. There are no differences between general litigation and litigation relating to competition law violations.


101

POLAND



The Act on Competition and Consumer Protection of 16 February 2007 (“ACCP”) does not contain any specific substantive provisions on the protection of trade secrets. The ACCP contains specific provisions regarding the protection of trade secrets only in relation to conducting proceedings before the President of the Competition and Consumer Protection (“PCCP”) (e.g., access to files, hearings). A.2 Definition of trade secrets

The ACCP does not provide for a definition of trade secrets. However, ACCP refers to the definition provided for in the Act on Counteracting Unfair Competition of 16 April 1993 ("Unfair Competition Law"). Therefore, the PCCP as well as the Competition and Consumer Protection Court (“CCPC”) refer to the definition provided therein. In particular, Article 11 (4) of the Unfair Competition Law defines trade secrets as commercial confidential information consisting of technical, technological or organisational data or any other information having business value, which has not been disclosed to the public and with regard to which protection measures were undertaken in order to maintain their confidentiality. This definition of trade secrets is generally acknowledged as most important in Polish law and is used as a point of reference when the term ‘trade secrets’ is used in other laws. A.3 Applicability of EU competition law principles

The rules elaborated in EU competition law are applied by the PCCP and the CCPC. From the date Poland joined the European Union, the EU competition law is applied in parallel with national rules (in accordance with the Regulation 1/2003). Both the PCCP and the CCPC have the right to directly apply the EU competition law in case the practice may have an effect on trade between Member States. Additionally, the PCCP and the CCPC often refer to the decisions of the European Commission or the EU courts also when applying national rules. A.4 Decisional practice of the Polish Competition Authority

The CCPC has not issued, to our knowledge, any decisions on substance regarding trade secrets. A.5 Civil court judgements

Polish civil courts have not dealt with competition law issues regarding trade secrets. A.6 Inadequacies and need for a European harmonised and common


Since there is no decisional practice in relation to the application of substantive competition law provisions to trade secrets, it is not possible to identify possible inadequacies of the system.

102

B. POWERS OF THE PCCP AND PROTECTION OF TRADE SECRETS IN THE ADMINISTRATIVE PROCEDURE

B.1 Starting of PCCP investigations

PCCP initiates proceedings ex officio. This being said, it is possible to file a complaint with the PCCP about a suspected infringement of the competition law. However, such a complaint is not binding on the PCCP, which is free to decide whether to initiate proceedings or not. B.2 PCCP sanctioning powers

As far as the sanctioning powers of the PCCP are concerned, fines can be imposed both on undertakings and individuals. • Fines on undertakings The PCCP may impose a fine of up to 10% of revenues earned in the accounting year preceding the year in which the fine was imposed, if the undertaking - even unintentionally: (i) has concluded a prohibited anticompetitive agreement or abused its dominant

position (according to either national or EU competition law); or (ii) as infringed collective consumer interests. Moreover, the PCCP may also impose a fine if an undertaking - even unintentionally: (i) failed to provide information requested by the PCCP or provided incorrect or

misleading information; or (ii) does not collaborate during the inspection. A fine in the amount equivalent to EUR10,000 may also be imposed on an undertaking for each day of delay in performing the decisions of the PCCP or court judgements relating to antitrust practices, concentrations or practices infringing consumers’ collective interests. • Fines on individuals The PCCP may impose on a person holding a managerial position or being a member of the managing body of the undertaking, a maximum fine of fifty-fold the average salary (based on the quarterly reports published by the Polish Chief Statistics Office), if such a person - even unintentionally - has failed to: (i) execute any of the decisions, resolutions or judgements relating to antitrust

practices, concentrations or practices infringing consumers’ collective interests; (ii) notify an intention of concentration; or (iii) provide information as requested by the PCCP or has provided unreliable or

misleading information.

103


The PCCP can search premises and computer systems or require the alleged infringer to provide documents and files containing such data. There are two types of inspections carried out by the PCCP – with or without consent of the Competition and Consumer Protection Court (“CCPC”). The first type is carried out solely on the basis of a PCCP decision authorising a dawn raid. In such a case, the inspectors cannot carry out searches themselves without the consent of the undertaking. Nevertheless, a lack of collaboration during such an inspection can be subject to a fine. The second type (based on both a decision of the PCCP and an authorisation from the CCPC) is carried out by the inspectors, who are authorised to: (i) access the site and the buildings, other premises and means of transportation

held by the inspected undertaking; (ii) request access to files, books, documents and data carriers related to the subject

of the inspection; and (iii) request explanations. If the inspectors have reasons to believe that there are files, documents or any other data carriers on other premises (including private houses or means of transportation), the police may conduct searches at such premises but only based on a separate consent of the CCPC issued upon the request of the PCCP. B.4 Rules protecting trade secrets from disclosure in the course of PCCP

proceedings

There are some procedural measures aiming at protecting trade secrets when carrying out anti-monopoly or concentration proceedings; in particular: (i) The PCCP may limit the access to files containing trade secrets, in order to

prevent their disclosure. (ii) Information constituting trade secrets is deleted from the text of decisions

published by the PCCP. (iii) The employees of the Competition and Consumer Protection Office are obliged to

protect trade secrets acquired during proceedings. (iv) The PCCP holds a closed session, if during the hearing, trade secrets will be

discussed. The PCCP requires the undertakings involved in the proceedings to indicate which of the information provided contains trade secrets that cannot be disclosed to other parties or in the final text of the decision of the PCCP - which, as a rule, is published on the PCCP’s website. Nevertheless, Polish competition law proceedings lack any mechanism that would enable the undertaking to review the text of the decision before its issuance.

104

It is worth noting that some decisions have dealt with the issue of trade secrets protection in the course of proceedings. To start with, two resolutions of the Anti-Monopoly Court (Resolution of 15 May 1996, XVII Amz 1/96 and Resolution of 30 October 1996, XVII Amz 3/96, both issued on the basis of the previous competition law act, but still relevant also in relation to the ACCP) indicate that the aim of anti-monopoly proceedings is to protect competition from distortion caused by undertakings but the proceedings cannot be a method for gathering trade secrets of competitors, which could not be obtained in the course of regular business activities. The following information has been considered by the Anti-Monopoly Court as a business secret: • Volume of production and sales as well as sources of supply and demand (e.g.,

resolution of the Anti-Monopoly Court 26 July 1999, XVII Am 5/99, resolution of the Anti-Monopoly Court 25 September 2000, XVII Amz 6/00)

• Volume, value and geographic scope of sales (resolution of the Anti-Monopoly

Court, XVII Amz 5/99) • Structure of production, volume of export, use of capacity (resolution of the Anti-

Monopoly Court XVII Amz 3/96) • Information on discounts negotiated during an advertising campaign (resolution

of the Anti-Monopoly Court 19 February 2002, XVII Amz 8/02) • List of customers and data in a distribution chain (resolution of the Anti-Monopoly

Court XVII Amz 1/96) • Percentage of costs in the value of sales (resolution of the Anti-Monopoly Court

27 March 2002, XVII Amz 8/02) • Terms and conditions of the contracts (resolution of the Anti-Monopoly Court,

XVII Amz 1/01) • Estimated shares of particular customers in total sales (resolution of the Anti-

Monopoly Court, 30 March 2006, XVII Amz 4/06) B.5 Possibility for the claimant to participate in the proceedings

A claimant is not a party to the proceedings and does not have any rights in the proceedings. It may apply for access to the files but only on the basis of general rules on the access to public information. B.6 Interim measures

PCCP does not have the power to apply measures of interim relief. B.7 Dealing with issues requiring specific technical knowledge

PCCP may use opinions of external or internal experts in the proceedings. Use of the external experts is, however, rather extraordinary. PCCP tends to use its internal resources and the case handler may ask for assistance from other departments, e.g.,

105

Department of Market Analysis, as sometimes undertakings, parties to the proceedings, submit expert opinions as evidence. B.8 Average duration of the proceedings

Not available B.9 Rights of appeal against PCCP decisions

A decision of the PCCP may be appealed to the CCPC within two weeks of its receipt. C. CIVIL LITIGATION


Litigation proceedings relating to competition law violations are conducted before the PCCP. Proceedings before the PCCP are conducted on the basis of the ACCP as well as the Code of Administrative Proceedings. Decisions of the PCCP may be appealed against the CCPC. Proceedings before the CCPC are conducted in accordance with the Civil Proceedings Code. There are no differences between general litigation and litigation carried out in front of the CCPC as both are conducted in accordance with the Civil Proceedings Code. Apart from litigation related to decisions of the CCPC, private civil actions may be brought on a stand alone or follow-on basis in respect of any anti-competitive practices under Polish or EU competition law - including abuse of a dominant position and anti-competitive agreements. Those actions are brought as a general litigation and are not examined by the CCPC but before regular civil courts. Private actions based on a competition law infringement, general litigation, may be brought under general tort provisions of the Polish Civil Code and the Civil Procedural Code - there being no specific provisions on private competition litigation - or under the Act on Assertion of Claims in Class Actions. The approach and the conduct of the proceedings are the same for legal entities and individuals, both domestic and foreign. General litigation based on competition law infringement is not common in Poland.

Relevant Literature • MATERNA, G., "Limiting access to files in the course of proceedings before the

president of the OCCP"; Commercial Law Review 2008 Furthermore, the following commentaries on the ACCP are of relevance: • STAWICKI, A., STAWICKI E.,"Act on competition and consumer protection.

Commentary" • SKOCZNY, T., .,"Act on competition and consumer protection. Commentary" • KOHUTEK, K., SIERADZKA, M., "Act on competition and consumer protection.

Commentary"

106

• Banasiński, C., Piontek, E., "Act on competition and consumer protection. Commentary"

107

PORTUGAL



As a preliminary note, the Portuguese Competition Law regime is undergoing a reform that is expected to be completed within May 2012 – a draft law has already been submitted to public consultation and has also been submitted to the parliament for discussion and approval. Consequently, some of the provisions that will be cited in the present chapter are likely to be changed in the near future. In order to ensure that the answers provided hereby contain all the pertinent information for the short and medium term, both the current legal framework and the proposed changes will be taken into account. This being said, there are no substantive competition law provisions that address specifically trade secrets, which means that trade secret protection falls into the general categories of antitrust provisions (no substantive soft law guidance has been published by the Portuguese Competition Authority, “PCA”) or merger control provisions. Accordingly, under current (and future) Portuguese competition regime, Portuguese Competition Law (Law No. 18/2003, of 11 June 200312, “PCL”) provisions are applicable also in cases where a competition law violation relates to trade secrets. Reference should be made, in particular, to (i) Article 4º of PCL, prohibiting agreements having as their object or effect the prevention, restriction or distortion of competition within the whole or part of the Portuguese, which is the only provision under which agreements that pertain to trade secrets may be considered as anti-competitive; and (ii) Article 6º of PCL forbidding unilateral conducts by dominant undertakings, when such conduct constitutes an abuse. Article 6º might apply to behaviours relating to trade secrets, e.g., when the dominant undertaking abusively requests to a client or costumer to disclose trade secrets to which it would not have had access to otherwise.

In relation to unilateral conducts, Article 7º of PCL is also of relevance, since it indicates that:

1. (…) the abusive exploitation of a situation of economic dependence of a supplier or costumer, without an equivalent alternative, is prohibited; and

2. the following may be considered abusive: a) any of the behaviors referred to in Article 4º/1; (…). This provision extends the applicability of traditional antitrust rules to situations of economic dependence and it could be possibly used also to protect trade secrets against an abusive conduct of a non-dominant undertaking. Finally, it should be mentioned that in the Draft Portuguese Competition LAW (“DCPL”) there are no significant differences from the current regime as described above.

12

As amended by Decree-Law N.º 219/2006, of 2 November, the Decree-Law N.º 18/2008, of 29 January and the Law N.º 52/2008, of 28 August

108

A.2 Definition of trade secrets

A starting point in order to clarify what is the definition of trade secrets relevant when applying competition law provisions might be Article 26º/5 of the PCL, which is however procedural in nature and refers to the hearing phase (the procedural phase that begins with Statement of Objections) and states that the “PCA takes due regard of the legitimate interest of the undertakings in the non-disclosure of their trade secrets” (our translation). This principle is then developed in the guidelines or rules of procedure in antitrust (Linhas de Orientação Sobre a Instrução de Processos Relativos à Aplicação dos Artigos 4.º, 6.º e 7.º da Lei n.º 18/2003, “Guidelines”), a soft law guidance on what the PCA will consider as trade secret for the purposes of ensuring the right of defence of the (accused) parties in the proceedings. The definition of trade secret in the Guidelines mirrors the one included in the Commission Notice on the rules for access to the Commission file (“Commission Notice”) in identifying confidential information. In particular, trade secrets comprise (a) business secrets as well as (b) confidential information, other than business secrets, the disclosure of which would significantly harm a person or an undertaking. As for (a) business secrets, a non-exhaustive list of documents – equal to the one present in the Commission Notice – that could be construed as business secrets is provided and encompasses “technical and/or financial information relating to an undertaking's know-how, methods of assessing, costs, production secrets and processes, supply sources, quantities produced and sold, market shares, customer and distributor lists, marketing plans, cost-and-price structure and sales strategy”. As for (b) information other than a business secret to be classified as confidential, under the heading of trade secrets, differently from the Commission Notice, no further details are given, although an explicit reference – through a footnote – is made to paragraph 19 of the Commission Notice. However, the explicit references in the PCL and in the Guidelines are not binding and, accordingly, the PCA or national courts can interpret the notion of trade secrets without relying on such references. Scholars have also identified Article 318º of the Industrial Property Code (in itself, a provision that derives from Article 39º/2 of the TRIPS Agreement) as an additional source for the identification of a more accurate meaning of trade secrets under Portuguese Law. A.3 Applicability of EU competition law principles

Portuguese competition regime holds little differences (if at all) from the EU Competition Law, and the PCA refers, in applying such rules, to EU Guidelines and Guidance on substantive matters, including all sorts of horizontal and vertical agreements. Accordingly, the PCA will likely follow the European Commission’s approach when reviewing agreements pertaining to trade secrets. Furthermore, Article 5º/3 of the PCL foresees that any agreement between undertakings that does not affect inter-state trade, but that would fall within the scope of an EU Law block exemption (concerning vertical agreements, horizontal agreements, technology transfer, motor vehicles, etc.) would be considered justified under Portuguese Competition Law. Also, in relation to mergers, the PCA has consistently referred to and applied the Commission Notice on restrictions directly related and necessary to concentrations, in particular with regard to non-competition agreements and to licensing agreements as well.

