Insights | August 23, 2018

A New Trade Secrets Act Now in Force in Finland

The Finnish President has recently ratified the new Trade Secrets Act in Finland, which entered into force on 15 August 2018. By the new act, the EU Trade Secrets Directive has now been implemented in Finnish law. An effective legal framework for the protection of trade secrets is likely to increase the incentives for companies to consider using trade secret protection instead of or in parallel with other forms of IP to protect valuable data.

The definition of a trade secret has been harmonized and according to the new definition, the first requirement is that information must not be generally known or readily accessible to persons that normally deal with the kind of information in question. Secondly, the definition of a trade secret requires that the information has economic value in business activity. The third element of the definition requires that the trade secret holder has taken reasonable steps in order to keep the information secret. Previously, the terms used in the legislation varied and the provisions relating to the protection and enforcement of trade secrets were scattered in different acts.

Under the new Trade Secrets Act, the unlawful acquisition, use and disclosure of trade secrets are prohibited. There are some limitations included in the act as well. Certain activities, such as independent discovery are not considered unlawful. In addition, reverse engineering of a lawfully acquired product is as a point of departure permitted. The new Trade Secrets Act also includes provisions on whistleblowing, enabling a person in certain circumstances to report misconduct and illegalities without the threat of being held liable for trade secret misappropriation.

In addition, the new Trade Secrets Act provides a harmonized approach for civil remedies available in cases of trade secret misappropriation. These civil remedies include, e.g., injunctions and the possibility to claim that the goods which infringe the trade secret are withdrawn from the market. There is also a right to compensation and/or damages caused by the illegal behavior.

When it comes to enforcement, the Finnish legislator landed on a quite exceptional arrangement of parallel jurisdiction in litigation based on the new act. The District Courts have general jurisdiction in all civil actions concerning misappropriation of trade secrets but if the matter involves a legal person or a natural person engaged in business activities, claims concerning trade secrets may also be brought before the Market Court. It remains to be seen if the new framework for enforcement will lead to an increasing amount of civil disputes brought before the courts.