Commission trade secrets consultation, answering guide

up0029With the help of German Pirates (see here) we were able to produce answering guides for the industrial property consultation organised by the European Commission relating to trade secrets. There are no particular admission criteria and the deadline is March 8th 2013. (such as sending in an e-mail before getting the consultation answering links), and you can easily access the study by going to this link: http://ec.europa.eu/internal_market/consultations/2012/trade-secrets_en.htm.

We recommend answering as a "citizen", which you can do (in English) here: http://ec.europa.eu/yourvoice/ipm/forms/dispatch?form=tradesecrets&lang=en

The questionnaire is built into blocks, and we've structured our replies accordingly with comments on each block. You can find a more general comment on consultations by the Commission at the bottom of this blogpost.

Answering guide

Section I.1

In your view, of what importance are 'trade secrets/confidential business information' for (check all relevant boxes):

  1. Research and development: LOW
  2. Exploitation of innovation, i.e. turning an invention into a marketable product: MEDIUM
  3. Innovative and competitive performance of SMEs: MEDIUM
  4. Innovative and competitive performance of large companies which operate internationally: MEDIUM
  5. Growth and jobs in the EU economy in general: LOW

Comment: Research and development benefits most from an open flow of information, as is seen through the open access to research publications and data debates. It can be important to have trade secrets when exploiting or branding a product, but the competitive performance of the industry at large benefits more from a less strict trade secret protection than a strong legal protective framework for trade secrets. A higher degree of flow of information between different institutions in society is likely to benefit the formation of new start-ups, and therefore provide additional flexibility on the market.

Section I.2

How do you think 'trade secrets/confidential business information' influence the following (check all relevant boxes)

  1. Research in research institutions: STRONGLY NEGATIVE
  2. Research and development in companies: WEAKLY NEGATIVE
  3. Exploitation of innovation, i.e. turning an invention into a marketable product: WEAKLY POSITIVE
  4. SMEs innovative and competitive performance: WEAKLY NEGATIVE
  5. The innovative and competitive performance of large companies which operate internationally: WEAKLY NEGATIVE
  6. Growth and jobs in the EU in general: STRONGLY NEGATIVE
  7. Competitiveness of the EU in the world: WEAKLY NEGATIVE
  8. Consumer choice: NEUTRAL
  9. Lower prices of goods and services: STRONGLY NEGATIVE

Comment: It can undoubtedly be so that exploitation of an innovation benefits somewhat from the possibility of maintaining business confidentiality or trade secrets, but there is no reason to believe that this introduces more competition or more easy innovation. Rather it should be seen as a possibility for commercial agents to keep others from competing or building on their knowledge, and in particular one should be very cautious about underestimating the anti-competitive effects of trade secrets and the abilities of big businesses to use trade secret protections and statutory protection of confidential business information as a method of squashing competition and introducing uncertainty for their employees at times when employees move on to new positions with other employers. Excessive trade secret protection primarily introduces a strong element of uncertainty for employees, who may be forced to make very difficult assessments of when they have learned something at work, and when they are dealing with information which their employer is willing to protect in civil or criminal law suits.

Section I.3

Do you consider 'trade secrets/confidential business information' an important tool for business and research bodies in the EU in order to protect their valuable information (check only one box)

Recommended check: NO.

Comment: Trade secrets can and are generally considered important by industry actors when they marketize their products, but this is not of concern to the EU exective institution (Commission) or its legislative institutions (Parliament and Council). An over-zealous amount of attention directed at this issue may indeed cause more blocks to innovation and research, as well as a competitive framework for companies, than simply not addressing the issue.

Section I.4

Do you consider the legal protection against the misappropriation of 'trade secret/confidential business information' (check all relevant boxes):

At national level: EXCESSIVE
In a cross-border context in the EU: EXCESSIVE
In a cross-border context globally: EXCESSIVE

Comment: Excessive trade secret protection primarily introduces a strong element of uncertainty for employees, who may be forced to make very difficult assessments of when they have learned something at work, and when they are dealing with information which their employer is willing to protect in civil or criminal law suits. To safe-guard against such a high burden on employees, and to strengthen a competitive framework where previous work experiences can easily be taken into new companies and start-ups, it is probably safest to tone down the trade secret enforcement in the vast majority of European jurisdictions.

Section I.7

What is the impact of having different/divergent national rules on the protection of trade secrets against misappropriation when doing business across borders in the EU (check all relevant boxes)?

Suggested tick: no negative impact

If one additionally ticks "other", one gets the chance to submit a free form answer of max 300 characters. We recommend responding citizens to write such an answer based on the comments provided for the previous sections.