109

It should be mentioned that not only the current Portuguese Competition regime draws significantly its inspiration from EU legislative framework, but that the DPCL will eventually further such closeness between the EU Law perspective and the Portuguese Competition regime. In addition, both the provisions of EC Regulation No. 1/2003 and Article 22º/2 of the PCL empower the PCA to apply directly Articles 101 and 102 of the Treaty on the Functioning of the European Union (“TFEU”). A.4 Decisional practice of the Portuguese Competition Authority

The PCA has not issued any decisions on substance regarding trade secrets. It should be mentioned that the PCA does not publish its decisions and only the cases that have been appealed have been (recently) published. A.5 Civil court judgements

National courts have not issued any judgements on substance regarding trade secrets. A.6 Inadequacies and need for a European harmonised and common


Portuguese Competition regime does not have specificities that could be considered a particular and distinctive positive asset. In addition, a reform of the Competition Law is in course, although the amendments introduced will not alter considerably the current regime in what concerns the protection of trade secrets. In relation to the protection to trade secrets granted in Portugal, the most significant inadequacy is the low level of public enforcement (making potentially abusive conducts more likely) and the insufficiently streamlined procedures to ensure the protection of trade secrets in sanctioning and administrative procedures. In any event, a European harmonized and common legislation on trade secrets would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights. B. POWERS OF THE PCA AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of PCA investigations

The PCA can initiate proceedings ex officio, pursuant to Article 54º of the Framework Law for Misdemeanors, ex vi Article 24º/1 of PCL. The information regarding the possibility of the existence of an infringement can be obtained either through (a) a complaint, (b) the network of competition authorities, (c) in result of the exercise of its supervisory powers (the PCA has the power to issue information requests to any undertaking) and/or (d) merely by following the activity of the Portuguese economy (e.g., news in the media, as explicitly stated in §9 of Linhas de Orientação Sobre a Instrução de Processos Relativos à Aplicação dos Artigos 4.º, 6.º e 7.º da Lei n.º 18/2003). B.2 PCA sanctioning powers

The PCA has the power, in cases of competition law violations, to order the unlawful conduct to be brought to an end (if still ongoing) and to impose fines up to 10% of the

110

turnover in Portugal (pursuant to Article 43º/1, a) of PCL). In addition, in case of bid rigging in public tenders, the participants may be forbidden to participate in any other public tenders for a period of up to two years (pursuant to Article 45º/1 b) and 2 of PCL).

The above provisions are not expected to change with the DPCL. B.3 Powers to carry out inspections

The PCA can search the premises of companies and, in that procedure, examine, collect, apprehend, make copies of any documents (including mail and emails) and request the assistance of the employees in order to determine the meaning/location of documents (without infringing the right to no self-incrimination), pursuant to Article 17º/1 c), of PCL. In order to carry out an inspection, the PCA needs to receive a warrant from the public prosecutor, stating the object of the inspection and the people involved in it. The DPCL contains three specific provisions relating to inspections: (a) Article 16º is the general provision granting the PCA power to make inspections and to seal premises and/or material during an inspection; (b) Article 17º deals exclusively with digital documents – such documents which have to be presented to a hearing court for a decision that will safeguard the issues of privacy and/or that are related to the object of the inspection, before they can be added to the PCA’s file; and (c) Article 18º foresees the possibility for inspection of other premises, upon request to the hearing court for a inspection. B.4 Rules protecting trade secrets from disclosure in the course of PCA

proceedings

In relation to the protection of trade secrets during proceedings, a distinction can be made between (a) procedures that can entail the imposition of a sanction by the PCA (antitrust infringement procedures, non-compliance with merger control rules, etc.); and (b) procedures that are purely administrative (such as merger control and PCA acting within its powers of supervision). This distinction is essential as it carries with it a fundamental difference in the procedural provisions applicable to each case, since for procedures where the PCA can impose a sanction, besides the provisions of Constitutional Law (mainly relating to the protection of property and the balancing of rights constitutionally protected), the provisions of the PCL and the bylaws of the PCA, Criminal Procedural Law could be applicable. To the contrary, Criminal Procedural Law does not apply to purely administrative procedures. In this respect, it is worth stressing that, as already mentioned above in Section A.2., for sanctioning procedures, Article 26º/5 of the PCL – which relates to the Hearing phase (the procedural phase that begins with Statement of Objections) – states that the “PCA takes due regard of the legitimate interest of the undertakings in the non-disclosure of their trade secrets”. The Guidelines further develop and clarify the provision of Article 26º/5, provide a definition of trade secrets, and indicate that the PCA may grant the parties access to trade secrets in the file only when such access is necessary to prove the existence of an infringement or that a certain restrictive practice is justified. Furthermore, Article 36º of the Bylaws of the PCA states that the members of the board of the Competition Authority and the officials are bound by the duty to keep confidential any information that they may have had access to due to their position within the PCA.

111


The possibility of a claimant to participate in the proceeding is currently limited to the submission to the PCA of a request for interim relief to be granted. In this case, either the PCA proceeds to issue a decision granting the interim relief – the rule being that all interested parties should be heard, the complainant and the undertaking accused of the infringement, unless hearing the latter would put at risk the objectives pursued with the interim relief (Article 27º/3, of PCL) – or it notifies the complainant, by a decision, of the reasons for not issuing the interim relief. Article 32º of DPCL contains similar provisions in relation to the possibility for claimants to participate in the proceedings. B.6 Interim measures

Pursuant to Article 27º of PCL, the PCA may adopt interim measures, either ex officio or following a request from a complainant. The interim relief will only be issued if there is the danger of an (i) imminent, (ii) serious and (iii) irreparable damage to competition or third parties stemming from a behaviour that is likely to be considered in breach of antitrust provisions. No substantial changes in this regard are present in Article 32º of DPCL. B.7 Dealing with issues requiring specific technical knowledge

Pursuant to Article 17º/ 1 e) of PCL, the PCA can request the assistance of any entity of the public administration. In addition, other than economic experts – common in antitrust agencies – it is within the powers of the PCA to require advice to a third party if it considers it necessary to ascertain whether a certain conduct can constitute an infringement. B.8 Average duration of the proceedings

There are no time limits for the PCA to issue a decision. In practice, there is only a (purely indicative) internal term of 30 days relating to decisions on interim measures (from the moment a request is received until the decision is adopted). B.9 Rights of appeal against PCA decisions

Decisions taken by the PCA – including decisions taken regarding the confidentiality of certain documents in the file and/or access to such documents during the course of the procedure – can be appealed in the majority of cases to the Commerce Court (pursuant to Articles 50º and 54º of PCL), with some specific decisions that can be appealed to the administrative courts. With the DPCL, a court for competition and regulatory matters will be created and will have competence over all matters dealt with by the PCA. C. CIVIL LITIGATION


There are no specificities in the litigation of competition law violations that fall within the general civil liability procedures.

112

Relevant Literature

• PEREIRA RICARDO, F., “Os segredos de negócio e o acesso aos autos no

procedimento de controlo de concentrações”, in Estudios em Memória do Prof. Doutor J. L. Saldanha Sanches, Volume I, Coimbra Editora, September 2011, pp. 161-197;

• LOPES, P., “Segredos de negócio versus direitos de defesa do arguido nas contra-

ordenações da concorrência”, in Revista Concorrência e Regulação, nr. 4, 2010, pp- 65-107;

• CALVETE, V., “Lei da Concorrência – Anotada”, Coimbra Editora, 2009; • RUIZ, N., “Comentário à Sentença do 2.º juízo do Tribunal do Comércio”

(processo n.º 766/06, 4TYLSB), in Sub Judice, nr. 40, 2007, pp. 125-133.

113

ROMANIA



Romanian Competition Law No. 21/1996 (“Competition Law”) does not contain substantive provisions specifically referring to trade secrets, but only confidentiality rules to be observed by the Competition Council’s inspectors and staff in relation to those trade secrets which were revealed to them in the course of their professional activities and provisions regarding the protection of trade secrets from access of third parties in the course of proceedings. In Romania, specific protection of trade secrets is granted under unfair competition law, IP law and criminal law. For further details, please refer to the Commercial and IP chapter and to the Criminal chapter. Notwithstanding the above, the general provisions of the Competition Law relating to illicit agreements/concerted practices (Article 5 of the Competition Law) and abuses of dominant position (Article 6 of the Competition Law) may also apply to cases relating to the licensing, disclosure of (or refusal to disclose) trade secrets. Furthermore, both the Romanian Competition Council and the Romanian courts have the power to enforce Articles 101 and 102 of the Treaty on the Functioning of the European Union (“TFEU”). In this respect, Competition Law may impact on trade secrets, but only in cases where the use of (or refusal to transfer) trade secrets has restrictive effects or other negative impact on competition. A.2 Definition of trade secrets

There is a very limited decisional practice in Romania referring to violation of trade secrets, and no general definition of trade secrets serving competition matters has been used by the Competition Council or our national courts in their decisions until now. In this respect, some secondary legislation issued by the Competition Council offers guidelines in assessing what information is being dealt with must be considered as a business secret from a competition point of view. The 2011 Instructions of the Competition Council13 on the rules of access to the Competition Council’s file in matters referring to anti-competitive practices, abuse of dominant position and unlawful competition practices of public authorities, provide that “when the disclosure of information related to the economic activity conducted by a company may severely harm its interests, such information represents business secrets. In such respect, information which may be qualified as business secrets are, for example: technical and/or financial information related to the company’s know-how, cost assessment methods, manufacturing processes and secrets, supply sources, quantities made and sold, market shares, client and distributor lists, marketing plans, cost and price structure, sale strategy”.

13 Instructions on the rules of access to the Competition Council’s file in the cases referring to Articles 5, 6 and 9 from Competition Law no. 21/1996, Articles 101 and 102 of the Treaty on the functioning of the European Union, as well as in economic concentrations, approved by the Order of the Competition Council’s president no. 794/2011

114

Although such provision, representing a descriptive example rather than a definition of business secrets, is given in the context of establishing the legal framework of disclosure by the Competition Council of those information, which are considered trade/business secrets, it will definitely impact on the conclusions that the Competition Council will draw when assessing such cases involving trade secret matters. A.3 Applicability of EU competition law principles

Like in other EU Member States, Community treaties and regulations are pieces of legislation binding in their entirety upon and directly applicable to Romania, with no national transposition measures being necessary. Therefore, the principles elaborated in relation to such EU competition law are recognised and observed in Romania without the need to specifically regulate them under local legislation. Nevertheless, some principles of EU competition law were explicitly implemented in the Romanian Competition Law. For instance, the principles regulated by Articles 101 and 102 of the TFEU were transposed in Articles 5 and 6 of the Competition Law. Furthermore, Block Exemption Regulations are directly applicable to trade inside the national market as well (Article 5, para 3 of the Competition Law). Moreover, in accordance with the provisions of the Romanian Competition Law, the Competition Council shall have to observe the practice of both EU courts and European Commission when issuing best practice recommendations for various economic fields or guidelines in relation to general competition matters (Article 27, para 2 of the Competition Law) and it may transmit to courts assessing competition cases its comments and explanations related to the application of Articles 101 and 102 of the TFEU (Article 61, para 6 of the Competition Law), including EU case law in such respect. A.4 Decisional practice of the Competition Council

To the best of the writer’s knowledge, the Competition Council’s case-law does not include relevant decisions specifically or incidentally referring to violation of trade secrets in competition matters. Although there are very limited cases in which the Competition Council had analysed the potential anti-competitive effects of certain confidentiality clauses or clauses regarding the assignment of IP rights (which in certain cases could be considered as trade secrets) by means of a vertical agreement14, the sanctioning decisions did not consider such clauses as having an anti-competitive effect on the relevant market and, consequently, did not retain them as grounds for sanctioning the respective undertakings. On the other hand, there are few decisions of the Competition Council authorising economic concentrations which state that the understanding of the parties for transferring know–how and goodwill elements by means of an undertaking’s transfer was directly linked to and necessary for implementing the respective economic concentration, with no negative impact on the competitive environment15.

14 i.e., Decision of the Competition Council no. 51/2011 regarding sanctioning of the undertakings Belupo lijekovi & kozmetica d.d. Croaţia and A&G Med Trading Romania for breaching Article 5 of the Romanian Competition Law and Article 101 of TFEU. 15 Decision of the Competition Council no. 9/2012 for authorisation of the economic concentration achieved by acquiring the control of Ferrostaal AG (Germania) by MPC Industries GmbH (Germania).

