[A2k] Open Letter: Proposed Trade Secrets Directive Risks EU Health, Environment, Free Speech And Mobility

La Quadrature du Net contact at laquadrature.net
Wed Dec 17 06:32:21 PST 2014


Themes: LOBBYING, FREE SPEECH, TRADE SECRETS, EUROPEAN COUNCIL, EUROPEAN COMMISSION  

La Quadrature du Net – For immediate release

Permanent link: https://www.laquadrature.net/en/open-letter-proposed-trade-secrets-directive-risks-eu-health-environment-free-speech-and-mobility


Open Letter: Proposed Trade Secrets Directive Risks EU Health, Environment, Free Speech And Mobility



*** Paris, 16 December 2014 — A couple of days before the European Council summit where will be discussed European economy and social policy [1], La Quadrature du Net signs an open letter written by Health Action International Europe against the directive's project on trade secrets [2]. Initiated by the business community, put forward by the Member States and the European Commission, it gives the possibility for private companies to sue any person that "unlawfully acquires, uses or discloses" the "trade secrets". Whistleblowers are poorly protected in this text, the directive creates a judiciary insecurity as it will dissuade from leaking from private companies. It participates to a movement reinforcing secrets, perceptible on the legislative and jurisprudential plan, against the claims of transparency coming from the civil society, and constitutes in this respect an unacceptable anti-democratic drift. ***

Read in PDF: http://haieurope.org/wp-content/uploads/2014/12/Statement-EU-Trade-Secrets-Directive-Needs-Amendments.pdf


Proposed trade secrets directive risks EU health, environment, free speech and mobility. Coalition of multi-sectoral NGOs call for amendments to protect consumers, journalists, whistleblowers, workers and researchers

AMSTERDAM — We strongly oppose the hasty push by the European Commission and Council for a new European Union (EU) directive on trade secrets [3], which contains overly-broad protection and inadequate safeguards. This unbalanced piece of legislation will result in legal uncertainty and endanger freedom of expression and information, corporate accountability, information sharing and, possibly, innovation, rather than create a competitive and sound business environment in the EU, as the Commission claims.

If the draft directive, which the Commission published in November 2013, is passed, consumers, workers, researchers, journalists and whistleblowers in the EU will be at risk. The definition of ‘trade secrets’ in the draft directive is unreasonably broad, enabling almost anything within a company to be deemed as such. Unsurprisingly, the draft directive text is strongly supported by multinational companies [4] because it would enable them to sue anyone who “unlawfully acquires, uses or discloses” their so-called trade secrets. Instead, the right to freely use and disseminate information should be the rule, and trade secret protection the exception.

Specifically, the following issues are likely to arise unless the directive is radically amended: 

* Companies in the health, environment and food safety fields may use this directive to refuse compliance with transparency policies, even in situations where the public interest is at stake

Health: Public access to biomedical research data, particularly data on drug efficacy and adverse drug reactions, is crucial for regulatory authorities, researchers, doctors and patients to fully access and understand in order to protect patient safety and conduct further research and independent analyses. This information is also necessary to avoid scarce public resources from being spent on therapies that are no better than existing treatments, simply do not work, or do more harm than good [5]. Moreover, disclosure of pharmaceutical research is needed to avoid unethical repetition of clinical trials on people [6].The proposed directive should not obstruct recent EU developments to increase sharing and transparency of this data [7].

Environment: Although the release of information demonstrates that some economic activities harm the environment, trade secret protection is regularly used to refuse the release of information on hazardous products within the chemical industry. Trade secret protection may, for example, be invoked to hide information on chemicals in plastics, clothing, cleaning products and other items that can cause severe damage to the environment and human health. It could also be used to refuse disclosing information on the dumping of chemicals, including fracking fluids, or releasing toxins into the air.

Food safety: Under EU law, all food products, genetically modified organisms and pesticides are regulated by the European Food Safety Authority (EFSA). Toxicological studies that the EFSA relies on to assess the risks associated with these products are, however, performed by the manufacturers themselves [8]. Scientific scrutiny of the EFSA's assessments is only possible with complete access to these studies. Companies, however, argue that this information contains confidential business information and strongly oppose its disclosure [9]. It is essential for the risk assessment work of public bodies to be properly monitored by the scientific community. All data that these public bodies use must therefore be exempt from the scope of the directive.

* The right to freedom of expression and information will be seriously harmed. 

Under the proposed directive, whistleblowers can use undisclosed information to reveal misconduct or wrongdoing, but only if “…the alleged acquisition, use or disclosure of the trade secret was necessary for such revelation and that the respondent acted in the public interest”. Determining whether disclosure was necessary can only be evaluated afterwards, however. In addition, it remains unclear whether many types of information (e.g., plans to terminate numerous employees) are qualified as “misconduct” or “wrongdoing”. This creates legal uncertainty for journalists, particularly those who specialise in economic investigations [10], and whistleblowers [11].

* The mobility of EU workers will be undermined. 

The proposed directive poses a danger of lock-in effects for workers. It can create situations where an employee will avoid jobs in the same field as his/her former employer, rather than risking not being able to use his/her own skills and competences, and being liable for damages. This inhibits one’s career development and professional and geographical mobility in the labour market [12].

Furthermore, contrary to the Commission’s claims, closed-door trade secret protection may make it more difficult for the EU to engage in promising open and collaborative forms of innovation. In fact, there is a risk that the measures and remedies provided in this directive will undermine legitimate competition—even facilitate anti-competitive behaviour [13]. As a result, the directive may not be the ‘magic bullet’ to keep Europe ahead in the innovation game.

