In 2019, the Law on the Protection of Trade Secrets was adopted and entered into force. With the adoption of the new Act, Bulgaria transposed Directive (EU) 2016/943 of June 8, 2016.
The adoption of the Law on the Protection of Trade Secrets is a step in the development of the intellectual property and will provide businesses in Bulgaria with remedies in the field of trade secrets, where until now entrepreneurs were vulnerable.
The Law on the Protection of Trade Secrets aims to regulate the terms and conditions for the protection of trade secrets from illegal acquisition, use and disclosure. This publication aims to present the main provisions of the Law on the Protection of Trade Secrets.
What is a trade secret?
The definition of a trade secret is contained in Article 3 of the Law on the Protection of Trade Secrets, as it is any commercial information, know-how and technological information that simultaneously meets the following requirements:
– is a secret in such a way that, as a whole or in its exact configuration and set of elements, it is not generally known or easily accessible to persons in the field who normally use this type of information;
– has commercial value due to its secret nature;
– with regard to it, measures have been taken to keep it secret by the person who has control over the information.
A holder of a trade secret may be any natural or legal person who lawfully controls a trade secret, and an infringer is any natural or legal person who has unlawfully acquired, used or disclosed a trade secret.
Acquisition, use and disclosure of trade secrets
When the acquisition of a trade secret is lawful?
The acquisition of a trade secret is lawful when it is made:
– by independent discovery or creation;
– by observing, examining, disassembling or testing a product or object which has been made available to the public or is in the lawful possession of the person who acquired the information, who is not legally obliged to restrict the acquisition of the trade secret;
– by exercising the right to information and consultation by employees or their representatives in accordance with the law of the European Union and the Bulgarian legislation;
– by virtue of a contract or in another way that does not contradict the bona fide commercial practice within the meaning of the Law on Protection of Competition.
When the acquisition of a trade secret is illegal?
The acquisition of a trade secret without the consent of its owner is considered illegal when it is done through:
– unauthorized access, misappropriation or copying of documents, things, materials, substances or electronic documents, which are subject to lawful control by the holder of the trade secret and contain trade secret or information from which the secret can be extracted;
– other conduct that contradicts the bona fide commercial practice within the meaning of the Law on Protection of Competition.
The use or disclosure of a trade secret without the consent of its owner shall be considered unlawful when it is committed by a person who has:
– illegally acquired a trade secret, or
– violated a confidentiality agreement or other obligation not to disclose a trade secret, or
– breached the obligation to restrict the use of trade secrets.
The acquisition, use or disclosure of a trade secret shall not be considered unlawful in the following cases:
– in exercising the right to freedom of expression and the right of access to information within the meaning of the Charter of Fundamental Rights of the European Union, including respect for the freedom and pluralism of the media;
– for the detection of crimes, violations or other illegal acts, when this is done in order to protect the public interest;
– when employees disclose a trade secret to their representatives within the framework of the legal exercise of the functions of the representation in accordance with the law of the European Union or the Bulgarian legislation, if the disclosure was necessary for the exercise of these functions;
– for protection of an interest recognized by the law of the European Union or by the Bulgarian legislation.
Proceedings for the protection of trade secrets
The holder of a trade secret has the right to file a lawsuit against any violator of the trade secret for establishing the illegal acquisition, use or disclosure of a trade secret, as well as for:
– awarding compensation for damages and lost profits;
– suspension or prohibition of the use or disclosure of a trade secret;
– a ban on the production, supply, placing on the market or use of infringing goods, imports or exports, and the storage of those goods for those purposes;
– destruction of whole or part of documents, things, materials, substances or electronic documents, which contain or carry the trade secret, or when appropriate – their transfer to the plaintiff;
– a prohibition on offering or providing services that are significantly favored by trade secrets that have been improperly acquired, used or disclosed.
The right of action of the holder of a trade secret expires upon the expiration of 5 years from the commitment of the violation.
It is important to note that before filing the claim, as well as in any situation of the case until the end of the court search before the appellate instance, at the request of the holder of a trade secret, the court may impose the following interim measures:
– suspension or prohibition of the use or disclosure of a trade secret as a temporary measure;
– prohibition on the production, supply, placing on the market or use of the infringing goods, import or export of these goods, as well as their storage for these purposes;
– detention by seizure and transfer of the goods which are the subject of the alleged infringement, including when they have been imported from third countries, so as to prevent them from being placed or placed on the market; seizure and transfer shall be carried out in respect of the person in whom they are located, with seizure;
– a prohibition on offering or providing services that are significantly favored by trade secrets that have been improperly acquired, used or disclosed.
The court may order the lodging of a security by the defendant instead of the application of those measures. The amount of the security is determined according to the amount of direct and immediate damages that the plaintiff would suffer if the defendant continued to use the trade secret. The disclosure of a trade secret against the lodging of a security is not allowed.
The infringer is obliged to compensate the holder of a trade secret for all damages and lost profits, which are a direct and immediate consequence of the illegal acquisition, use or disclosure of a trade secret. Compensation is due when the infringer knew or should have known in these circumstances that he was involved in the unlawful acquisition, use or disclosure of a trade secret.
With the decision in the case the court establishes the illegal acquisition, use or disclosure of a trade secret and according to the request of the plaintiff and the specific circumstances may impose the following measures on the infringer:
– suspension or prohibition of the use or disclosure of a trade secret;
– prohibition on the production, supply, placing on the market or use of the infringing goods, import or export, as well as the storage of the goods for these purposes;
– destruction of whole or part of documents, things, materials, substances or electronic documents, which contain or carry the trade secret, or when appropriate – their transfer to the plaintiff;
– a prohibition on offering or providing services that are significantly favored by trade secrets that have been improperly acquired, used or disclosed.
The court may impose those measures for a period sufficient to eliminate any commercial or economic advantage which the infringer has received from the unlawful acquisition, use or disclosure of the trade secret.
At the request of the plaintiff, the court may also impose one or more of the following measures in respect of the goods or services which are the subject of the infringement:
– withdrawal of the goods from the market or at the request of the holder of a trade secret – transfer of the goods to non-profit legal entities for activities in public benefit;
– elimination of those characteristics of the goods or services in respect of which the infringement has been established;
– destruction of the goods or, where appropriate, their withdrawal from the market, provided that the withdrawal does not affect the protection of trade secrets.
The implementation of the measures imposed by a court decision is carried out in accordance with the Code of Civil Procedure.
In case you need a consultation on how you can protect your trade secret, we recommend that you seek the assistance of a specialist with experience in this matter. The intellectual property specialist Krasimira Kadieva will gladly assist you with the negotiation and drafting of the trade secret confidentiality agreement due to the fact that she has a success in her practice negotiated and drafted such kind of agreements.
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Legal Disclaimer: This material prepared by Krasimira Kadieva aims to provide information about the Law on the Protection of Trade Secrets. It does not constitute a legal opinion and cannot be interpreted as individual consultation on any concrete facts or circumstances. The advice of an intellectual property specialist should be obtained for specific questions and situations. For more information on the above-mentioned issues and individual consultations, please contact Krasimira Kadieva at 00359 882 308 670 or make an inquiry using the contact form of this website. Krasimira Kadieva is a Bulgarian and European trademark and design attorney. She can assist in negotiating and drafting of trade secret confidentiality agreements.