115

A.5 Civil court judgements

Romanian civil courts have never dealt with competition law issues involving trade secrets. A.6 Inadequacies and need for a European harmonised and common


The Romanian legal provisions on trade secrets are fragmented and scattered over different fields of law, with specific focus on the unfair competition law, whereas in the field of specific competition law, the relevant European legislation is directly applicable. It is accordingly difficult to identify specific inadequacies relating to trade secrets and competition law. However, a European harmonized and common legislation on trade secrets would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights. B. POWERS OF THE COMPETITION COUNCIL AND PROTECTION OF TRADE



The Competition Council can start an investigation both ex officio and upon complaint from an individual or legal entity that is essentially and directly affected by the infringement of the provisions of Articles 5, 6, 9 and 15 of the Competition Law, as well as of Articles 101 and 102 in the Treaty on the Functioning of the European Union. Should a request filed with the Competition Council do not meet certain mandatory admissibility requirements (e.g., the proof of legitimate interest, filling in of the complaint form with all required information), the said request may be considered as a starting point for an ex officio initiation of an investigation by the Competition Council. In all cases, the Competition Council will order the initiation of an investigation only if, upon the assessment of the complaint, it ascertains that there are sufficient factual and legal grounds to justify the initiation of proceedings. If the complaint does not provide sufficient grounds, the Competition Council will reject it and notify in writing the complaint’s author in respect to its decision, and the grounds for such decision, within 60 days as of the date the latter is notified. The complaint’s author has the opportunity to state its point of view with regard to the grounds on which the competition authority intends to reject the complaint. B.2 Competition Council sanctioning powers

Should the Romanian Competition Council ascertain an infringement of Romanian or EU competition law, it can: (a) require that an infringement be brought to an end, by imposing any behavioural

or structural coercive measures which are proportional to the respective infringement and are deemed as necessary for the effective interruption of the respective infringement;

(b) accept commitments;

116

(c) impose fines, including periodic penalty payments, determined on a case-by-case basis, in light of the gravity, duration or other factual circumstances of the investigated actions. For instance, Competition Council may impose administrative fines from 0.5% up to 10% of the total turnover of the undertaking involved corresponding to the financial year prior to the sanctioning;

(d) provide recommendations; and (e) impose conditions or other obligations to the parties (e.g., withdrawal of the

benefit for those agreements between undertakings, decisions by associations of undertakings and concerted practices under the applicability of certain European Block Exemption Regulations).


Competition Council is entitled to search premises and computer systems or to require the alleged infringer to provide information as to the whereabouts of documents and files containing such data, if some special requirements are cumulatively met. In particular, the Competition Council’s inspectors, except for junior inspectors, have broad investigative powers (such as accessing the premises, lands or vehicles of the alleged infringer, requesting information, documents or statements from the representatives and/or employees of the alleged infringer, pertaining to facts or documents which are deemed relevant, inspection of any documents, registries, financial, accounting and commercial documents or other records related to the activity conducted by the alleged infringer, irrespective of the place where they are stored or of the physical or electronic support on which they are kept, obtain copies/excerpts of the above documentation) which may be exercised provided that the following conditions are met: (a) There are signs that documents may be found or that information, deemed as

necessary for the mission’s fulfilment, may be obtained. (b) The order of the Competition Council’s president authorising the inspection was

previously obtained. A certified copy of such order must be delivered to the investigated infringer before the inspection.

(c) The correspondence between the alleged infringer and its lawyer(s), as well as

the preliminary documents drafted by the investigated infringer within and for the sole purposes of exercising its right to defence, cannot be collected or used as evidence during the proceedings conducted by the Competition Council.

Furthermore, the Competition Council’s inspectors may also investigate premises of the managers, administrative directors or other employees of the alleged infringer. Also, in this case, a court authorisation is required. Both the Competition Council’s order, and the decision by which the judge authorising the inspection must be previously notified to the investigated individual. B.4 Rules protecting trade secrets from disclosure in the course of


Protection of the secrecy of information before and during the proceedings in front of the Competition Council is efficiently ensured in Romania, through the actual transposition of

117

the relevant confidentiality provisions of both the Competition Law and related secondary legislation. As a matter of fact, hearings before the Competition Council are not public, precisely to ensure the non-disclosure of confidential information, including the parties’ trade secrets. Moreover, as a means of securing confidentiality, the Competition Council has adopted and applies norms according to which: • the persons who are required to provide documents or information by

competition inspectors, during the exercise of their inspection duties, can identify, by referral notice, on reasonable grounds, the data and documents which they believe to contain information qualified as business secrets or other confidential information. However, they cannot claim the confidentiality of the requested documents against the Competition Council, being obligated, under the penalty of a fine, to provide them in a complete form;

• any person may be heard individually or in the presence of other persons invited

to participate in the hearing, taking into account the parties’ legitimate interest of non-disclosure of their business secrets and other confidential information;

• the hearing of the parties is performed individually when the deeds in the

investigation report contemplate potential vertical agreements or unilateral behaviors and it is desired to keep the confidentiality of the deed attributable to the parties and of their business information;

• on request, the recordings (transcript, when it is performed) of the hearings may

be provided to the parties who participated in the hearing, in compliance with confidential nature of the contained information;

• the deliberation procedure is secret, being attended only by the members of the

Competition Council’s plenum; and • the confidential documents and information in the competition file could be

available to the authorised persons, for read or copy, only if such disclosure is performed in order to secure for the interested parties a right of defence.


As mentioned above, the hearings in front of the Competition Council are not public. However, when necessary or useful to establish the truth in the investigated case, the president of the Competition Council may admit the participation and hearing of the claimant, as well as of any individual or legal entity which holds relevant data and information, at their request. Claimants admitted to participate in the proceedings have the right to access certain documents of the Competition Council’s file (i.e., a non confidential version of the investigation report), file written documents, arguments and opinions, and to participate in the hearings. B.6 Interim measures

Until a final decision is awarded in the investigated case, the Competition Council may impose any interim measure which is deemed necessary, in case of urgency determined by the risk of producing serious and irreparably prejudices to the normal competition

118

environmental, when the Competition Council finds out, on a prima facie basis, anti-competitive deeds or behaviors which must be immediately forbidden. In any case, interim relief measures must be necessary, proportional, temporary and preservative, taking into account the legitimate interests of the affected parties. Decisions of the Competition Council awarding interim measures are communicated to the parties and can be appealed by the latter in court. The court may suspend them.


The Competition Council normally acts through specialised staff, with solid competition knowledge and practical expertise acquired in time. Nonetheless, if so required by the specific case at stake, technical experts could be assigned by the Competition Council’s president in pending cases before the Competition Council. B.8 Average duration of the proceedings

The duration of proceedings depends on several factors, of which the most crucial are the complexity of the investigated cases and the availability of the parties for the fast settlement of such cases. As a general rule, the Competition Council’s investigations last on an average from one to three years. However, there are cases in respect to which this term was exceeded. B.9 Rights of appeal against Competition Council decisions

The parties have the right of appeal against decisions of Competition Council to the administrative proceedings section of the competent Court of Appeal, within 30 days from the time the decision was communicated to the appealing party. The court has the power to annul or to confirm such decisions on points of law. The filing of an appeal with the courts does not per se suspend the enforceability of the Competition Council’s decision, although the appellant can file a request for its interim suspension. C. CIVIL LITIGATION


Litigation relating to damages actions in competition law is judged by ordinary civil courts, as any other civil cases. Moreover, although most part of the appeals against decisions issued by Competition Council are judged by the administrative proceedings section of the competent Court of Appeal, there are no significant procedural differences applicable to competition law cases and the civil procedural rules in general litigation are also observed by such section. However, some peculiarities exist in relation to certain procedural matters according to Competition Law (i.e., rights of parties in damages actions, jointly liability of an undertaking benefiting of fine immunity, publicity rules): (a) individuals and legal entities, who deem themselves prejudices by an anti-

competitive practice prohibited under Competition Law, may file a claim for damages within two years as of the date on which the Competition Council’s

119

decision upon which the damage action is based remained final or was maintained, partially or fully, by a final and irrevocable court decision;

(b) in damages actions judged by courts, the decisions of the Competition Council

awarded administrative fines creates a legal presumption in relation to the existence of the act producing damages, if such decisions remain final, totally or partially, by a final and irrevocable court decision;

(c) an undertaking which benefits from fine immunity is not jointly liable for the

damages caused by its participation in an anti-competitive practice prohibited by Art. 101 of TFEU which was sanctioned by the Competition Council; and

(d) the court may dispose the publishing of a final decision in mass media. Finally, in all cases in which the national courts directly apply the provisions of Articles 101 and 102 of the TFEU, upon the delivery to the parties of the decision subject to the exercise of the right of appeal, they will immediately send a copy of such decision to the European Commission, by means of the Competition Council.

Relevant Literature • DINCA, R., “Protection of Trade Secret in Private Law”, Universul Juridic

Publishing, Bucharest 2009; • DINCA, R., “Some considerations on notion of trade secrets” – “In honorem”

Studies Collection, Corneliu Barsan, Liviu Pop, Rosetti, Bucharest 2006; • POPESCU, T., “Study on protection of trade secrets in Romania” in Romanian

Journal of Intellectual Property no. 2/2003; • DINCA, R., “Protection of trade secrets by means of procedural civil law”, in

“Annals of Bucharest University” no. 1/2009; • DINCA, R., “Agreement on trade secret disclosure”, in “Dreptul” no. 9 and 10/

2009; • STOICA, C.I., DINCA, R., “Theoretical and practical considerations on the effects

of the TRIPS Agreement on Romanian law system” in Journal of Commercial Law no. 7-8/2001;

• COMAN, G., – “Competition in National and International Law”, Hamangiu

Publishing, 2011; • PRESCURE, T., “Competition Law”, Rosetti Publishing, 2004; • BUTACU, C., “Competition Law, Comments and Explanation”, All Beck Publishing,

2005; • COTUTIU A., SABAU G. V., “Romanian and Community Competition Law”, C. H.

Beck Publishing, Bucharest, 2008; • CAPATANA, O., “Competition Law. General Part” – Lumina Lex Publishing, 1998;

120

SLOVAK REPUBLIC



Slovak Law No. 136/2001 (“Act on Protection of Competition” or “Competition Act”) does not contain any provision specifically referring to trade secrets. In Slovakia, specific protection to trade secrets is granted under unfair competition law and criminal law. However, the general provisions contained in the Competition Act and relating to agreements restricting competition/concerted practices (Article 4 of the Competition Act) and abuses of dominant position (Article 8 of the Competition Act) may apply also to situations relating to the licensing, disclosure of (or refusal to disclose) trade secrets. Furthermore, like other National Competition Authorities and national courts within the European Union, the Slovak competition authority – Anti-Monopoly Office of the Slovak Republic (“AMÚ” or “Office”) – and the Slovak courts have the power to enforce Article 101 and Article 102 of the Treaty on the Functioning of the European Union (“TFEU”). In this respect, Slovak competition law may impact on trade secrets, but only in circumstances where the use of (or refusal to transfer) trade secrets have an impact on competition, which is the final object of competition law protection. A.2 Definition of trade secrets

The Competition Act does not contain a definition of trade secrets. The only definition of trade secrets in the Slovak jurisdiction is contained the Commercial Code. For further details, please refer to the Commercial and IP Chapter. A.3 Applicability of EU competition law principles

The Anti-Monopoly Office of the Slovak Republic does take into account the decisional practice of the European Commission (“Commission”), and Slovak competition law shall be interpreted in accordance with the principles of the European Community competition law. Similarly, the Commission’s decisions – together with the judgements of EU Tribunals – concerning the applicability of Articles 101 and 102 of the TFEU will impact on the conclusions that the AMÚ will draw when assessing agreements or abuses of dominant position. Moreover, Articles 101 and 102 of the TFEU are directly applicable. The Slovak national competition authority and courts have to take them into account and take care of the conformity of the national legislation with the community legislation. A.4 Decisional practice of the Slovakian Competition Authority

The decisional practice of the Slovak Anti-Monopoly Office does not expressly enter into the notion of trade secrets. The Anti-Monopoly Office usually uses the expression “commercial sensitive information”, for example in cases relating to the exchange of sensitive information as evidence of the existence of horizontal fix process or share the market, which are not, however, relevant for the purpose of this Study.

No decision expressly identifies as abusive situation where a dominant undertaking has obtained from its weaker contractual counterparties information or know-how that may qualify as trade secrets.

121


The Slovak civil courts have not dealt with competition law issues involving trade secrets. A.6 Inadequacies and need for a European harmonised and common


A European harmonised and common legislation on trades secrets may avoid different approaches at the national level towards the applicability of competition law – and in particular of provisions prohibiting abuses of dominant position – in respect to trade secrets. B. POWERS OF THE AMÚ AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of AMÚ investigations

The Anti-Monopoly Office of the Slovak Republic can start investigations for suspected breach of competition law on its own initiative or upon a complaint by any interested third party (including consumer or trade associations, administrative authorities, competitors, customers, or individuals, e.g., former employees). B.2 AMÚ sanctioning powers

If the Anti-Monopoly Office of the Slovak Republic, as a result of an investigation, finds a breach of competition law, it will order the unlawful conduct to be brought to an end (if still ongoing); it can further order the removal of the breach’s consequences and impose a fine up to 10% of the turnover of the undertaking involved for the preceding closed accounting period. Alternatively, the Anti-Monopoly Office can accept and render binding commitments submitted by the party(ies). B.3 Powers to carry out inspections

Officials of the Anti-Monopoly Office of the Slovak Republic and those entrusted with the fulfilment of tasks falling within the Office's jurisdiction have the right to request from undertakings information and documents necessary for the Office's activities, especially accounting and trade documents or legal documents, regardless of the medium on which they are recorded, and make copies of and notes from these documents. In order to obtain these documents and information, officials have the right: (a) to seal this information or documents or to seal the buildings and premises in

which an inspection is carried out for a specified time period and to the extent necessary for the Anti-Monopoly Office to conduct an investigation; and

(b) to take away this information and these documents for the necessary time with

the aim of making copies or gaining access to information if the Anti-Monopoly Office is unable, primarily for technical reasons, to gain access to information or make copies of documents during the performance of an inspection. When fulfilling their tasks, officials have the right, based on a written authorisation by the office chairperson, to enter any buildings, premises and means of transport of an undertaking, which are related to the activities or conduct of the undertaking, in order to carry out an inspection.

122

In case of reasonable suspicion that information or documents related to the activities or conduct of an undertaking, based on which a serious restriction of competition may be proven, are located in an undertaking's buildings, premises or means of transport other than those listed above, as well as in private buildings, private premises or private means of transport of the undertaking's employees, the Anti-Monopoly Office can issue a decision on an inspection to be performed. An appeal may be lodged against a decision on the performance of an inspection, which, however, does not have a suspensive effect. An inspection may only be performed on the basis of a court's approval of the inspection. B.4 Rules protecting trade secrets from disclosure in the course of AMÚ

proceedings

Articles 28, 40 and 41 of the Act on protection of economic competition relate to the handling of secret information during proceedings of the Anti-Monopoly Office.