Currently, industry coalitions are lobbying for the adoption of trade secret protection both in the EU12 and the United States where two new bills are pending before Congress [15]. If passed, these bills would allow the protection of trade secrets to be included in the Trans-Atlantic Trade and Investment Partnership (TTIP)—something that will be incredibly difficult to repeal in the future through democratic processes [16]. Given that TTIP is expected to set a new global standard for trade, its potential inclusion of trade secret protection is particularly worrisome.

Read in PDF: http://haieurope.org/wp-content/uploads/2014/12/Statement-EU-Trade-Secrets-Directive-Needs-Amendments.pdf


* References *

1. http://data.consilium.europa.eu/doc/document/ST-14866-2014-INIT/en/pdf
2. http://haieurope.org/
3. European Commission. Proposal for a Directive on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure. COM(2013) 813 final. November 28, 2013. Available at: http://ec.europa.eu/internal_market/iprenforcement/docs/trade-secrets/131128_proposal_en.pdf.
4. In the EU, a so-called “Trade Secrets & Innovation Coalition” is pushing for this directive. This coalition is even registered in the EU Transparency register under this name see: http://ec.europa.eu/transparencyregister/public/consultation/displaylobbyist.do?id=956363012640-91. This coalition includes Alstom, DuPont de Nemours, General Electric, Intel, Michelin, Air Liquide, Nestlé and Safran, who work together with the pharmaceutical and the chemical industries (see also http://www.ip-watch.org/2012/07/16/industry-groups-press-for-eu-us-action-on-trade-secret-protection ).
5. See for more information: HAI Europe Policy Paper. ‘Protecting citizens’ health: Transparency of clinical trial data on medicines in the EU’. Oct. 2013, p. 5. Available at: http://haieurope.org/wp-content/uploads/2013/10/HAI_Protecting-citizenshealth-transparency-of-clinical-trial-data-on-medicines-in-the-EU.pdf.
6. See Lemmens T and Telfer C "Access to Information and the Right to Health: The Human Rights Case for Clinical Trials Transparency" (September 22, 2011). American Journal of Law and Medicine 2012; 38 : 63-112. Available at SSRN: http://ssrn.com/abstract=1932436
7. The new EU Clinical Trial Regulation and the European Medicines Agency (EMA) 2014 access-to-data policy ensure that clinical data will be pro-actively published in a public database within 30 days after the marketing authorisation decision or the application's withdrawal (ref: http://english.prescrire.org/en/79/207/46302/3839/3303/SubReportDetails.aspx). The EU has further committed to open access to research publications and increased access to research results partly funded by EU biomedical R&D grants: See for the whole package of Horizon 2020: http://ec.europa.eu/research/participants/portal/desktop/en/funding/reference_docs.html#h2020-legal-basis-fp (More specifically see: H2020 rules of participation and H2020 Regulation of Regulation of Establishment). Establishment).
8. One of the EFSA’s most interesting objectives is to make its scientific opinions "reproducible" by others, a key validation criteria in scientific methodology.
9. The EFSA has recently launched a Transparency Initiative to improve its credibility, and is considering providing independent scientists with access to this data. For more information see: http://www.efsa.europa.eu/en/consultationsclosed/call/140717.htm. Unfortunately, this objective has been strongly criticised by the manufacturing industries (chemical, pesticide, seed, biotech, and additives) who argue that this toxicological data contain "confidential business information", which "should be protected from all disclosures and misuse at all times". These industries openly threatened the EFSA with legal action should the Authority decide to publish this data. EFSA would probably have a solid legal defense for such action because ensuring food safety serves as a strong justification. But this situation may change if the current directive on trade secrets covers such essential data.10. Orange M "Secret des affaires: un projet de directive organise l'omerta" 2 avril 2014 ;
www.mediapart.fr Mauduit L "[En France,] Les socialistes préparent l’omerta sur la vie des affaires" 22 juillet 2014 ; www.mediapart.fr.
11. Eurocadres opinion paper 20 October 2014 “An EU regulation on Trade Secrets” http://eurocadres.eu/IMG/pdf/20141020_trade_secrets.pdf.
12. Ibidem.
13. For example by delaying generic or biosimilar medicines entry on the market if clinical development is considered to be a trade secret.
14. See note 4.
15. House Bill: Trade Secrets Protection Act of 2014 (H.R. 5233) -- https://www.congress.gov/bill/113th-congress/house-bill/5233 and Senate Bill: Defend Trade Secrets Act of 2014 (S. 2267) -- https://www.congress.gov/bill/113th-congress/senate-bill/2267/text.
16. The US has made no secret of its explicit wish for strong language on trade secret protection in this agreement: see also http://transatlantic.sais-jhu.edu/publications/CRS_TTIP_report_Feb_2014.pdf, p 35.


** About La Quadrature du Net **


La Quadrature du Net is an advocacy group that defends the rights and freedoms of citizens on the Internet. More specifically, it advocates for the adaptation of French and European legislations to respect the founding principles of the Internet, most notably the free circulation of knowledge. 

In addition to its advocacy work, the group also aims to foster a better understanding of legislative processes among citizens. Through specific and pertinent information and tools, La Quadrature du Net hopes to encourage citizens' participation in the public debate on rights and freedoms in the digital age.

La Quadrature du Net is supported by French, European and international NGOs including the Electronic Frontier Foundation, the Open Society Institute and Privacy International.

List of supporting organisations: https://www.laquadrature.net/en/they-support-la-quadrature-du-net


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