EU innovation galvanized thanks to adoption of ‘trade secrets’ directive

On 27 May, the EU Council of Ministers joined the European Parliament in approving a new law for the protection of trade secrets and confidential information of EU-based companies. The new directive recognizes that “businesses and non-commercial research institutions invest in acquiring, developing and applying know-how and information which is the currency of the knowledge economy and provides a competitive advantage. By protecting such a wide range of know-how and business information, whether as a complement or as an alternative to intellectual property rights, trade secrets allow creators and innovators to derive profit from their creation or innovation and, therefore, are particularly important for business competitiveness as well as for research and development, and innovation-related performance.”

EBIC applauds EU decision-makers for adopting the new ‘trade secrets’ directive and the positive signal that it sends to European companies. As noted in the directive, trade secrets and confidential business information are particularly important to small and medium-sized enterprises (SMEs), which make up a significant portion of EBIC’s membership.

EBIC President Giuseppe Natale (CEO, Valagro SpA), says, “Trade secrets and confidential business information are particularly important with regard to products that cannot be patented. They help to foster fair competition by making sure that a company cannot use the business information developed by a competitor unless acquired through an appropriate transaction such as licensing. This rewards and encourages companies that invest time and energy into research and testing.”

The trade secrets directive will go a long way towards galvanizing research and innovation in Europe.

With the adoption of this directive, it is important that we now apply the spirit of the directive through more joined up thinking across policies. The Fertilising Products proposal is a case in point: To encourage innovation into new fertilizing products, we need regulatory measures that ensure data protection and fair competition. Companies that invest in producing data required to meet regulatory requirements for bringing a product to market should receive fair compensation for the use of their data under an appropriate licensing agreement. Forcing companies to share their trade secrets as a public good essentially forces innovators to subsidize competitors.

The Fertilising Products proposal’s current approach to microbial biostimulants has this very effect. The Commission’s proposal for a positive list system for placing microbial biostimulants on the market is unfortunately not supplemented with appropriate tools to ensure that companies are not forced to release their trade secrets without fair compensation.

To promote innovation in new microbial biostimulant products, EBIC calls on the European Parliament and Member States in the Council to ensure that the spirit of the ‘trade secrets’ directive is applied to the Fertilising Products proposal.



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