Parties wishing to safeguard the confidentiality or secrecy of the information collected or submitted during an investigation must indicate the information or documents they consider being confidential and must explain in writing the reason of the confidential nature of information or documents or their designation as business secrets. Confidentiality of such information shall, however, constitute no obstacle to its disclosure if this is necessary for a decision and if the party to the proceedings does not provide any other wording of the information and documents that does not contain business secrets or is not confidential. Information or documents obtained by the Office may only be used for the purpose of the proceedings according to the Competition Act, unless special legislation provides otherwise. Furthermore, officials are required to maintain confidentiality of information subject to business secrecy or designated as confidential by an undertaking, of which they become aware during the course of the proceedings. Moreover, the Office is required to take due account of preserving the undertakings' right to protect their business secrets and confidential information when publishing a decision. B.5 Possibility for the claimant to participate in the proceedings

Pursuant to Slovakian competition law, the claimant is not considered as a party to the proceedings. On the basis of a request submitted by claimant, the Office shall inform him in writing of further procedure regarding the matter within two months following the date of receipt of the request. However, claimants – as well as any third party (for example, consumers, suppliers, purchasers or competitors to a party to the proceedings) – may request in writing that they want to be heard with respect to the subject matter of the proceedings. In order to be heard, however, they have to demonstrate an interest in the matter. B.6 Interim measures

The Anti-Monopoly Office has no power to issue interim injunctions.

123


The Anti-Monopoly Office may involve technical experts, in case of need. B.8 Average duration of the proceedings

The Anti-Monopoly Office shall issue a decision within six months following the date on which the proceedings commenced. In complicated cases, however, the office chairperson may allow, also repeatedly, an appropriate extension of the time limit for issuing a decision by a maximum of 24 months in total. B.9 Rights of appeal against AMÚ decisions

The parties to the proceedings can lodge an appeal against the first instance decision of the Anti-Monopoly Office. The appeal has to be submitted to the Council of the Office - a collective decision-making body composed of seven members, of which five are external experts. The appeal has to be filed within 15 days from the date on which the appealing party was notified of the decision.

If an undertaking has objections against a decision of the Council of the Office, it can file a court action to the Regional Court in Bratislava. The court action has to be filed within two months from the date on which the party was notified of the second instance decision. The filing of a court action does not per se suspend the enforceability of the decision, although the appellant can file a petition for its interim suspension. The judgement of the regional court can be appealed to the Supreme Court of the Slovak Republic. C. CIVIL LITIGATION


General litigation applies to violation of the trade secrets under the Commercial Code. The disputes are heard by three selected civil courts (in Bratislava, Banska Bystrica and Kosice). The aim of appointing only three courts to hear such cases is to improve quality of process and speed up the proceedings. There are no significant differences between general litigation and litigation relating to competition law violations.

Relevant Literature • KALESNÁ K., “Dominant position as a criterion of assessing concentrations”, Legal

Horizon. 2004, vol. 41, No. 1, p. 45. • MUNKOVA, J. - SVOBODA, P. - KINDL, J., “Competition Law”, Prague: C.H.BECK,

2006. • ELIÁŠ, BEJČEK, HAJN, JEŽEK a kol.: “Course of the Commercial Law”, general

part, 4th Edition, Prague: C.H.BECK, 2004, p.396. • BEJČEK, J. “Objective conflicts in competition law”, Lawyer, 2007, vol. 146, No.

6, p. 669. • BEJČEK, J. “Regulation and competition”, Legal Forum, 2007, vol. 4, No. 3, p. 89.

124

• Development of competition law, History of the Office for Protection of Economic Competition, [cit. 2010-02-08], available at: http://www.compet.cz/ouradu/historie-uradu/

• UTEŠENÝ, P. “Market power and intellectual property in European competition

law”, Prague Publishing, C.H.Beck, 2005, p. 7. • BĚHAN P., “Dominant position on the market and its abuse, Legal regulation in

EU and in Czech Republic”, Prague Publishing: Prospektrum publisher, 2002, p.98-99.

• KINDL, J., “Term violation of economic competition – general resources and

specific applications”, Legal Scopes, 2005, No.10, p.349.

125

SLOVENIA



The Slovenian Prevention of the Restriction of Competition Act (Official Gazette of the RS, no. 36/2008, as amended, hereinafter: “Prevention Act”) does not contain any provisions specifically with respect to trade secrets (other than those regarding protection of trade secrets during proceedings). Protection of trade secrets in Slovenia is granted under IP law, criminal law and unfair competition law. The Prevention Act mainly includes provisions regarding the prohibition of restrictive business practices and cartels (Article 6 of the Prevention Act) and the prohibition of abuse of dominant position on the market (Article 9 of the Prevention Act). Furthermore, the Prevention Act also serves as a means of enforcement of Articles 101 and 102 of the Treaty on the Functioning of the European Union (“TFEU”). In this respect, Slovenian competition law may have an effect on trade secrets only in cases where the disclosure or use of trade secrets somehow consists in one of the business practices prohibited or regulated by the Prevention. This essentially means that trade secrets are substantively considered in competition law only when their use/protection/disclosure could have a direct effect on competition. A.2 Definition of trade secrets

As a general remark, it should be noted that disputes dealing with trade secrets as such are usually argued in the context of civil law or criminal law (and unfair competition law). The courts in those proceedings most often refer to the definition provided by the Companies Act (in this respect, please refer to the Commercial and IP Chapter). The Prevention Act, however, defines business secrets as: “information, the disclosure of which would result in significant damage to its owner, and are only known to a restricted number of people” (Article 3). A.3 Applicability of EU competition law principles

Slovenian competition law is interpreted in accordance with the principles of the European Community competition law. Accordingly, if certain restrictive business practices are considered to be in breach of EU competition law provisions (namely Articles 101-102 TFEU), the Competition Protection Office (the Slovenian national competition authority, “CPO”) will also take into account the community law on the matter. In addition, the case-law of the European Court of Justice and other European tribunals, (as well as opinions and official interpretations set forth by the EU Commission) concerning the applicability of Articles 101-102 TFEU, will affect the content of decisions made by the CPO and the Slovenian jurisprudence. In this respect, the EU principles on competition law are applicable in Slovenian jurisdiction, although it is not common court practice to mention them specifically in their judgements. A.4 Decisional practice of the Competition Protection Office

There are no decisions of the CPO specifically dealing with the application of competition law provisions in relation to trade secrets. However, it is worth mentioning a decision which is apparently relevant:

126

Decision no. 134, dated 17 June 2008, concerning Slovenian Post Office The Slovenian Post Office adopted certain specific criteria to grant additional discounts to its clients. However, the criteria for granting such discounts were not publicly available (and may accordingly be considered as business secret). The Slovenian Post Office was forced to adopt the following measures, in order to avoid being fined for restrictive business practices: • Grant additional discounts to clients who fulfil the criteria specified in the

instructions, whereas the criteria and instructions will be transparent, objectified, non-discriminatory and cost-justified.

• Publish the instructions on the fulfilment of criteria necessary for granting

additional discounts publicly on its webpage. Since the reasoning for the CPO’s decision is not publicly available, it is not possible to conclude that the Slovenian Post Office deemed the criteria for granting discounts as its business secret, but it is reasonable to assume that this was in fact the case. As can be discernible from the operative part of the decision, the CPO regarded the non-disclosure of such information to be infringing the provisions of competition law (namely Article 6 of the Prevention Act). The decisional practice of the CPO has also dealt with exchanges of “sensitive business information” relating to prices and other conditions in the market. Such decisional practice will not be, however, analysed since it does not pertain to the purpose of the Study. From the above, it is possible to conclude that the practice of the CPO in Slovenia with respect to trade secrets perceived from the standpoint of competition law is very scarce. No decision, for example, identifies a situation where a dominant undertaking has obtained from its weaker contractual counterparties information or know-how that may qualify as trade secrets as abuse of a dominant position; no decision yet has clearly labelled the refusal to disclose certain information to be a breach of the Prevention Act. Trade secrets are, in the context of competition law, most often mentioned in a procedural sense (i.e., the obligation of the organs of the CPO to safeguard trade secrets with which they become familiar during the investigation). A.5 Civil court judgements

There are no decisions rendered by civil courts available that would deal with competition law issues involving trade secrets. A.6 Inadequacies and need for a European harmonised and common


The notion of trade secrets very rarely even comes into consideration in the context of competition law in Slovenia. This being said, a European harmonized and common legislation on trade secrets would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights.

127

B. POWERS OF THE CPO AND PROTECTION OF TRADE SECRETS IN THE ADMINISTRATIVE PROCEDURE

B.1 Starting of CPO investigations

The Prevention Act provides in Article 23 that the Competition Protection Office may initiate proceedings ex officio. B.2 CPO sanctioning powers

In case of an abuse of dominant position or a restrictive agreement, a fine of up to 10% of the worldwide annual turnover of an undertaking in the preceding fiscal year can be imposed on a legal entity, individual entrepreneur or an individual, who autonomously engages in a professional activity. In addition, fines from EUR5,000 to EUR30,000 may be imposed on responsible individuals of the undertaking or of the individual entrepreneur. B.3 Powers to carry out inspections

The CPO may, in the frame of the ongoing investigation, undertake the following measures: • Enter and conduct a full search of the premises of the company. • Search and review all business records, documentation and data, regardless of

the for in which they are in (computer databases, paper documentation, etc.). • Obtain copies of business records and/or other documentation. • Seal the premises for the duration of the investigation. • Seize objects and documentation for the maximum period of 20 days. • Request a written explanation of any fact or document which is relevant to the

purposes of the investigation, from any employee, representative, or member of any of the organs of the company.

• Undertake all other measures which are compliant with the purpose of the

investigation. In order to begin the investigation and undertake any of the above listed measures, the national competition authority issues a formal decision on the beginning of an investigation against a specific company (Article 28 of the Prevention Act). In addition, if there is a reasonable suspicion that documents, business records and other data, relevant for the investigation, are located in the premises of a different company (not the one that is being investigated) or in the private premises of any employee of the investigated company, the national competition authority may also conduct a search of these premises after having obtained search warrant, issued by the competent court in Ljubljana.

128

B.4 Rules protecting trade secrets from disclosure in the course of CPO proceedings

The Prevention Act established the obligation of the CPO and all its officers to treat all confidential information which they come into contact with during the proceedings as confidential in compliance with the rules determining protection of such information. Furthermore, the proceedings of the CPO are not public. Only the parties in the proceedings have the right to review documentation relating to the proceedings. However, the CPO may deny access to a certain party, if the right to review documentation conflicts with the right of another party to protect its trade secrets. B.5 Possibility for the claimant to participate in the proceedings

Any person submitting the initiative, complaint, message or other document is not a party to the procedure. However, persons claiming entry to the procedure in order to protect their own legal interests may lodge an application to participate in the procedure within 30 days from the day of publication of the order on the commencement of procedure on the website of the CPO. Such application must contain statements and evidence that demonstrate the legal interest in participating in the procedure. Parties to the proceedings have a right to review documentation relating to the proceedings and make transcripts and copies, and attend at the hearings (the CPO may, at its discretion, decide without conducting a hearing). B.6 Interim measures

Article 38 of the Prevention Act provides that, in cases of possible existence of a violation of provisions of the Prevention Act or Articles 101 or 102 of the TFEU, and if there is an inherent risk of severe damage being caused to the effectiveness of the competition on the market, the CPO may issue a Resolution on temporary measures. The measures may include whatever is reasonably necessary to prevent further actions which are allegedly infringing the relevant provisions of the law. B.7 Dealing with issues requiring specific technical knowledge

According to the Article 29 of the Prevention Act, the investigation is carried out by persons employed at the CPO. However, when specific technical expertise is required, specific tasks may be entrusted to specialised agencies, institutions or individuals, if this does not conflict with the public interest or the interest of the parties. B.8 Average duration of the proceedings

The average duration of the proceedings can be estimated at approximately 18-24 months.

129

B.9 Rights of appeal against CPO decisions

There is a possibility to initiate judicial proceedings against a decision issued by the national competition authority. In that event, the issue is decided by the Supreme Court of the Republic of Slovenia. C. CIVIL LITIGATION


The Act provides that any company which intentionally or negligently violates its provisions, or provisions included in Article 101 and 102 of the TFEU, is liable for any damages that occurs as a result of the violation. The court must immediately notify the national competition authority of any litigation procedure which concerns a claim for damages resulting from violation of the Prevention of the Restriction of Competition Act or Articles 101-1022 of the TFEU. In other aspects, any litigation for damages resulting from violations of the abovementioned acts is conducted according to the rules of general (civil) litigation.

Relevant Literature CAIKA, T., “Komercnoslēpuma aizsardzības: tiesības vai pienākums?”, SALDO, 8 March 2012.

