Disclosed trade secrets as an act of unfair competition

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The Act on Combating Unfair Competition of April 16, 1993 (Journal of Laws of 2018, item 419) regulates the prevention and combating of unfair competition in economic activity, in particular industrial and agricultural production, construction, trade and services - in the public interest , entrepreneurs and customers. The given act also states what a trade secret is.

It is worth recalling that entrepreneurs, within the meaning of the Act, are natural persons, legal persons and organizational units without legal personality, which, by conducting, even as ancillary, gainful or professional activity, participate in economic activity (Article 2 of the above-mentioned Act).

Pursuant to Art. 3 sec. 1 above of the Act, an act of unfair competition is an act that is against the law or morality, if it threatens or violates the interest of another entrepreneur or customer. The acts of unfair competition are in particular:

  • misleading designation of the company,

  • false or deceptive indication of the geographical origin of goods or services, misleading designation of goods or services,

  • breach of a trade secret,

  • inducing to terminate or fail to perform the contract,

  • imitation of products, slander or unfair praise,

  • obstructing access to the market,

  • bribery of a person holding a public office, as well as unfair or prohibited advertising,

  • organizing an avalanche sales system and conducting or organizing activities in a consortium system (Article 3 (2) of the above-mentioned Act).

What does a trade secret mean?

A trade secret is understood as technical, technological, organizational information of a company or other information having economic value, which as a whole or in a specific combination and set of elements are not commonly known to people who usually deal with this type of information or are not easily accessible to such people, provided that the person authorized to use the information or dispose of it, with due diligence, took steps to keep it confidential (Article 11 (2) of the above-mentioned Act).

It is worth emphasizing that information considered as business secrets cannot be widely known in a given industry or easy to find by other interested parties. Therefore, the entrepreneur should ensure the best possible protection of his company's secrets against disclosure to unauthorized persons. Information treated as business secrets should be particularly protected by entrepreneurs in order to keep it secret.

Obtaining information constituting a trade secret is an act of unfair competition, in particular when it takes place without the consent of the person authorized to use or dispose of the information and results from unauthorized access, appropriation, copying of documents, objects, materials, substances, electronic files containing this information or enabling the application for their content (Article 11 (3) of the above-mentioned Act).

In view of the above, entrepreneurs should secure business secrets to a greater extent in order to protect themselves against the opposing party's argument that they did not exercise due diligence, because the protected information about the company was easy to find or known to other people in the industry.

Example 1.

There was a conflict in a company producing skin care cosmetics, between two partners, as a result of which one of them provided the competition with information about the production technology. In the trial for the violation of unfair competition acts, the unfair partner proved that access to documents, production equipment and information about the production process was not properly secured. He pointed out that no confidentiality agreements were signed with the employees, while the cooperation agreements with contractors were not protected by appropriate business secrecy clauses. Thus, confidential information about the company was available to other people in the industry. In view of the above, the court issued a judgment that there were no grounds to believe that acts of unfair competition had been committed by breaching the trade secret. The lack of due diligence and the application of specific conditions to protect trade secrets contributed to the negative outcome of the case and the conclusion that this information was disclosed to the public.

It is worth emphasizing that persons who came into possession of this information, even though they knew or could easily find out that it was trade secrets, may be held responsible for obtaining information on acts of unfair competition.

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Protect your company's confidential information for longer

An act of unfair competition is the disclosure, use or acquisition of someone else's information constituting a business secret (Article 11 (1) of the above-mentioned Act). Therefore, obtaining information constituting a company's secret will already be the basis for a claim under the above-mentioned act. In order to protect confidential information, the entrepreneur will not be limited in time or required to fulfill specific formal requirements.

It is worth pointing out that the provision was deleted from the previous act, according to which the employee was obliged not to disclose, use or disseminate company secrets only for 3 years after the termination of the employment relationship. Currently, company secrets will be protected until they become public or findable for others.

Important!
Company information will be protected as long as its significance is kept confidential.

The use or disclosure of information constituting a trade secret is an act of unfair competition, in particular when it occurs without the consent of the person authorized to use or dispose of the information and violates the obligation to limit their use or disclosure resulting from an act, legal act or other act, or when it was made by a person which obtained this information by committing an act of unfair competition (Article 11 (4) of the above-mentioned Act).

Claims due to the aggrieved entrepreneur

In the event of an act of unfair competition, the entrepreneur whose interest has been threatened or infringed may request (Article 18 (1) of the above-mentioned Act):

  • cessation of unlawful activities;

  • removing the effects of prohibited activities;

  • submitting a single or multiple declaration with appropriate content and in an appropriate form;

  • compensation for the damage caused, on general terms;

  • issuing unjustified benefits, on general terms;

  • adjudication of an appropriate amount of money for a specific social purpose related to supporting Polish culture or protection of national heritage - if the act of unfair competition was culpable.

Important!
An entrepreneur whose interest has been threatened or violated as a result of an act of unfair competition, will be able to request that information on the issuance of a judgment on breach of business secrets be made public.

Pursuant to Art. 18 sec. 3 above of the Act, in the event of an act of unfair competition consisting in a breach of a trade secret, the court, at the request of the entitled party, may oblige the defendant to disclose to the public information about the judgment or the content of the judgment, in a specified manner and to a specified extent, if it is justified due to the circumstances of the act unfair competition, in particular the manner of the act, the value of the information concerned by the act, the effect of the act and the probability of the act of unfair competition in the future, and if the defendant is a natural person - if it is not additionally opposed by the legitimate interest of the defendant, in particular protection of his personal rights. The manner and scope of disclosing information about the judgment or the content of the judgment to the public may not lead to the disclosure of business secrets.

Important!
An entrepreneur whose interest has been threatened or violated as a result of an act of unfair competition, will be able to demand compensation for breach of trade secrets.

If it is found that an act of unfair competition consisting in a breach of a trade secret, the court may, at the request of the defendant, oblige the defendant to pay to the claimant an appropriate remuneration, in the amount not higher than the remuneration that at the time of its investigation would be due as the authorized consent to use from the information, for no longer than until the end of secrecy. However, the defendant should prove that at the time of using or disclosing information constituting a trade secret, he did not know, or with due diligence, could not have known that the information was obtained from a person who used it or disclosed it in an unlawful manner (Article 18 (4)). of the above-mentioned act).

In addition, in the event of an act of unfair competition consisting in breach of a trade secret, the entitled party may demand, instead of the above-mentioned compensation, compensation for the damage by payment of a sum of money in the amount corresponding to the remuneration that, at the time of its investigation, would be due as a consent granted by the entitled to the use of confidential information. enterprises (Article 18 (5) of the above-mentioned Act).

It is worth adding that in accordance with the amendment to the provisions on acts of unfair competition, obtaining information constituting company secrets will not be punished if it was obtained through completely different methods, research, tests that could be obtained from a legal source and were available to a wider group.

Summing up, it should be emphasized that the amended regulations strengthen the protection of trade secrets. Employees will be obliged to keep it for a longer time than before, i.e. until they are not generally available. The aggrieved entrepreneurs will be able to expect financial compensation from persons who commit acts of unfair competition by breaching trade secrets or making the judgment public. Entrepreneurs will not have to report such violations and carry out additional formalities, because the court will examine the grounds for the claim for acts of unfair competition.