Section I.8

There is no EU legislation specifically addressing the misappropriation of trade secrets and national rules on this issue differ. Do you think that the legal protection against the misappropriation of 'trade secrets/confidential business information ' should specifically be addressed at EU level (check only one box)?

Suggested response: NO.

Section I.9

If you think that there should be EU legislation or a Commission recommendation addressing the misappropriation of trade secrets what should be its content (check all relevant boxes)?

Please tick NO on all questions.

Section I.10

In your view, what would be the likely effects/impacts of EU level legislation (check all relevant boxes)?

Suggested ticks: Negative effects/impacts (please specify) Suggested further ticks in I.10.2: All of them.

If one ticks "Other (please specify)" in I.10.2 one gets a free form answer of maximum 300 characters.

For this comment one could address the concern of society imposing a legal right in protection of an entity from which no reciprocity is expected. In the patent system, we expect the entity which is granted a legal right to reciprocate through publishing a result - in trade secret protection, there is however no reciprocity. The official institution would merely be extending their resources and time into helping protecting a private actor for no obvious gain of the public or itself.

Section I.11

Do you think that legislation against the misappropriation of trade secrets/confidential business information at EU level would improve the functioning of the internal market for intellectual property (check only one box)?

Suggested check: No, because (please specify)

Suggested further checks:

  • research cooperation and transfer of know-how across borders in the EU will not increase much as other factors hamper such activities much more and would not be solved.
  • it would only incentivise companies to control and protect their intellectual property even more.
  • Other (please specify): it should somehow be made clear that it is not entirely obvious what an internal market for intellectual property is. Does the Commission refer to the total amount of licenses being made at an EU level or the total amount of legal rights being registered? What what what?

Section II.1-II.4

  • II.1: Do you hold trade secrets/confidential business information in your company/entity (check only one box)?
  • II.2: Do you make an effort to protect trade secrets/confidential business information in your company/entity (check only one box)?
  • II.3: Did you ever enter into technology/know-how transfer agreements?
  • II.4: Have/has important trade secrets/confidential business information been stolen from your company/entity (check only one box)?

Most likely the answer for most correspondents that are citizens will be NO, but if you own an SME you should review the topic as suits your situation. Also, a non-disclosure agreement could count as a know-how transfer agreement.

Section II.7

Do you use any other form of IPR (check all relevant boxes)?

There is virtually no possibility of any citizen in Europe not being a copyright holder, therefore the box which should be ticked is the COPYRIGHT box.

Section II.8

When you do not use IPRs, what is the reason (check all relevant boxes)?

Free form question. No specific answers recommended.

Section III

This section is about personal information about you as a citizen or whichever capacity you are answering in. Many questions are straight-forward, but some of them deserve attention:

  • III.6: Is your organisation registered in the Interest Representative Register? If not, you have the opportunity to register here before you submit your contribution. If you don't know what this statement means, you can answer NO.
  • III.7: Organisation. If you are not answering as a member of an organisation, you can put "myself" (if answering as a citizen).
  • III.8: Can the Commission contact you if further details on the information you submitted are required? We assume this is up to everyone.
  • III.9: Do you object to publication of the personal data on the grounds that such publication would harm your legitimate interests? This means that the Commission will publicize all responses that come in, so that it becomes transparent to other citizens and organisations who is trying to influence the Commission's decision making procedures. This is a good reference of such a publication: Peter Houppermans on data protection.

General information on consultations

A consultation, or in other words a questionnaire survey is something the Commission uses when they want to find out how different actors in society thinks about a particular social issue. Consultations is created through a questionnaire system that was developed by IBM in the 1990s. This means that the consultations may seem awkward to handle for individuals that are used to systems like surveymonkey or other means of questionnaires that are much more user friendly.

The Commission usually likes to be able to produces statistics based on the responses to the consultation. Therefore it is important to answer yes or no to the questions with a limited number of possible choices. If you do not agree with the question it really should be answered in a way that shows distance from the goal with the question.

Sometimes you will be given the opportunity to provide your own answers, in free text. These question usually have character limit. It is these responses that will be rejected if they are identical.

Unfortunately the Commission only makes their consultations available in English. Therefore it can be difficult for non-English speakers to take part in these questionnaires. The European Parliament, among others, have directed heavy criticism to the Commission for this, as an explicit goal of many questionnaires is to provide the citizens with an easy way to contribute to the development of policies.

The Commission must also take all responses it have received from a consultation into account. Normally the commission also must publish the answers that is received, but private data of the citizens are handled in accordance with the EU regulatory framework for the protection of private data. Both as an individual or an interest group you can ask the Commission to keep your answers fully or partially confidential. However, as citizen you should contact your elected representatives either yourself, or through a interest group to ensure that your submitted position is actually take into account when the Commission presents its report.


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