130

SPAIN



Neither the Spanish Competition Act 15/2007 (Ley 15/2007 de Defensa de la Competencia, “LDC”) nor its implementing regulations provide specific provisions on the protection of trade secrets. In Spain, specific protection to trade secrets is granted under unfair competition and criminal regulations. However, it must be conceded that general provisions of the LDC do deal with this topic, albeit indirectly, when it is possible to detect a restriction of competition. In addition, the Spanish Competition Commission (Comisión Nacional de la Competencia, “CNC”) and the Spanish Commercial Courts have the power to enforce Article 101 and Article 102 of the Treaty on the Functioning of the European Union (“TFEU”) which, under some circumstances, may have an impact on trade secrets. Pursuant to Article 3 LDC, unfair acts (such the breach of trade secrets) will be considered as an infringement of the LDC provided that they ultimately affect the public interest by distorting competition on the market. Article 3 provides as follows: “The Spanish Competition Commission or the competent bodies of the Autonomous Communities shall apply the same provisions laid out in this Act for prohibited conduct to unfair competition practices which affect the public interest by the distortion of free competition”. Bearing in mind that Article 13 of the Spanish Unfair Competition Act 3/1991 (Ley de Competencia Desleal, “Unfair Competition Act”) prohibits the unauthorised disclosure or exploitation of trade secrets and further taking into account that Article 14 of the Unfair Competition Act prohibits the inducement of employees, suppliers, customers and others to breach their respective contractual obligations with competitors (e.g., the obligation not to disclose trade secrets), a joint application of Article 3 LDC and Articles 13 and 14 Unfair Competition Act could be used to seek protection of trade secrets also from the Spanish competition authorities, at either the national or the regional levels. However, the current competition legal framework requires the Spanish competition authorities to apply a high threshold that could be described as a ‘Market Distortion Test’, according to which the alleged conduct must (i) violate the Unfair Competition Act, (ii) affect free competition in the [Spanish] market, and (iii) be significant enough to cause a serious disturbance in the mechanisms regulating the market (the “Market Distortion Test”). Needless to say, this assessment shall be carried out by the CNC, or the regional competition authorities, on a case-by-case basis. In addition to the above, Article 1.1 LDC, which essentially mirrors Article 101.1 TFEU, may apply to agreements relating to trade secrets that prevent, restrict or distort competition. The most relevant conducts in this respect are exchanges of information between competitors involving trade secrets which, under certain conditions, lead to a very serious infringement of the referred provision but are not relevant for the purpose of this Study. In view of the above, it is fair to say that while the Spanish competition framework does not include specific measures protecting trade secrets from being illicitly disclosed, it

131

does foresee that some conduct indeed violate competition law where they hinder effective competition. A.2 Definition of trade secrets

Neither the LDC nor its implementing regulations provide a definition of trade secrets. However, with specific reference to the enforceability of Article 3 LDC against unfair acts (e.g., trade secrets disclosure), it shall be stressed that, as indicated, such provision shall be applied jointly with the provisions of the Unfair Competition Act. In this regard, it is possible to find several case laws of the Spanish courts and tribunals dealing with trade secrets within the framework of the Unfair Competition Act. In this field, the definition generally acknowledged as the most important in case-law is the one deriving from conditions required by TRIPS Agreement (Art. 39.2) namely: (i) The information must be secret in the sense that 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) The information must have commercial value because it is secret. (iii) The information must have been subject to reasonable steps under the

circumstances, by the person lawfully in control of the information, to keep it secret.

A.3 Applicability of EU competition law principles

The CNC and Spanish commercial courts do take into account the decisional practice of the European Commission, and the LDC shall be interpreted in accordance with the principles of the European competition law. In addition, when assessing competition matters, the CNC will generally follow the various non-regulatory documents prepared by the European Commission (e.g., notices, guidelines, etc). Similarly, the European Commission’s decisions – together with the judgements of EU Tribunals – concerning the applicability of Articles 101 and 102 of the TFEU will have an impact on the conclusions of the CNC or Spanish courts when assessing competition-related issues (including those which may concern or affect trade secrets). A.4 Decisional practice of the Spanish Competition Commission

As already indicated, the threshold set out by the Market Distortion Test makes the application of competition law provisions to protect trade secrets virtually impossible in Spain. This is evidenced by the fact that in the Resopal Case16, the single precedent where the Spanish competition authorities addressed this topic, the TDC only carried out a superficial analysis and ultimately considered that the Market Distortion Test was not met. In particular, in the Resopal Case, which was initiated following a claim by the undertaking bearing the same name against an alleged anti-competitive conduct carried out by several competitors with the purpose of excluding it from the marketplace, the TDC stated the following:

16 See TDC Decision of 31 March 1997, in Case R 189/96, Resopal (Ground for the Decision No. 5.1).

132

“MACTAC’s behaviour is not covered by the provisions of the Unfair Competition Act [referred to in the claim].

Article 13 - "Breach of trade secrets" – is not applicable since MACTAC did not have access to Resopal’s client list, which is the trade secret referred to by the claimant, nor has exploited such list to their advantage in the event it ever came in their possession. MACTAC and Resopal have different clients: the clients of MACTAC are distributors or wholesalers –including Resopal–, which adapt the product for its final sale to consumers, while Resopal’s clients are final customers. MACTAC has not taken Resopal’s customers.

Article 14 - "Inducement to breach of contract" – is not applicable either, as there is no evidence that MACTAC has led to the regular or irregular termination of any agreement –business or franchise–, undertaken between Resopal and others, nor has been an agreement to eliminate Resopal from the market (…).”

Moreover, there are very few precedents in which a claim relating to an unfair practice has succeeded to meet the Market Distortion Test. In this regard, attention should be drawn to the recent Gas Natural Case17, where the CNC applied Article 3 LDC jointly with Articles 5, 9 and 10 Unfair Competition Act to a commercial practice carried out by Gas Natural consisting in sending letters to over five million customers requesting them not to change their energy supplier, raising doubts on the reliability of the Spanish utility’s competitors. In particular, the CNC considered the following:

“In short, to the extent that the letter is aimed at casting doubts on the benefits of switching supplier, a key element of competition in the market of natural gas, (…) it is affecting the public interest in what concerns the liberalization of a basic service for a large part of the Spanish population, which taking into consideration the circumstances described and the massive amount of letters sent, it is possible to say that it can be regarded as an unfair competition practice, objectively suitable to significantly hinder or distort competition. The Council concludes that the letter sent by Gas Natural, bearing in mind the identity of the sender (…), its unfair content (affecting, on the supply side, all current and future competitors), its range (more than five million customers), and its recipients (a significant part of the demand, i.e., almost all domestic consumers and SMEs), shall be considered an unfair practice, as defined in article 3 LDC”.

The relevance of this precedent lays on the fact that it appears to confirm that the application of Article 3 LDC depends on a narrow interpretation of the Market Distortion Test, according to which only unfair practices carried out by major undertakings and affecting a very high proportion of the demand will be prohibited. It should be furthermore mentioned that the CNC has dealt with several cases relating to the exchange of sensitive information between competitors. However, these decisions do not appear relevant for the purpose of this chapter and will be not analysed. A.5 Civil court judgements

No decisions rendered by civil courts dealing with competition law issues involving trade secrets have been retrieved.

17 See CNC Decision of 29 July 2011 in Case S/0184/09, Gas Natural (Ground for Decision No. 5).

133

A.6 Inadequacies and need for a European harmonised and common legislation specifically targeted to trade secrets

The level of protection granted by the Spanish competition law on trade secrets is, in our view, clearly inadequate. This is evidenced by the fact that no case in which the Spanish competition authorities had afforded protection to undertakings whose trade secrets had been illicitly extracted and used to compete unfairly on the market has been retrieved. Indeed, the aforementioned Market Distortion Test has proven to be a burdensome and virtually insurmountable threshold to be met, since it ultimately requires the claimant to evidence not only that the alleged unfair conduct (i.e., the use of trade secrets to compete unfairly on the market) has taken place, but also that, beyond its own private damage, such conduct has affected free competition in the Spanish market, and is significant enough to cause a serious disturbance in the mechanisms regulating the market. This high evidential threshold, together with the lack of a unified definition of trade secret, are in our view the two key elements that conjure to make the current level of protection granted by the LDC to trade secrets insufficient. In view of the above, a European harmonised and common legislation specifically targeted to trade secrets would be positive and would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights. B. POWERS OF THE CNC AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of CNC investigations

Pursuant to Article 49 LDC, proceedings relating to anti-competitive behaviours may indeed be initiated ex officio by the Directorate of Investigation of the CNC (the branch of the CNC entrusted with investigative powers). Moreover, proceedings may be initiated either at request of the Council of the CNC (the executive branch of the CNC), or after receiving a complaint from individuals or undertakings, which do not need to be affected by the alleged infringement to be eligible. The final decision to initiate proceedings will depend on the existing evidence of the alleged breach of the LDC. B.2 CNC sanctioning powers

In case of infringement of the LDC, the CNC shall adopt a decision which will declare that an infringement of the LDC has been carried out. In addition, the CNC is empowered to impose monetary fines on the infringing undertakings (the amount of which depends on the gravity of the infringement and may be, for very serious violations, up to 10% of the total turnover of the infringing undertaking), request them to cease their anti-competitive behaviour and/or to remove the effects of such conduct and, in cases dealing with abuse of dominance, the CNC may impose structural remedies on the infringing undertaking. Moreover, the CNC may impose a fine of up to EUR60,000 on the directors or legal representatives of the infringing undertakings, provided that they have been personally involved in the adoption of the anti-competitive conduct. More particularly, where an infringement of Article 3 LDC has been evidenced, the CNC may impose fines of up to 5% of the total annual turnover (achieved during the previous fiscal year) of the infringing undertaking. B.3 Powers to carry out inspections

134

Pursuant to Article 40 LDC, CNC officials may carry out the necessary inspections to ensure proper compliance with the Law. In the course of their inspections, officials may examine, obtain copies or take excerpts from books and documents, including accounting documents, irrespective of the devices in which they are stored. Original documents can be retained for a maximum period of 10 days. In addition, officials may require employees to provide on-the-spot explanations. Furthermore, officials have the right to enter premises either with the consent of the employees or by means of a court order. The CNC must request such court order from the Court for Administrative Proceedings, which must make its decision within 48 hours. Officials are also authorised to enter homes of directors, managers or other members of the staff of the undertakings concerned. In this regard, in the event that the company obstructs or impedes an inspection, the LDC enables the CNC to impose a fine of up to 1% of the company’s turnover in the preceding business year. B.4 Rules protecting trade secrets from disclosure in the course of CNC

proceedings

Pursuant to Article 31 RDC, all interested parties may access the case record and obtain copies of all non-confidential documents included therein. In this regard, pursuant to Article 42 LDC the CNC may, when deemed necessary or upon request of an interested party, declare as confidential any document or data within the course of an investigation. Furthermore, pursuant to Article 43 LDC, all persons involved in a CNC proceeding or who are aware of the proceeding or know or have had access to its records by reason of their profession, position or their participation as an interested party shall keep secret on all facts that they have known and on any information of confidential nature which has come to their knowledge in the exercise of their duties. B.5 Possibility for the claimant to participate in the proceedings

The claimant, as well as other interested parties, may participate by cooperating with the CNC in providing all the information and documentation eventually requested by its officials and by submitting their respective allegations during the course of the proceedings. B.6 Interim measures

Pursuant to Article 40 of Royal Decree 261/2008, of 22 February, implementing the Regulation on the Defence of Competition (Reglamento de Defensa de la Competencia, “RDC”), the Council of the CNC may adopt interim measures to cease the conducts referred to by the case or to impose certain conditions thereon to avoid the harm they may cause. However, interim measures capable of generating irreparable harm to the interested parties or that imply violation of fundamental rights cannot be ordered. B.7 Dealing with issues requiring specific technical knowledge

The staff of the Directorate of Investigation is mainly comprised of economists and law graduates. In addition, pursuant to Article 21 LDC, the CNC may temporally hire technical experts on any issue in which they might deem necessary to obtain specific advice.

135


With regard to the duration of the proceedings, pursuant to Article 36.1 LDC the Council of the CNC shall issue and notify a final Decision on anti-competitive conduct within a maximum term of 18 months, as from the moment the formal decision to initiate the case was adopted. However, pursuant to Article 37 LDC, the maximum 18-month term can be suspended or extended, provided that certain circumstances are met. Suspension is usually adopted in complex cases and when several parties are involved. B.9 Rights of appeal against CNC decisions

Final Decisions of the Council of the CNC can be challenged before the Spanish National Court (Audiencia Nacional) within a two-month period following their notification to the parties involved. Decisions of regional competition authorities can be challenged before the respective regional High Court of Justice (Tribunal Superior de Justicia). It is possible to request the Court to grant injunction measures (e.g., request the suspension of the payment of the imposed fine). C. CIVIL LITIGATION


Article 86-ter of Act 6/1985 of 1 July, on Judicial Power (Ley Orgánica del Poder Judicial) enables the Spanish Commercial Courts to apply EU and national competition law. Private competition actions are based on Article 249 of the Spanish Civil Procedural Act and Article 18.5 Unfair Competition Law, read jointly with Article 1902 of the Spanish Civil Code, which regulates liability in tort and is based on the principle of the general duty not to cause harm to others and to compensate any damage caused (alterum non laedere). The decisions of the commercial courts are subject to further appeal before a specific specialised section of the Provincial Court of Appeal (Audiencia Provincial), with tribunals conveniently located at the capital of each Spanish province. Finally, it is possible to file a final appeal before the civil section of the Spanish Supreme Court (Tribunal Supremo). Notwithstanding the above, attention should be drawn to the fact that Articles 434.3 and 465.5 of the Spanish Civil Procedural Act provide that, if the court becomes aware of the existence of ongoing administrative proceedings carried out before the European Commission, the CNC or any regional competition authority, the court may suspend the case until the respective authority reaches a final decision, provided that this administrative decision is deemed to have a direct impact on the final ruling.

Relevant Literature • TRONCOSO Y REIGADA, M., “El marco normativo de los ilícitos desleales de

relevancia antitrust (reflexiones en torno al artículo 7 de la LDC), Estudios jurídicos en homenaje al profesor Aurelio Menéndez (1996)”. Pp 1035-1082.

• FONT SEGURA, A., “La Protección internacional del Secreto Empresarial”, Eurolex

(1999), pp. 67-73.

136

• LLOBREGAT HURTADO, M.L., “Aproximación al concepto de secreto empresarial en Derecho Español y Derecho Norteamericano”, Cedes (1999), pp 92-101.

