TRADE SECRETS workshop III © 2009 Prof. Charles Gielen EU-China Workshop on the Protection of Trade Secrets Shanghai 23-24 June 2009

Litigating trade secrets Reminder: art. 1.2 TRIPs: IP also refers to protection of TS Therefore, Part III of TRIPS is applicable to enforcing TS Enforcing IP rights harmonized in EU through Enforcement Directive of 2004 Peamble of Dir.: to define the scope of this Directive as widely as possible in order to encompass all the intellectual property rights Unclear whether Dutch law implementing the Directive applies to protection of TS I think it does also in the light of TRIPs: what does that mean?

What can Rising Sun do? In case of violation of its TS rights: what is the weaponry available to Rising Sun to get evidence of infringement information concerning the infringement an injunction against the infringement?

Dutch procedural law Implementation of the Enforcement Directive per 1 May 2007 in Code of Civil Procedure (“CCP”) New measures for taking evidence (based on Art. 7 resp. 6 Dir 2004/48 EC): description (including videotaping and photographing) taking of samples preservation of evidence (by seizure of it) including (copies of) documents (also digital) motion to get access to evidence In addition to existing pre-trial measures: preliminary (expert) witness hearings (art. 186 CCP) preliminary expert opinion (art. 202 CCP)

Preservation/description evidence Legal test for admissibility of ex parte preservation/description order: “sufficient likelihood of infringement or threat of infringement” (1019b (1) CCP) relatively not too high a threshold, but need to satisfy the Court is required and mere speculation of infringement leads to rejection of application - lower than likelihood of infringement in summary proceedings (“kort geding”): Abbott/Teva District Court The Hague 2007

Preservation/description evidence Evidence collection procedures as currently applied enroll in two stages: Preservation of evidence by seizure through Court application/order, evidence is then put into custody; defendant won’t be heard as a rule File motion to obtain access to the evidence in separate action (Art 843a jo. 1019a CCP), defendant will be heard If protection of confidential information is not safeguarded, 1019a dictates rejection of the application

Preservation by seizure of evidence Seizure conducted by a bailiff, normally assisted by independent expert/patent attorney and, if necessary, computer expert appointed in the order Results of seizure/description/taking of samples transferred to independent custodian – possibly sealed until further court order

Access to evidence Plaintiff entitled to access the evidence if there is a “legitimate interest” Establishing infringement is legitimate interest But in case of mere threat legal uncertainty: not in The Hague, Abbott/Teva 2007, yes in Amsterdam, Meissen/Deko 2008 Access cannot amount to an order to release entirely to plaintiff: Art 843a CCP: looking into/obtaining copies/obtaining resume’s Trade secrets need protection No published case law on successfully conducted access proceedings yet, developing field

Access to evidence Distinction between types of information Technical information to establish/support infringement Access during/prior to proceedings Commercial/accounting information Access after infringement has been found, is not in dispute Medtronic/Abbott, District Court Maastricht 2008 Meissen/Deko, District Court Amsterdam 2008

After seizure/description/taking sample, what then? Analysis of the seized sample Disassembly/testing device for days or weeks is very likely to be rejected: - doubtful this qualifies as “description” as meant in 1019d CCP But perhaps (though very unlikely) possible if: this evidence is essential/other technical documents (allegedly) not available; impact on the business is kept to a minimum (test products in stock at Shining Moon’s facility) an unconditional undertaking/bank guarantee to compensate damage is provided

How to stop Shining Moon? Main Proceedings Mostly panel of 3 professional judges Takes appr. one year Preliminary injunction proceedings (“kort geding”) May be issued within hours or days during trade fairs (also ex parte – without Shining Moon being heard -, which is highly exceptional in patent or TS cases) Otherwise: a few weeks or faster if need exists

Summary proceedings Unique features Dutch “kort geding” (summary proceedings) Literal: “short proceedings” True characteristics: “mini full proceedings” Widespread and frequently used by parties internationally Rulings of strictly preliminary nature – no bearing on main proceedings whatsoever Experience shows that disputes often finally settle after a ruling in “kort geding”, especially in “heavily litigated” cases Limited to “urgent” cases; ongoing (threat of) infringement basically suffices

Summary proceedings No formal written phase, but Defendant can file answer to writ of summons + possibility to file counter-claim Mainly aimed at preliminary injunction, very rarely at obtaining provisional damages Not limited to “simple cases” Judgment handed down 14 days after hearing, written and reasoned Provisional evaluation of the likely outcome in the main proceedings – lower level of proof compared to full proceedings (probable cause vs. balance of probabilities)

Rising Sun v. Shining Moon Rising Sun should try to preserve as much evidence as possible in early stage file requests for description/seizure of evidence incl. sample request access to sample for analysis if infringement found file for summary judgment + file for case on the merits and request access to seized evidence Shining Moon to assess whether confidential information is involved If so, ask for court order to preserve the trade secrets if it can be shown that case is without merits: request lift of seizure file a defence in the summary case and in the case of the merits

THANKS! charles.gielen@nautadutilh.com