On 27 May 2021 the National Assembly of the Republic of Serbia adopted the new Law on the Protection of Trade Secret [1] („Law“). The Law came into force on 5 June 2021 and introduced a series of changes.
The objective of the Law is the harmonization with the relevant regulations of the European Union, specifically:
- Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure [2],
- Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights [3].
The Law introduces several new solutions, most important of which we present below.
a) Reasonable measures for protecting secrecy of information
The Law provides a more precise definition of a trade secret in relation to the previous Law on the Protection of Trade Secret [4] (“Previous Law”), especially by introducing measures that the holder of a trade secret must take to preserve secrecy of information.
The Law defines these measures as “reasonable measures to preserve secrecy of information”, which include, inter alia, the drafting of an internal act on how to handle trade secrets, who are the authorized persons and what their rights and obligations are when handling trade secrets, along with the measures concerning physical or electronic protection of access and handling trade secrets. In that sense, in relation to the earlier formulation of “appropriate measures” prescribed by the Previous Law, which was not precise enough, the Law provides concrete examples, stating exempli causa what is considered as reasonable measures. Despite the fact that the measures for maintaining secrecy of information in the Law are given for the sake of example, it seems that the implementation of some of the listed measures by the secret holder would, in case of a dispute, facilitate proving that some information or data are a trade secret.
b) Lawful acquisition, use and disclosure of information representing a trade secret
Another novelty of the Law is that it prescribes certain situations when the acquisition, use and disclosure of information that is a trade secret will be considered lawful. In addition to the specific examples that include, but are not limited to:
- The information being acquired through independent discovery, or
- The fulfilment of the rights of employees or representatives of employees to get informed and have consultations pursuant to the special regulations or the EU regulations,
what has also been kept from the Previous Law is the general formulation that the acquisition, use and disclosure of information will be lawful if performed in accordance with the good business practice.
c) Violation of trade secret
The biggest novelty in defining the violation of trade secrets in the Law is that it prescribes that the unlawful use of trade secrets is considered to be the production, offering or marketing of the violating goods, i.e. import, export or storage of violating goods for the purpose of production, offering or marketing of goods, if the person who performed the stated activities knew or in the given circumstances must have known that the trade secret was used unlawfully.
d) Compensation of damages due to the violation of trade secret
The Law now specifically stipulates that the holder of a trade secret, i.e. the licensee, is entitled to compensation for non-pecuniary damage caused by the unlawful acquisition, use or disclosure of a trade secret.
Unlike the Previous Law, the Law does not contain a provision which prescribes the right of the plaintiff to claim compensation up to three times the amount of the usual compensation he would have received for a specific form of use of the object of protection if that use were lawful. On the other hand, the Law stipulates that if the court cannot determine the amount of compensation in accordance with the criteria prescribed by the Law, the court should also take into account the amount of compensation that a person who violated a trade secret would pay for the lawful use of a trade secret.
e) Sanctioning the breach of a trade secret – misdemeanor and commercial offence
Another novelty of the Law is that a sanction is prescribed in the case when an unlawful acquisition, use and disclosure of information that is a trade secret is performed by an entrepreneur or a natural person, in which case the entrepreneur or a natural person will be liable for a misdemeanor. For such a misdemeanor, the entrepreneur will be fined in the amount of 50,000 to 500,000 dinars, while for the same misdemeanor committed by a natural person, the Law prescribes a fine in the amount of 20,000 to 150,000 dinars. On the other hand, the Law regulates the responsibility for unlawful acquisition, use and disclosure of information that is a trade secret by a legal entity, i.e. a responsible person in a legal entity in the same way as the Previous Law, meaning that such actions constitute a commercial offence. The fines prescribed for such commercial offences have also remained the same in the Law, so that they amount to 100,000 to 300,000 dinars for a legal entity, i.e. from 50,000 to 200,000 dinars for a responsible person in a legal entity.
Conclusion
The new Law on the Protection of Trade Secret represents another step of the Republic of Serbia towards harmonization of positive legal regulations with the regulations of the European Union. The new solutions of the Law can be much more favorable for the holders of trade secrets, and in that sense it is expected that the proper and successful application of the Law will lead to the better and more efficient protection of trade secrets in the Serbian economy.
[1] Official Gazette of the RS, no. 53/2021
[2] Official Gazette of the European Union as of 15 June 2006, no. L 157/1
[3] Official Gazette of the European Union as of 30 April 2004, no. L 157/45
[4] Official Gazette of the RS, no. 72/2011
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