137

SWEDEN



The Swedish Competition Act (SFS 2008:579) (Sw. konkurrenslagen) (the “Competition Act”), only contains, in Chapter 5, provisions relating to the protection of “trade secrets of a technical nature” from disclosure during the Swedish Competition Authority (Sw. Konkurrensverket) (the “SCA”) proceedings. From a substantive point of view, the Competition Act contains two main provisions, respectively, prohibiting anti-competitive cooperation (Chapter 2 Section 1) and the abuse of a dominant position (Chapter 2 Section 7) that are mainly identical to the corresponding Articles 101 and 102 of the Treaty of the Functioning of the European Union ("TFEU"). Furthermore, the SCA and the Swedish courts can enforce the Swedish provision as well as the EU provisions, which are commonly applied simultaneously and in parallel by the SCA and the courts. The above provisions can have an impact on trade secrets, in the sense that an authority may require disclosure of trade secrets in relation e.g., to conduct which amounts to an abuse of a dominant position with respect to refusal to license, or other conduct where the refusal to disclose trade secrets would limit competition. A.2 Definition of trade secrets

The application of competition law has not led to decisions or judgements by the SCA or Sweden courts clearly dealing with trade secrets. The available case law only deals with a general concept of know-how and with the concept of competitively sensitive information. Accordingly, the notion of “trade secrets of technical nature” has not been specifically dealt with. Notwithstanding the above, it is likely that guidance would be sought from Section 1 of the Act (1990:409) on the Protection of Trade Secrets (Sw. Lag om skydd för företagshemligheter), which defines trade secrets as “[…]such information on business relations or operating conditions of a business in somebody’s business which is kept secret and of which the disclosure is aimed to cause damage to the business proprietor from a competition point of view". A.3 Applicability of EU competition law principles

The SCA, as well as the Swedish courts, not only may directly apply (simultaneously and in parallel with the Swedish provisions of the Competition Act) Articles 101 and 102 of the TFEU, but also do apply and take into account, in reviewing potential anti-competitive practices, the general principles and case-law developed by the European Commission and the European Tribunals. A.4 Decisional practice of the Swedish Competition Authority

The SCA has not yet handled any case where there has been an issue of trade secrets in relation to an investigation under the competition rules. The SCA has handled cases which have involved matters concerning IP rights, but there have been no issues relating to trade secrets from a competition law perspective in these cases.

138


The Swedish courts have never dealt with competition law issues involving trade secrets. A.6 Inadequacies and need for a European harmonised and common


The issue of trade secrets in relation to competition law has not been dealt with yet by the SCA or the Swedish courts. The competition rules aim to protect competition on the market, whereby trade secrets could be of relevance where, e.g., the exercise or refusal to disclose the trade secrets would restrict competition. Accordingly, competition law issues relating to trade secrets would only occur in rare circumstances. Even though the relation between competition law and trade secrets has not yet amounted to an issue under Swedish competition law, this does not exclude that such an issue may arise in the future. Considering that IP law and competition law are, to a large extent, harmonised within the European Union, the protection of trade secrets could benefit from being treated equally within the European Union. This would, to a further extent, provide for a fair and transparent playing field for actors which invest in research and development and would reduce uncertainties which ultimately could pose as a threat to the willingness to innovate. B. POWERS OF THE SCA AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of SCA proceedings

The SCA may initiate an investigation in relation to a suspected breach of the Swedish and/or EU competition rules on its own initiative or following a complaint by a third party. An investigation can also stem from a leniency application submitted by an undertaking which has been involved in an illicit cartel. It is not possible to apply for leniency in cases concerning abuse of a dominant position. B.2 SCA sanctioning powers

The Stockholm District Court may, at the request of the SCA, order an undertaking to pay an administrative fine for intentional or negligent infringement of the competition rules, in accordance with Chapter 3 Section 5 of the Competition Act. Fines may not exceed 10% of the undertaking’s turnover the preceding year. The SCA can also accept and render binding commitments submitted by the undertakings in accordance with Chapter 3 Section 4 of the Competition Act. The Swedish courts may also, at the request of the SCA, impose a trading prohibition on a person who exercises management control over an undertaking in accordance with Chapter 3 Section 24 of the Competition Act. The Competition Act does not contain any criminal sanctions. B.3 Powers to carry out inspections

Upon SCA application, the Stockholm District Court may empower it to carry out an inspection on the premises of an undertaking to establish whether the latter has infringed any of the prohibitions of the Competition Act and/or the TFEU. When carrying out an inspection, the SCA has the powers to (i) examine the books and other business

139

records (including hard drives and other electronic devices); (ii) take copies of or extracts from the books and business records and mirror copies of hard drives, USB memory sticks and other electronic devices; (iii) ask for oral explanations on the spot and access any premises, land, means of transport and other areas. The SCA may also search private homes, but this requires specific permission from the court. B.4 Rules protecting trade secrets from disclosure in the course of SCA

proceedings

The SCA may, in accordance with Chapter 5 Section 1 of the Competition Act, order undertakings or other parties to supply information, documents or other material to the SCA, as well as to appear at hearings if deemed necessary. The SCA may also carry out inspections, and is, to this end, empowered to search, examine and take copies of books, business records and may also request oral explanations on the spot, in accordance with Chapter 5 Section 6 of the Competition Act. However, in accordance with Chapter 5 Section 12 of the Competition Act, there is no obligation to disclose trade secrets of a technical nature in relation to measures taken by the SCA pursuant to these provisions.

During the course of the investigation, the need for confidential treatment is re-examined and trade secrets may be granted confidential treatment in accordance with Chapter 30 Section 1 of the Public Access to Information and Secrecy Act. Confidential treatment in relation to third parties will only be granted where the information relates to business relations or operating conditions of a business in somebody's business which is kept secret and of which the disclosure is aimed to cause damage to the business proprietors from a competition point of view. Also personal information would, under certain circumstances, be granted confidential treatment. Accordingly, a third party's right to access personal, commercial, industrial and financial information which is of confidential nature may be limited. All material from the investigation, which is in the SCA's possession, is considered public after an investigation has been closed, unless it is granted confidential treatment due to the nature of the information, i.e., where the information relates to business relations or personal relations. B.5 Possibility for the claimant to participate in the proceedings

Under the Swedish Code of Judicial Procedure (SFS 1942:740 (Sw. rättegångsbalken), a claimant may enter as an intervenient to the proceedings, provided the court has approved the intervention. An intervention does not give the intervenient right to state any claims on his own behalf, nor can the original parties to the dispute state any claims to the intervenient. The intervenient may take any procedural act open to the party, but it cannot amend the original party's action or otherwise act in opposition to the party. The intervenient role is to support the SCA. B.6 Interim measures

If an undertaking infringes any of the prohibitions contained in the Competition Act, the SCA may order the undertaking to terminate the infringement in accordance with

140

Chapter 3 Section 1 of the Competition Act18, and, theoretically, also to disclose trade secrets, where a refusal to disclose the same would limit competition. B.7 Dealing with issues requiring specific technical knowledge

The SCA may involve technical expertise if required in relation to cases which involve, e.g., technical trade secrets. B.8 Average duration of the proceedings

The average duration of SCA proceedings is difficult to estimate, as there are some cases which have been ongoing for several years. However, as regards cases which are not complex, the proceedings will usually take between one to two years. B.9 Rights of appeal against SCA decisions

Decisions by the SCA may be appealed to the Market court in accordance with Chapter 7 Section 1 of the Competition Act. C. CIVIL LITIGATION


Civil litigation cases regarding claim for damages relating to competition law violations are subject to the general litigation provisions of the Swedish Code of Judicial Procedure that apply to cases in respect of which the parties may reach a settlement. However, in cases regarding claim for damages relating to competition law violations, the Stockholm District Court has exclusive jurisdiction. As regards other actions relating to competition law violations, the litigation procedure relating to competition violations is conducted in manner which is substantially consistent with the general litigation procedure. In any case, the Stockholm District Court has exclusive jurisdiction with reference to all the decisions taken by the SCA as well as other questions in relation to the Competition Act. Judgements and decisions of the Stockholm District Court in cases and matters under the Competition Act may in turn be appealed to the Swedish Market Court. The second instance exclusive jurisdiction of the Swedish Market Court apply also to judgements and decisions regarding claim for damages when coordinated with a case for imposition of a fine in respect of anti-competitive conduct. Otherwise, general Swedish litigation provisions apply and the decision by the district court shall be appealed to the competent court of appeal. Finally, according to the provisions of the Competition Act, the composition of the court dealing with infringements of the Competition Act (claim for damages excluded) differs from the normal composition under general Swedish provisions of law. In particular, at the final hearing of cases regarding violations under the Competition Act which do not pertain to conditional fines, the district court shall consist of four members: two legally-

18 The obligation imposed may be, e.g., that the undertaking must stop applying a certain agreement, terms of agreement or some other prohibited practice. The order may also relate to, for example, an obligation concerning sales, rectification or prices.

141

qualified judges and two experts in the field of economics. The requirements of having experts in the field of economics differs from the general litigation procedure where this is not a requirement. However, it shall be noted that, in case a final hearing is not held, this requirement is not mandatory although an expert in economics is still allowed to participate.

Relevant Literature • KARLSSON, J., Rättsosäkerhet vid gryningsräder, Europarättslig tidskrift (ERT)

2011/3 • J. LUNDSTRÖM, J., BRÄNDT, E. AND LARUSDOTTIR, T., “Konkurrensverkets

gryningsräder - spegling av digital material m.m”, Juridisk tidskrift nr 2/2011 s. 452.

142

SWITZERLAND



The Federal Act on Cartels and Other Restraints of Competition (“Swiss Cartel Act” or CartA”) does not provide any provision specifically referring to trade secrets. Nevertheless, the general provisions in the CartA relating to illicit agreements/concerted practices (Article 5 of the CartA) and abuses of dominant position (Article 7 of the CartA) may apply to issues relating to trade secrets as long as a restriction of competition is involved. A.2 Definition of trade secrets

The Swiss Cartel Act does not contain any specific definition of trade secrets. However, the Statement of the Swiss Competition Commission (“COMCO”) dated 30 April 2008 ascertains that the definition of trade secrets according to the Swiss criminal law shall also apply for the CartA. Competition authorities define a trade secret as information that is neither evident nor commonly available, provided that the owner of the trade secret has a justified and objective interest in keeping it secret (the so-called “objektives Geheimhaltungsinteresse”) and it does intend to keep such information or data secret (the so-called “subjektiver Geheimhaltungswille”). A.3 Applicability of EU competition law principles

Switzerland is not a member of the European Union and it has not converted the duties concerning the protection of trade secrets into Swiss national law. Nevertheless, the COMCO often considers the European practice as an aid in interpretation. For instance, the COMCO has stated in the Notice on the Competition Law Treatment of Vertical Agreements that the Swiss regulation is based on the European legislation regarding the same issue. A.4 Decisional practice of the Swiss Competition Commission

The COMCO has not yet handled any case where there has been an issue of trade secrets in relation to an investigation under the competition rules. The only available cases – besides one case concerning an exchange of sensitive information considered as an illicit agreement which, however, are not relevant for the purpose of this Study – relate to the protection of trade secrets from disclosure during proceedings. A.5 Civil court judgements

The Swiss courts have, as of yet, not dealt with competition law issues involving trade secrets. A.6 Inadequacies and need for a European harmonised and common


The absence of any decisional practice in this respect does not allow identifying possible inadequacies.

143

B. POWERS OF THE COMCO AND PROTECTION OF TRADE SECRETS IN THE ADMINISTRATIVE PROCEDURE

B.1 Starting of COMCO investigations

Infringements of the Swiss Cartel Act can be initiated ex officio, where the COMCO discovers anti-competitive conduct. B.2 COMCO sanctioning powers

According to the CartA, fines up to 10% of the net sales within the last three years in Switzerland can be imposed by the COMCO for violations of Articles 5 and 7 of the CartA. B.3 Powers to carry out inspections

Preliminary measures are not regulated by the CartA, but by the new Federal Code of Civil Procedure (“CCP”). Under the new CCP, it is possible to have a court taking evidence as a provisional measure (prior to filing a court action) by showing legitimate interest in such pre-trial evidence collection (such as the need to assess the merits of a case). The provisions of the CCP do not exclusively specify and regulate the preliminary remedies, but allow the judge to decide on the appropriate measures based on the presented facts of the case. Thus, the judge is only limited by the principle of proportionality. A court must decide on the preliminary measures – whether they are applied for pre-trial or during the proceedings - since such decision is necessary for their execution. The opposing party is granted the opportunity to be heard by the judge prior to the decision on the preliminary measures. Where an imminent danger makes it impossible to hear the opponent before the application is made, the judge can take steps to introduce super preliminary measures after having received the application, unless the applicant has made an obvious attempt to delay his application. The competition authorities may order searches and seize any evidence. Articles 45-50 of the Federal Act on Administrative Criminal Law, that apply by analogy to these coercive measures, contain general provisions regarding seizure of evidence material and are comparable with the provisions of the Federal Code of Criminal Procedure Rules. Searches and seizures shall be ordered by a member of the presiding body in response to a motion from the Secretariat of the COMCO. B.4 Rules protecting trade secrets from disclosure in the course of COMCO

proceedings

The CartA sets forth some provisions to ensure the protection of the trade secrets during the proceedings. In particular, pursuant to Article 25 of CartA, competition authorities shall be bound by official secrecy and shall not use information obtained in the performance of their duties outside the context of their activity or outside the purpose of the investigation (neither for counselling nor for other investigation). They are only authorised to give information to the Swiss price surveillance authority for the fulfilment of its tasks. This protection is granted to all the parties to the proceedings, regardless of their role, that are responsible to indicate information which they consider to be trade secrets. Generally, the public is never part of the proceedings and there are no public hearings. Moreover, in the final judgement, trade secrets are blackened since, according to

144

applicable rules, the publications of the competition authorities shall not reveal any business secrets. According to Article 40 of the CartA, all information necessary for the proceedings have to be disclosed to the competition authorities. This obligation potentially includes disclosure of trade secrets, which can be nonetheless withheld if the general provisions regarding the right to withhold information, for instance privilege to refuse to give information or immunity of witness, are applicable. This provision has to be construed in connection with the right of the opposing party to inspect the files and the need of the authorities to substantiate its decisions and with the right of the parties to participate in the proceedings. Therefore, in order to balance these rights, the competition authorities have to take necessary measures according to the already mentioned Article 25 of the CartA in order to protect the trade secrets. This can include refusal of the right to inspect the files or blackening of the relevant passages. B.5 Possibility for the claimant to participate in the proceedings

