MALTA Law and Practice Contributed by: Deo Falzon, Fenech & Fenech Advocates
5.5 Enforcement and Remedies Civil remedies available to a trade secret holder include provisional and final injunctions to prohibit or cease unlawful acquisition, use or disclosure; bans on the production, marketing, import or storage of infringing goods, corrective measures (such as recall, depriving goods of their infringing quality, destruction or delivery up of materials embodying the secret) and damages calculated by reference to actual prejudice (including lost profits and unfair gains) or, alternatively, a reasonable royalty. Courts may also order publica- tion of the decision and impose financial penalties for non–compliance with court orders. During litigation, parties can request various measures to preserve confidentiality, including: • to have evidence accessible only to court-appoint- ed experts; • to preserve evidence in the judge’s chambers; and • to have evidence accessible only to the parties’ lawyers. 6. Know-How 6.1 Definition and Legal Basis of Know-How Know-how in itself is not a standalone statutory right; however, contractual obligations can create similar confidentiality or non-compete obligations. 6.2 Protectability Requirements and Scope Anything that meets the criteria for trade secret pro- tection can constitute protectable know-how; how- ever, technically, anything that can be the subject of a contract can be protected through confidential obliga- tions or, in the case of employment relationships, post- termination restraints. The Maltese courts, however, follow UK practice and post-termination restraints must be strictly and narrowly interpreted and cannot prevent an employee from practising their profession under the guise of confidentiality or know-how. 6.3 Ownership, Creation and Employee Know-How As know-how per se is not created statutorily, aspects of employee creations are governed by the relevant IP
Employees may lawfully access trade secrets in the normal course of employment, but unauthorised use or disclosure, whether by employees or third parties, will be unlawful where it breaches contractual, statu- tory or fiduciary duties. On the other hand, disclosure without confidentiality safeguards or to persons free to use or further disclose the information, may under- mine secrecy and result in loss of protection, as the information may no longer qualify as “secret” within the meaning of the Act. 5.3 Misappropriation of Trade Secrets Misappropriation or unlawful acquisition of a trade secret occurs where information is obtained, used or disclosed without the consent of the trade secret holder through conduct contrary to honest commer- cial practices. This includes unauthorised access to, copying of or appropriation of documents, materials or electronic files containing the trade secret; breaches of confi- dentiality agreements or other duties of confidence; breaches of contractual or legal duties restricting use; and “downstream” misuse where a person knew or ought to have known that the information originated from unlawful conduct. In employee disputes, acquisition and use of informa- tion within the scope of employment is lawful, but use or disclosure outside that scope, ie, contrary to con- fidentiality obligations, constitutes unlawful use. The Act does not protect employers against employees’ use of general skills and honestly acquired experi- ence. In joint venture or collaboration settings, it is expected that the analysis would focus on the governing agree- ments, review the agreed purpose and assess any disclosures that breach contractual confidentiality or use limitations. 5.4 Duration and Loss of Protection It is potentially indefinite as long as the information continues to meet the statutory definition of a trade secret. Accidental or authorised disclosure does not automatically terminate protection; the decisive issue is whether, following the disclosure, the information remains secret within the relevant circles.
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