UK Law and Practice Contributed by: Nicola Dagg, Steven Baldwin, Rory Clarke and Ashley Grant, Kirkland & Ellis International LLP
keep it secret (Regulation 2(1)). As yet, the cas - es decided since the statutory regime in the UK came into force have not considered the inter - pretation or practical consequences of this new requirement in any detail. It is expected that what constitutes “reasonable steps” in any given case will depend on, among other things, the type of information, its value, how that information is required to be used in the day-to-day operation of an undertaking’s busi - ness and the ordinary practices in the industry sector in which the undertaking operates. Under the common law/equitable regime for breach of confidence, “reasonable steps” is not a requirement for the protection of information as a trade secret. However, the information in ques - tion must have “the necessary quality of confi - dence” (which means it needs to be “sufficiently secret” ) as well as to have been “imparted in circumstances importing an obligation of confi - dence” . In practice, and subject to how the case law in the statutory regime develops, it seems likely that establishing that certain “reasonable steps” have been taken will assist in demonstrat- ing the “necessary quality of confidence” test has been satisfied. Some good practice options include: • ensuring that dissemination of the trade secret to employees is on a need- to-know basis only; • implementing strict security measures around employees who have access to the trade secret; • providing employees who have access to the trade secret with appropriate training to raise awareness of the key issue of confidentiality; • strengthening internal policies regarding the protection of trade secrets;
• implementing protective measures over the storage of confidential information, includ - ing any trade secrets where relevant, such as keeping hard copies physically secure and using passwords or encryptions if stored electronically; • marking confidential documents as confiden - tial; • carefully drafting NDAs and defining what constitutes “public domain” to avoid disputes over disclosure (see Illiquidx Ltd v Altana Wealth Ltd [2025] EWHC 299 (Ch)); • protecting electronic files with passwords and considering the use of firewalls, automatic intrusion detection systems and authentica - tion measures; and • taking heed of the fact that, whilst reverse engineering remains a lawful means of dis - covering trade secrets independently, busi - nesses should implement clear contractual provisions to prevent employees, contractors or business partners from engaging in unau - thorised reverse engineering. Following the exit of the UK from the EU, it remains to be seen whether decisions from European courts, including the CJEU, in relation to the meaning of “reasonable steps” under the Directive/Regulation will influence UK judges. 1.6 Disclosure to Employees Disclosure to employees does not impact the availability of protection for a trade secret per se. However, the manner (eg, breadth) with or without accompanying confidentiality controls, and the extent of the disclosure, are relevant in so far as these factors will relate to the assess - ment of whether reasonable steps were taken to keep the information secret. For example, if trade secrets are stored on the company’s shared drive with no restrictions on
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