UK Law and Practice Contributed by: Nicola Dagg, Steven Baldwin, Rory Clarke and Ashley Grant, Kirkland & Ellis International LLP
a key customer and therefore the location where the damage became irreversible. A key point in relation to jurisdiction, which was discussed in the Court of Appeal, was the effec - tiveness of Article 4(5) of the Directive, which prohibits unlawful use of a trade secret in the context of goods “where the person carrying out such activities knew, or ought, under the circumstances, to have known that the trade secret was used unlawfully within the meaning of paragraph 3” . Paragraph 3 includes reference to a person “having acquired the trade secret unlawfully” , which leaves open the question of which law should apply to the question of whether the acquisition was “unlawful” . This was not resolved in the Court of Appeal, and Arnold LJ acknowledged that this was a very difficult question that may, in due course, have to be answered by the CJEU (at least for the remaining member states of the EU).
Under common law/equity, the element of “mis- appropriation” is captured by the third limb of the common law test – ie, unauthorised use (or threatened use) outside the scope of consent will be a breach. 2.2 Employee Relationships Trade secrets misappropriation under the Regu - lation/Directive does not differ for an employee. The same requirements of secrecy, commercial value and reasonable steps apply. Under common law/equity, employees are under a general fiduciary duty to keep their employer’s information confidential. This duty is qualified in the case of ex-employees. For an ex-employee, only trade secrets rather than “mere” confiden - tial information can be protected. This is the main factor that distinguishes trade secrets from confidential information under UK law. The relevant factors to be considered in deter - mining whether information held by employees falls into the “mere confidential information” class or the “trade secrets class” are set out in 1.2 What Is Protectable as a Trade Secret . This distinction is particularly critical where there is an absence of express restrictions. However, employees also usually have express terms in their employment agreements restrict - ing the use and disclosure of confidential information and trade secrets, including post- employment. 2.3 Joint Ventures Any joint venture is likely to have express confi - dentiality provisions included in the agreement forming the joint venture.
2. Misappropriation of Trade Secrets
2.1 The Definition of Misappropriation Under Regulation 3(1), the claimant must prove one or more of unlawful acquisition, use or dis - closure in circumstances constituting a breach of confidence in confidential information. As the claimant only needs to prove one of unlawful acquisition, unlawful use or unlawful disclosure, it is possible in a claim for misappropriation that the information was gained lawfully but then used or disclosed unlawfully. For example, the trade secret may have been shared during a joint venture and then misappropriated by the joint venture partner by use of the trade secret out - side the scope of the joint venture.
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