The CartA provides that a person impeded by an unlawful restraint of competition from entering or competing in a market may request a removal or cessation of the obstacle and/or damages and reparations in accordance with the Swiss Code of Obligations and/or remittance of illicitly earned profits in accordance with the provisions on conducting business without a mandate. Such actions may also be taken by a person who, on account of a lawful restraint of competition, is impeded more seriously in his or her ability to compete than is warranted by the implementation of such restraints. Therefore, the claimant may actively participate in the civil proceedings of the CartA. Within the criminal proceedings of the CartA, the party reporting an offence plays only a minor role since the criminal proceedings are governed by the principle of judicial investigation, which means that it is the responsibility of the competent authority to collect the evidence material. B.6 Interim measures

According to Article 27 of the CartA, the competition authorities can dispose interim injunctions necessary for the investigation. As under the provisions of the CCP, the competition authorities are bound by the principle of proportionality, which means that they cannot go beyond what is necessary to prevent serious and irreparable damage to competition. B.7 Dealing with issues requiring specific technical knowledge

Judges at the Cantonal level do not have technical or scientific expertise since, with the exception of the four Cantonal commercial courts, they do not have a sufficient caseload to develop substantial technical expertise. In addition, there are no particular procedures for trade secret litigation which could have compensated for these deficits. B.8 Average duration of the proceedings

It is impossible to state how long an average civil proceeding lasts. Summary proceedings could last up to one year and the first instance proceedings up to three years, depending on the complexity of the case and the matter of dispute. B.9 Rights of appeal against COMCO decisions

145

Matters relating to the CartA are firstly decided by the COMCO. COMCO’s decision can be appealed to the Swiss Federal Administrative Tribunal and the decision of the latter to the Federal Supreme Court. C. CIVIL LITIGATION


The procedural rules applicable to CartA infringements do not differ from the civil proceedings, even though Articles 12 to 15 of the CartA set out specific rules for the cartel civil procedures. In general, the dispute in front of the court is not to be heard separately, but in connection to the question of the breach of contract between the involved parties as well as if the contract in question is at all valid. In any event, the judge has to submit the case to the COMCO for its expert non-binding opinion.

Relevant Literature • AMSTUTZ M., REINERT, M., Basler Kommentar Kartellgesetz, Helbing &

Lichtenhahn, Basel 2010 • BAKER & MCKENZIE (HERAUSGEBER), Kartellrecht, Stämpfli Verlag, Bern 2007 • BAKER & MCKENZIE (HERAUSGEBER), Schweizerische Zivilprozessordnung,

Stämpfli Verlag, Bern 2010 • Merkblatt der Wettbewerbskommission vom 30.04.2008 betreffend

Geschäftsgeheimnisse. (Statement of the Swiss Competition Commission regarding trade secrets from 30 April 2009)

• von BÜREN, R., WALTER, H.P., Die wirtschaftsrechtliche Rechtsprechung des

Bundesgerichts im Jahr 2007, ZBJV 144/2008, 675 • MEITIGER, I., Der Schutz von Geschäftsgeheimnissen im globalen und regionalen

Wirtschaftsrecht, Studien zum globalen Wirtschaftsrecht, Peter lang, Bern 2001 • MEITINGER, I., Die globale Rahmenordnung für den Schutz von

Geschäftsgeheimnissen im TRIPS-Abkommen der WTO und ihre Auswirkungen auf die Rechtslage in der Schweiz, sic! 2002, 145, 154

• STROBEL, E., Protection of trade secrets through IPR and unfair competition law,

sic! 2010, 669 • TAKEI, N., Inhalt und Rechtsverfolgung von Geheimhaltevereinbarungen, SJZ

103/2007 s. 57 • ZÄCH, R., Schweizerisches Kartellrecht, Stämpfli Verlag, Bern 1994.

146

UNITED KINGDOM



UK competition law does not contain any specific provisions on the protection of trade secrets. The general provisions contained in the UK Competition Act 1998 (the “Competition Act”), relating to anti-competitive agreements/conduct (Chapter I of the Competition Act) and abuse of a dominant position (Chapter II of the Competition Act) may apply to situations relating to the licensing, disclosure (or refusal to disclose) of trade secrets. In this context, UK competition law might incidentally protect disclosure of trade secrets to the extent that it prohibits the exchange of competitively sensitive information between competitors (Chapter I). On the other hand, under rather extreme factual scenarios, dominant undertakings may be required to disclose trade secrets (e.g., databases, interoperability information) to their downstream competitors if the disclosure of such trade secrets has a foreclosure effect and, thus, their disclosure is necessary for other undertakings to compete with the dominant undertaking (Chapter II). In common with other National Competition Authorities and national courts within the European Union, the UK Competition Authority (the Office of Fair Trading or “OFT”), as well as UK domestic courts, have the power to enforce Article 101 and Article 102 of the Treaty on the Functioning of the European Union (“TFEU”). A.2 Definition of trade secrets

UK competition law does not contain any specific provisions on the protection of trade secrets and decisional practice on the issue is very limited. For the notion of trade secrets accepted under UK law in general, please refer to the Commercial and IP Chapter. A.3 Applicability of EU competition law principles

The OFT and UK courts take into account the decisional practice of the European Commission (“Commission”) and the EU courts, and UK competition law is interpreted in accordance with the principles of the European Community competition law. A.4 Decisional practice of the Office of Fair Trading

The OFT has expressly stated that Chapter II of the Competition Act could apply to abusive behaviour in relation to intellectual property rights (which may encompass trade secrets); however, there is very limited decisional practice in this respect. For the purpose of this Study, it is worth mentioning that in the case of Capita Business Services Ltd and Bromcom Computers plc, Capita gave the OFT voluntary assurances that it would provide “interface information” to a third party to enable it to have access to data on Capita’s server; the case was therefore closed by the OFT. A.5 Civil court judgements

The UK civil courts have never dealt with competition law issues involving trade secrets.

147


Competition law is not considered in the United Kingdom as the most appropriate legal instrument to protect trade secrets. Accordingly, the identification of specific inadequacies appears problematic. In any event, a European harmonized and common legislation on trade secrets would avoid different national approaches within the EU towards the standard of intervention of competition law in respect to trade secrets depending on whether they are or are not considered as IP rights. B. POWERS OF THE OFT AND PROTECTION OF TRADE SECRETS IN THE


B.1 Starting of OFT investigations

Pursuant to § 25 of the Competition Act, the OFT has the power to instigate infringement proceedings ex officio. Complaints might in any event be submitted, but the complainants are not required to initiate proceedings nor do they bind the OFT to initiate proceedings. B.2 OFT sanctioning powers

Undertakings found to be in breach of competition law in the United Kingdom can be fined up to 10% of their worldwide turnover by the OFT. In addition, third parties (including injured competitors, customers and consumer groups) can bring damages claims against them. Individuals found to be dishonestly involved in cartels can be fined and imprisoned for up to five years and directors of companies that breach the prohibitions can be disqualified for up to 15 years. B.3 Powers to carry out inspections

If the OFT has reasonable grounds for suspecting that an undertaking has infringed competition laws (whether UK or EU law), it may conduct an investigation and has the power to enter premises to carry out inspections, either with or without a warrant (i.e., a warrant granted by the courts). These powers enable the OFT to enter premises and to gain access to documents relevant to an investigation. The OFT has the power to require any person on the premises to produce any document that the authorised officer considers relevant to the investigation.

B.4 Rules protecting trade secrets from disclosure in the course of OFT proceedings

Under Section 1 of the OFT’s Rules, “confidential information” is defined as: (a) commercial information whose disclosure the OFT or a regulator thinks might

significantly harm the legitimate business interests of the undertaking to which it relates;

(b) information relating to the private affairs of an individual whose disclosure the

OFT or a regulator thinks might significantly harm the individual’s interests; or (c) information whose disclosure the OFT or a regulator thinks is contrary to the

public interest.

148

Section 6 of the OFT’s rules sets out the procedures governing the use of confidential information in proceedings: 6.—(1) Where a person who has supplied information to the OFT has made representations to the OFT identifying such information as being information that the OFT should treat as confidential information and the OFT proposes to disclose such information under these Rules, the OFT shall take all reasonable steps to: (a) inform that person of the OFT’s proposed action; and (b) give that person a reasonable opportunity to make representations to the OFT on

the OFT’s proposed action. (2) The OFT may at any time request a person who has supplied information to the OFT to make written representations to the OFT in respect of the information supplied: (a) identifying the information which that person considers the OFT should treat as

confidential information; (b) explaining why that person considers the OFT should treat the information as

confidential information; or (c) on the matters referred to in both sub-paragraphs (a) and (b). (3) If a person who has supplied information to the OFT makes written representations to the OFT in respect of the information supplied identifying the information which that person considers the OFT should treat as confidential information or explaining why he considers the OFT should treat the information as confidential information, whether or not such representations are made under this rule, the OFT may seek from that person such further clarification as the OFT considers needed. (4) If the OFT requests any person to make representations or to give further clarification under this rule, the OFT may specify the period within which such representations or further clarification should be made. (5) For the purposes of this rule, where, in the OFT’s opinion, information supplied to the OFT by any person relates to or originates from another person, that other person may be treated as a person who has supplied the information to the OFT. B.5 Possibility for the claimant to participate in the proceedings

Once the complaint has been made to the OFT, the OFT will decide upon the merits of the complaint and choose whether to commence proceedings against the infringing party. The OFT will bring such proceedings by itself and as such, the claimant does not play a direct role in proceedings. B.6 Interim measures

Section 35 of the Competition Act provides that the OFT may implement interim measures in certain circumstances. In particular, Section 35 states the following: S35. Interim measures.

149

(1) This section applies if the Director: (a) has a reasonable suspicion that the Chapter I prohibition has been infringed; or

(b) has a reasonable suspicion that the Chapter II prohibition has been infringed, but has not completed his investigation into the matter.

(2) If the Director considers that it is necessary for him to act under this section as a

matter of urgency for the purpose: (a) of preventing serious, irreparable damage to a particular person or category of

person; or (b) of protecting the public interest, he may give such directions as he considers

appropriate for that purpose. (3) Before giving a direction under this section, the Director must: (a) give written notice to the person (or persons) to whom he proposes to give the

direction; and (b) give that person (or each of them) an opportunity to make representations. (4) A notice under subsection (3) must indicate the nature of the direction which the

Director is proposing to give and his reasons for wishing to give it. B.7 Dealing with issues requiring specific technical knowledge

Not available B.8 Average duration of the proceedings

The duration of OFT proceedings can vary depending on the nature and complexity of the case, but they can take several years from the commencement of preliminary investigations to a final decision. OFT findings are subject to appeal which may add to the length of proceedings. B.9 Rights of appeal against OFT decisions

Decisions of the OFT can be appealed to the Competition Appeals Tribunal (the "CAT") which is a specialist competition law tribunal. Decisions of the CAT can be appealed on a point of law (and with permission) to the Court of Appeal (and ultimately to the Supreme Court). C. CIVIL LITIGATION


The key difference between general civil litigation and litigation relating to competition law issues relates to the forum of the litigation. Civil litigation relating to competition law violations can be initiated in either the High Court of England & Wales (as with general litigation) or alternatively, civil litigation relating to "follow on" actions for damages (i.e., private actions by victims of a competition law violation such as customers or other competitors) can be initiated – pursuant to Sections 47A and 47B of the Competition Act – in the CAT. The substantive difference in the two forums is procedural; High Court proceedings are governed by the Civil Procedure Rules whereas proceedings in the CAT are governed by the Competition Appeal Tribunal Rules 2003 which are, in some respects, more general and flexible than the Civil Procedure Rules. Pursuant to Section

150

49 of the Competition Act, decisions of the CAT are appealable on a point of law (and with permission) to the Court of Appeal (and ultimately to the Supreme Court), as are judgements of the High Court.

Relevant Literature • FIRST, H., “Trade secrets and antitrust law”, in Rochelle C. Dreyfuss, Katherine J.

Strandburg (eds.), "The law and theory of trade secrecy. A handbook of contemporary research", Edward Elgar Publishing, Cheltenham UK, Northampton MA USA, 2011.

• CZAPRACKA, K. A., "Antitrust and trade secrets: the US and the EU approach",

24 Santa Clara Computer & High Tech. L.J. 207, 2008. • WHISH, R., “Competition Law”, Oxford, 7th Ed, 2012.

151

UNITED STATES OF AMERICA



U.S. federal antitrust legislation, the Sherman Act, the Clayton Act, and the Robinson-Pattman Act (“Federal Antitrust Statutes”) do not include any provision specifically related to trade secrets. The Federal Antitrust Statutes govern commerce within the states or with a foreign country. Many states enacted antitrust laws that apply to activities affecting commerce within such states, such as the Cartwright Act in California. However, none of them include a provision specifically related to trade secrets. It should be furthermore mentioned that, as further detailed in Section A.4 below, in the context of licences, the U.S. Department of Justice appears to treat trade secrets on a par with other intellectual property (see Antitrust Guidelines for the Licensing of Intellectual Property, U.S. Department of Justice (1995) (the “Antitrust Guidelines”). However, the Justice Department recognised that trade secrets (like other intellectual property) do not necessarily confer market power on their owner19, and that intellectual property licensing has pro-competitive benefits20. Licences raise antitrust concerns “if they are likely to affect adversely the prices, quantities, qualities, or varieties of goods and services either currently or potentially available.”21 There is no clear case law holding the enforcement, use, or exploitation (notably, licensing) of trade secrets to be suspect. Activity may be a “per se” (i.e., automatic) violation of antitrust law or assessed under the “rule of reason”, pursuant to which unreasonable restraints on competition are illegal, which takes into account different factors. State Oil Co. v. Khan, 522 U.S. 3, 10 (1997). Intellectual property-related restraints are largely not deemed a per se violation. A.2 Definition of trade secrets

The Antitrust Guidelines do not provide for a definition or explanation of a trade secret. Furthermore, there is no uniform definition of a trade secret throughout the United States, although the definitions used in various states share characteristics, such as a requirement of secrecy. In this respect, it is not clear whether a court in an antitrust case would apply specific state law or use a general common law definition, such as the one formulated by the First Restatement of Torts, which was authored as a (non-statutory and legally non-binding) codification of common law existing at the time. This definition, which has been adopted by some states through case law, describes a trade secret as follows: “A trade secret may consist of any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it”. RESTATEMENT (FIRST) TORTS § 757, cmt. b. (1939). A.3 Applicability of EU competition law principles

EU competition law has no binding effect in the United States. U.S. federal and state antitrust law are developed separately from EU competition law.

