Trade secrets – one of the first decisions in this area!

Versailles Court of Appeal, 6th Chamber, February 27, 2020, No. 19/03646

In the case that gave rise to the decision in question, a company accused one of its employees of actions that violated trade secrets. It alleged that the employee had repeatedly transferred emails containing confidential company business information, obtained illegally, from his work email account to his personal email account, for his own personal use or that of a competitor.

The employee, for his part, argued that there was no trade secret, no violation of the latter, and, subsidiarily, that the trade secret could not be enforced with regard to the right to defend oneself, having made these transfers to gather evidence in the context of future litigation concerning his dismissal.

The Versailles Court of Appeal here unfolds a three-part line of reasoning, concerning (i) the characterization of a trade secret, (ii) the characterization of an unlawful acquisition and (iii) the exceptions to trade secrets.

Regarding the characterization of a trade secret, the court first recalls that the information must not be

" generally known or easily accessible to people familiar with this type of information because of their sector of activity " (Article L151-1 of the Commercial Code).

According to the court, exchanges relating to an increase in company prices justified by an increase in the cost of raw materials are therefore not trade secrets, as this information is necessarily known to the market.

Then, and more interestingly and surprisingly, the court seems to consider, without further explanation, that emails revealing negotiations between companies, without mentioning a final price, do not constitute a trade secret. However, negotiations have real commercial value, especially when they are conducted with large companies and when they contain price proposals. In its sovereign assessment of the facts, did the court consider this information to be known to the market, or did it determine that the exchanges ultimately revealed very little sensitive information? It will be necessary to follow future case law to determine whether this position is confirmed.

Regarding the definition of unlawful acquisition, the Versailles Court of Appeal ruled that it was not established when an employee forwarded emails to their personal email account, emails that corresponded to exchanges in which they participated as part of their work. Again, and surprisingly, the court, in its sovereign assessment of the facts, did not consider this to be an unauthorized copying of information without the company's consent. This position should undoubtedly lead companies to provide their employees with clearer instructions on what can and cannot be transferred and copied to a personal computer, and under what circumstances.

Finally, the Court of Appeal reiterates that trade secrets cannot be invoked in certain circumstances, in particular

" when obtaining, using or disclosing the secret is required or authorized by European Union law, applicable international treaties or agreements or national law, in particular in the exercise of the powers of investigation, control, authorization or sanction of judicial or administrative authorities " (Article L151-7 of the Commercial Code).

Considering that the employee forwarded emails in order to prepare his defense and gather evidence in the context of the upcoming litigation relating to his dismissal, the Versailles Court of Appeal considers that the employee falls within the exception and that a secret cannot therefore be used against him.

The court therefore rejects the company's claims for protection of trade secrets, which in this case proves to be ineffective in dealings with the employee in question.