Trade Secrets and the Data Act

Abstract

Automated systems collect vast amounts of data, which could be utilized across various business sectors. The EU has recognized their potential for the data economy. To exploit such potential, there is a need to provide access to data. For example, the objective of the EU’s Data Act is to provide new possibilities for accessing and reusing information. Some information exchanged may be subject to trade secret protection. However, specific characteristics of trade secret protection create difficulties for information sharing. In essence, trade secret protection requires that information should be kept secret, or at least relatively secret. This requirement contributes to the reluctance of trade secret holders to share their information. They would rather lock it down. That is because, if the information becomes generally known in industry circles, it will lose its trade secret status along with any related competitive advantage. At the same time, trade secret protection leaves considerable room for competition, which arguably makes it suited to the data economy. A trade secret is not an exclusive right, which means that competitors may independently create similar information. Access to information through reverse engineering is also allowed. All these specific characteristics make trade secret protection an uncertain means of protection. This article will elaborate on how the uncertainties and specifics related to trade secret protection create a conflict between demand for access to information and the protection of trade secrets. It will analyze how the provisions of the Data Act aim to accommodate the protection of trade secrets while simultaneously mandating access.