Intellectual property in Albania has traditionally covered copyrights, patents, and trademarks. Business sensitive information has not been legislated as a protected right until the recent amendments by the Albanian Parliament to the Industrial Property Law which entered in force in August 2021 (the “Amendment”).
The purpose of the Amendment is alignment with EU acquis, and specifically Directive (EU) 2016/943 “On the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure”.
This is a welcomed novelty for the market players who now can rely on statutory legal means against the unlawful acquisition, use or disclosure of trade secrets that compromise their ability to obtain first-mover returns from their innovation-related efforts.
Definition of Trade Secret under the Amendment
The Amendment specifies which information enjoys protection as a trade secret and under what conditions. According to the definition, such information must meet the following requirements:
it is secret in the sense that it is not generally known among or easily accessible to persons within circles that normally deal with the kind of information in question;
it has commercial value; and
the person that is lawfully in the control of information, has taken reasonable steps to preserve its secrecy.
Taking ‘reasonable steps’ under the Amendment implies that the secret information is subject internal rules or acts for safeguarding the confidentiality of the information and designated people to ensure their implementation or, measures for the physical or virtual protection of access to the documents.
‘Commercial nature’ is attached to such information considered as trade secret which if illegally acquired, disclosed or used by an unauthorized party, can harm the financial, technical and scientific potential of the legal owner of the trade secret.
Lawful acquisition of trade secrets
The Amendment introduces four grounds when obtaining someone else’s trade secrets will be considered lawful:
by independent discovery or creation;
by reverse engineering unless legally not permitted under any ground;
by workers or workers' representatives exercising their rights of information and consultation in accordance with Albania law and practices;
any other practice which under given circumstances is in conformity with honest commercial practices.
Illegal acquisition, use and disclosure of trade secrets
The Amendment deals more extensively with circumstances that will be considered as unlawful acquisition, disclosure and use of trade secrets, on the premise that, as a rule the consent or authorization of the trade secret proprietor will be required for any such action. Consequently, the acquisition of a trade secret without the consent of the trade secret holder, shall be considered unlawful whenever carried out either by:
unauthorized access to, appropriation of, or copying of any documents, objects, materials, substances or electronic files, lawfully under the control of the trade secret holder, containing the trade secret or, from which the trade secret can be deduced; or
any other conduct which, given the circumstances, is considered contrary to honest commercial practices.
Unlawful disclosure and use of trade secrets without the consent of the rightful owner will be considered the following circumstances:
when information has been acquired unlawfully as per above,
when a person breaches the confidentiality agreement, or any other contractual obligation banning the disclosure or use of trade secret.
Even subjective knowledge of a person regarding the nature of an information can amount to unlawful acquisition, disclosure and use of a trade secret, in those cases when a person, knew or should have known under the circumstances that the trade secret had been obtained directly or indirectly from another person who was using or disclosing the trade secret unlawfully.
Further, the production, offering or placing on the market of infringing goods, or the importation, export or storage of infringing goods for those purposes, shall also be considered an unlawful use of a trade secret where the person carrying out such activities knew, or ought, under the circumstances, to have known that the trade secret was used unlawfully
Exceptions from the rules of protection
The Amendment does not offer judicial protection for the disclosure of trade secrets when information containing trade secret is disclosed and/or used in the context of:
exercise of freedom of speech and information including media freedom and plurality rights;
the discovery of an unprofessional behavior, illegal activity or violation on the condition that the defendant has acted in the interest of the general public;
disclosure made by by workers to their representatives to exercise their rights, provided that disclosure was necessary in that context;
for the purpose of protecting a legitimate interests recognized by Albanian law.
Judicial protection of trade secrets
The Amendment offers court protection to Albanian and foreign persons that suffer a violation of their rights under the law for the protection of trade secret.
The statute of limitation for bringing a claim against an infringer is 3 years from the discovery of violation or the person that committed it by the trade secret proprietor.
The courts and all parties participating in the proceedings for the purpose of protecting a legitimate interests recognized by Albanian law, are bound by the confidentiality obligation. To this effect, the Court in charge of a lawsuit, may issue orders as it sees fit to guarantee the confidentiality of the trade secrets.
The court may grant interim measure or relief, typically injunctions such as prohibition of the production, placing, import export or storage of infringing goods, or even their confiscation until the completion of court proceedings, or preservation of evidence which is considered vital to establish the violation of the law. Such remedies may also be ordered by the court ex parte if established that an irreparable and imminent damage may be caused to the proprietor of the secret unless such measures are granted.
Damage compensation under the Amendment
Compensation for damage as a final relief awarded by the court can be claimed according to general rules of Albania Civil Code and can include both pecuniary and non-pecuniary damage. In quantifying the damage, the court shall consider any effective damage caused, including lost profits of the aggrieved party and any other unjust profits realized by the infringer due to the illegal acquisition, use and disclosure of the trade secrets.
The court can decide to make the final judgment public in full or in part with the costs of the defendant.
The Amendment is a remarkable step forward in Albania regarding protection of trade secrets through judicial protection. It remains to be tested in practice how the new institution of trade secret protection will develop in the future.
Fatos Lazimi, Partner
The information provided in this newsletter is general in nature and does not constitute legal advice.