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How to protect a trade secret?

Damages, penalties, and other claims

1. Definition of a trade secret

The notion of a trade secret and its protection are regulated by the Law on Trade Secrets Protection („Official Gazette RS“, No. 53/2021 hereinafter: „Law“).

Trade secrets are all pieces of information that:

1) are secret because there are not in their entirety or regarding their structure and the whole of their parts generally known or easily accessible to persons who within their activities have contact with such type of information on a regular basis,

2) have commercial value because they represent a secret,

3) the legal owner of the secret has taken reasonable measures to preserve their secrecy.

2. Infringement of a trade secret

A trade secret can be infringed by unlawful acquisition, use, or disclosure.

Acquisition of a trade secret without the consent of the trade secret owner is considered to be unlawful if done in the following way:

1) unlawful access to, acquisition, or reproduction of documents, subjects, materials, substances, or electronic files which are under a lawful control of the trade secret owner, and contain a trade secret, or the trade secret can be deduced from them, or

2) against the good trade customs.

Use or disclosure of a trade secret without the consent of the trade secret owner is considered to be unlawful if it is done by a person which:

1) acquired unlawfully the trade secret,

2) breached the confidentiality agreement or other obligation relating to the prohibition of the trade secret disclosure,

3) breached contractual or other obligation which limits the use of a trade secret.

Acquisition, use, or disclosure of a trade secret is considered unlawful also if a person in the moment of acquisition, use, or disclosure knew or in the given circumstance must have known that the trade secret was acquired directly or indirectly from another person who unlawfully used or disclosed the trade secret.

Unlawful use of trade secret is also production, offering, or putting on the market of goods by which the infringement was made, that is, import, export or storage of goods by which infringement is made for the purpose of production, offering or putting on the market, if the person which performed those activities knew or the given circumstances must have known that the trade secret was used unlawfully.

3. Protective measures

For your precious trade and other information to be considered a trade secret, a thus enjoy legal protection, that is, for them to remain a secret, it is necessary to take minimal measures, which include the following:

1) enactment of a rulebook on trade secrets or incorporation of provisions on trade secrets in labor law acts or statutary acts of the company, which would precisely define which information is considered to be a trade secret and how those should be kept and protected,

2) conclusion of agreements and submission of declarations on protection of trade secret or incorporation of provision on trade secret in employment agreements or management contracts, which would in every detail regulate obligations and eventual damages.

A foreign natural or legal person has the same rights as a domestic natural or legal person regarding the protection of a trade secret if that follows from the international treaties applied in the Republic of Serbia, or from the principle of reciprocity.

4. Court Protection

In case of an infringement of a trade secret the trade secret owner can via lawsuit claim 1) damages, 2) judgment publication, 3) cessation of use or disclosure of a trade secret, and 4) prohibition of production, use, and putting on the market of goods by which the trade secret is being infringed, withdrawing such goods from the market or removing certain qualities from such goods.

The plaintiff can also request the destruction or handover of documents, items, materials, substances, or electronic files entirely or partially which contain a trade secret or which by themselves represent a trade secret.

Besides the material damages which comprise the simple loss, lost profit, and profit made by the person which infringed the trade secret, the trade secret owner also has a claim on immaterial damages.

Lawsuit due to infringement of a trade secret can be brought within 1 year from knowledge of the infringement and the perpetrator, but within 5 years from the infringement at the latest.

5. Penalties

The legislator also stipulated a penal protection in the form of fines for violation of the Law.

Any legal person which unlawfully acquires uses or discloses a trade secret shall be punished for a corporate offense by a fine in the amount of 100.000 to 3.000.000 RSD (≈1.000 – 25.000 EUR).

Any responsible person in a legal person shall be punished for the same unlawful act by a fine in the amount of 50.000 to 200.000 RSD (≈500 – 1.500 EUR).

An entrepreneur shall be punished for the same unlawful act by a fine in the amount of 50.000 to 500.000 RSD (≈500 – 5.000 EUR).

A natural person shall be punished for the same unlawful act by a fine in the amount of 20.000 to 150.000 RSD (≈200 – 1.200 EUR).

Miloš Marković PhD, Attorney at law

The information contained herein has been provided only for the purpose of general information and cannot be considered as a legal opinion or legal advice. Accordingly, the Law Firm Petrovic & Partners disclaims all responsibility and accepts no liability in respect to actions taken or not taken based on any or all the contents contained herein.