19 Antitrust Guidelines, at ¶ 2.2.

20 Id. at ¶ 2.3

21 Id. at ¶ 3.2

152

A.4 Decisional practice within the U.S.

Trade secrets are only intellectual property by virtue of their being kept secret by their owner as opposed to an exclusive right (copyrights) or an exclusionary right (patents) granted by statute. The enforcement or licensing of patents or copyrights have raised antitrust concerns. For example, in the pharmaceutical industry, some courts have held agreements between a pharma patentee and generic manufacturer under which the patentee pays the generic manufacturer for staying out of the market to be a violation of antitrust law. (Ark. Carpenters Health & Welfare Fund v. Bayer AG, 604 F.3d 98, 104-10 [2d Cir. 2010]). Another prohibited practice is the obligation of a patent licensee to pay royalties under a patent licence past the patent’s expiration date. Trade secrets have not engendered such scrutiny. For example, in Aronson v. Quick Point Pencil Co., 440 U.S. 257, 265-66 (1979), and in Warner-Lambert Pharmaceutical Co. V. John J. Reynolds, Inc., 178 F. Supp. 655, 665-67 (S.D.N.Y. 1959), it has been stressed that it is not an antitrust violation for a trade secret licence to require the licensee to pay royalties past the end of the trade secret’s secrecy. Furthermore, the imposition of confidentiality obligations and territorial restrictions in a trade secret licence is permissible under antitrust law (see Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373, 402 (1911)). Also, refusing to license patents and copyrights do not constitute an antitrust violation (see In Re Independent Service Organizations Antitrust Litigation, 203 F.3d 1322, 1328, 1329 (Fed. Cir. 2000) and likewise, antitrust law does not generally mandate a company to disclose its technology to rivals to enable such rivals to make their products compatible with the company’s technology: several cases dealt with such issue. In United States v. National Lead Co., 332 U.S. 319, 359 (1947), it has been held that a decree, which requires competitors engaging in illegal patent pooling to grant licences at reasonable fees, may not obligate the competitors to disclose its technical knowledge. In Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 281-82 (2d Cir. 1979), it was stressed that “a firm may normally keep its innovations secret from its rivals as long as it wishes, forcing them to catch up on the strength of their own efforts after the new product is introduced,” citing to Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 481 (1974)). Furthermore, in California Computer Products, Inc. v. International Business Machines Corporation, 613 F.2d 727, 744 (9th Cir. 1979) it was concluded that “IBM, assuming it was a monopolist, had the right to redesign its products to make them more attractive to buyers whether by reason of lower manufacturing cost and price or improved performance[,] was under no duty to help CalComp or other peripheral equipment manufacturers survive or expand [, and] need not have provided its rivals with disk products to examine and copy ... nor have constricted its product development so as to facilitate sales of rival products”.

In Intergraph Corporation v. Intel Corporation, the question was whether unilaterally ceasing the supply of confidential information and new releases by Intel to Intergraph in response to Intergraph’s suit of Intel for patent infringement and other causes of action constituted monopolistic behaviour in violation of antitrust law. The Court of Appeals for the Federal Circuit reversed the lower court’s preliminary injunction against Intel, holding that Intel could not be required to disclose pre-release technical information to Intergraph under the “essential facility theory”, reasoning that “[t]he notion that withholding of technical information and samples of pre-release chips violates the Sherman Act, based on essential facility jurisprudence, is an unwarranted extension of precedent and can not be supported on the premises presented”. According to Intergraph Corp. v. Intel Corp., 195 F.3d 1346, 1357-58 (Fed. Cir. 1999), the “essential facility theory” requires: “(1) control of the essential facility by a monopolist; (2) a competitor's inability practically or reasonably to duplicate the essential facility; (3) the

153

denial of the use of the facility to a competitor; and (4) the feasibility of providing the facility” (Id. At 1357). The court cautioned that “a ‘refusal to deal’ may raise antitrust concerns when the refusal is directed against competition and the purpose is to create, maintain, or enlarge a monopoly” Id. at 1358. However, another appeals court held that “[e]ven a monopolist ... ‘may normally keep its innovations secret from its rivals as long as it wishes”. (Data General Corp. v. Grumman Systems Support Corp., 36 F.3d 1147, 1189 (1st Cir. 1994) (quoting Berkey Photo, 603 F.2d at 281). Accordingly, trade secrets themselves, or the efforts to protect them, do not generally constitute a violation of U.S. antitrust law (see Empire Gas Corp., 537 F.2d at 307, stating that “[e]mployee covenants not to compete ... reasonably limited in area and duration [where] the employee was in a position to obtain valuable personal contacts or trade secrets ... have not generally been considered violative of the antitrust laws”). Instead, a possible violation only depends on the specific conduct taken by the owner of the trade secrets to protect or exploit the trade secrets. See id. (stating that covenants not to compete, “even if legal under local law, could be unlawfully used in restraint of trade”, citing Schine Chain Theatres, Inc. v. United States, 334 U.S. 110, 119 (1948)). Thus, antitrust concerns involving trade secrets arose out of practices that were generally suspect under antitrust law, notably practices in agreements licensing rights to such trade secrets or related to products made through use of the trade secrets. In Dr. Miles Medical Co., 220 U.S. at 402-04 , it was held that trade secrets did not avoid an antitrust violation through resale price maintenance because “the question concerns not the [secret] process of manufacture, but the manufactured product”) (overruled by Leegin Creative Leather Prods. v. PSKS, Inc., 551 U.S. 877 (2007) regarding that resale price maintenance is not a per se violation of the Sherman Act but subject to a rule-of-reason analysis).

Courts have been sensitive under antitrust law to attempts to cloak anti-competitive conduct in weak or non-existing trade secrets. See GTE Data Services, Inc. v. Electronic Data Systems Corp., 717 F. Supp. 1487, 1491 (M.D. Fla. 1989) (dealing with a covenant not to compete justified by trade secrets in situation where a dominant position in a particular industry and broad and overly-broad restrictive covenants were asserted). Similarly, asserting trade secrets in bad faith knowing that there are no trade secret rights is prohibited under antitrust law. CVD, Inc. v. Raytheon Co., 769 F.2d 842, 858 (1st Cir. 1985). A.5 Civil court judgements

Please refer to Section A.4. above. A.6 Inadequacies and need for a European harmonised and common


As mentioned above, trade secrets are protected by virtue of their being kept secret. Thus, if a trade secret is publicly disclosed, it irrevocably loses its protection as a trade secret, and such characteristic differentiates them from statutorily protected patents and copyrights. This difference in the nature of this intellectual property right from the nature of patents and copyrights make it conceptually difficult to apply antitrust law in general to trade secrets, lest the right of the owner of a trade secret to exploit it be significantly reduced or restricted. Thus, it is difficult to rationalise application of a per se rule of antitrust violation to the use or licensing of trade secrets. Instead, the approach applying the “rule of reason” standard in the trade secret context depends on

154

the circumstances and would likely involve conduct that is generally suspect under antitrust law rather than particular to trade secrets, such as abuse of a dominant position. In other words, while the trade secrets may be the tools or stated justification for the conduct, it is the conduct itself that infringes antitrust law. B. POWERS OF THE ANTITRUST AGENCIES AND PROTECTION OF TRADE


B.1 Starting of investigations

In the U.S. federal system, both the Antitrust Division of the U.S. Department of Justice (the “DOJ”) and the Federal Trade Commission (“FTC”) have authority to pursue antitrust violations on their own accord. For investigations and regulation, each agency is focused primarily on different areas of the economy. It is worth noting that criminal prosecutions are initiated only by the DOJ. In addition, prosecutions may be initiated by state authorities. No formal complaint is necessary for the DOJ or FTC to investigate. Often, however, investigations are triggered by a complaining party. B.2 Sanctioning powers

The DOJ can investigate antitrust violations and bring a criminal or civil enforcement action in a U.S. district court. The FTC, on the other hand, cannot bring criminal actions. If the FTC investigates an antitrust violation within its area of competence, it may enter into a consent agreement with the violator, initiate an administrative complaint, or bring a civil action in a U.S. federal court. The administrative complaint commences a formal proceeding that may end with a consent agreement settling the complaint or a decision by an administrative law judge. In some circumstances, the FTC may seek injunctive relief, civil penalties, and consumer relief in a suit before a U.S. district court. B.3 Powers to carry out inspections

The DOJ, often utilising the Federal Bureau of Investigation (or FBI), may obtain search warrants from a U.S. district court as permitted by law. In special exigent circumstances, searches and seizures are permissible without a search warrant. The FTC has subpoena powers to obtain materials, which may be enforced upon non-compliance through law enforcement. B.4 Rules protecting trade secrets from disclosure in the course of

proceedings

In the United States, the discovery process permits a party demand disclosure of relevant information and potential evidence from the other party. This includes information on trade secrets that is relevant for litigation. Under Federal Rule of Civil Procedure 26(c), a party from whom discovery is sought may move the court to issue a protective order:

A party or any person from whom discovery is sought may move for a protective order in the court where the action is pending – or as an alternative on matters relating to a deposition, in the court for the district where the deposition will be taken. The motion must include a certification that the movant has in good faith conferred or attempted to confer with other affected parties in an effort to resolve the dispute without court action. The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or

155

undue burden or expense, including one or more of the following: … requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way. Federal Rule of Civil Procedure 26(c)(G).

The protective order may require not to reveal a trade secret or reveal it only in a limited manner. A protective order may impose access restrictions for specific information, such as permitting only outside counsel to view the information (often by designating such information as “attorneys’ eyes only” or “outside attorneys’ eyes only”) and prohibit the other party’s business or even in-house counsel from viewing it. The critical point is that the party seeking a protective order shows good cause for issuance of the protective order. A protective order may be modified by the court, including upon intervention of a third party, such as the owner of a trade secret that has licensed the trade secret to the party subject to the disclosure obligation. See Federal Rule of Civil Procedure 24(b). Furthermore, the Uniform Trade Secrets Act (at § 5), specifically requires “a court [to] preserve the secrecy of an alleged trade secret by reasonable means, which may include granting protective orders in connection with discovery proceedings, holding in camera hearings, sealing the records of the action, and ordering any person involved in the litigation not to disclose an alleged trade secret without prior court approval”. B.5 Possibility for the claimant to participate in the proceedings

The owner of the trade secrets can participate in the proceedings. In most cases, the owner may be the plaintiff. If not, the owner can intervene in the litigation, such as to protect its trade secrets (Federal Rule of Civil Procedure 24). B.6 Interim measures

Preliminary injunctions as well as temporary restraining orders (“TROs”) are principally available for a plaintiff wishing to protect its trade secrets. Under U.S. federal procedure, the plaintiff must show (i) a reasonable likelihood of success on the merits (i.e., that the plaintiff will prevail), (ii) irreparable harm to the plaintiff, (iii) balancing the plaintiff’s and the defendant’s hardships arising from granting or not granting the injunction is in the plaintiff’s favour, and (iv) the issuance of the injunction is in the public interest. See Chrysler Motors Corp. v. Auto Body Panels, Inc., 908 F.2d 951, 952 (Fed. Cir. 1990). A TRO may be issued ex parte only if the plaintiff alleges under oath specific facts that clearly show that immediate and irreparable injury, loss, or damage will result to it before the defendant can be heard, and the plaintiff certifies in writing the efforts made to give notice and the reasons why it should not be required (Federal Rule of Civil Procedure 65(b)(1)). Since TROs are granted ex parte before notice and an opportunity to be heard, courts generally are reluctant to grant them. In addition, the plaintiff may request a preliminary injunction. Issuance of a preliminary injunction generally occurs after a hearing. The requirements are the same four requirements discussed above. However, preliminary relief is generally limited to measures necessary to prevent irreparable harm. B.7 Dealing with issues requiring specific technical knowledge

There is no specific court handling technical trade secret cases. Furthermore, in a jury trial, juries are selected under general rules. It is up to the parties to present the necessary evidence to explain the technical facts that are necessary for the court or the

156

jury to render a decision, including through expert evidence if necessary and appropriate. B.8 Average duration of the proceedings

Not available B.9 Rights of appeal

Decisions by the administrative law judge in an FTC administrative proceeding can be appealed in the FTC and thereafter to a U.S. federal Court of Appeals. Proceedings by the DOJ in a U.S. district court can be appealed as any other decision to a U.S. Court of Appeals. In each case, the decision may be appealed to the U.S. Supreme Court if it accepts such appeal. C. CIVIL LITIGATION


There are no fundamental legal differences between general litigation and litigation initiated by the FTC or DOJ in a U.S. district court. There is a difference between criminal proceeding and a civil proceeding. However, those differences generally exist between criminal and civil proceedings.

Relevant Literature • Antitrust Guidelines for the Licensing of Intellectual Property, U.S. Department of

Justice (1995): these are guidelines by the U.S. Department of Justice regarding the application and enforcement of U.S. antitrust law to intellectual property licensing, including licences of trade secrets.

• Roger M. Milgrim MILGRIM ON TRADE SECRETS (2011), § 10: This chapter discusses

antitrust law application to intellectual property rights, including trade secrets, in the United States.

• Katarzyna A. Czapracka ANTITRUST AND TRADE SECRETS: THE U.S. AND THE EU

APPROACH, 24 Santa Clara Computer & High Tech. L.J. 207 (2008): a law review article discussing trade secrets in the antitrust context under U.S. and European Union law.

appendix 2 - competition law - country...

Documents