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25 May 2020
A Polish company (the claimant) sued its former employee (the employee) and her newly established communication services company (the company). The reason for the claim was:
During the period of her employment, the employee, acting on behalf of the claimant as its proxy, executed an agreement for the provision of marketing and communication services with the client. Shortly afterwards, while on maternity leave, the employee received information from the client (at that time her employer's client) that it wanted to terminate the cooperation with the claimant due to a conflict with one of the claimant's shareholders, and establish a company in Poland with the aim of providing the same services thereto as hitherto had been provided by the claimant.
Shortly thereafter, the employee terminated her employment contract with the claimant by mutual agreement and established the company. The financing for the abovementioned company came from the client, which acquired a majority therein.
An important aspect of the case was that while being employed by the claimant, the sued employee undertook a contractual obligation to respect professional secrecy including all information concerning potential customers of the claimant and its affiliates during the term of her employment contract and for one year from its termination or expiration.
In view of the above, more than one year after the employee's contract, the claimant requested:
Neither the regional court nor the court of appeal shared the claimant's point of view for the following reasons:
Dissatisfied with the decision, the claimant filed a cassation appeal and the case was referred to the Supreme Court for adjudication.
The case was examined under Article 11 of the Act on Combating Unfair Competition of 16 April 1993. At present, Article 11 has a different wording following the implementation of the EU Trade Secrets Directive (2016/943/EC).
In accordance with the former Article 11(1) of the Act on Combating Unfair Competition:
An act of unfair competition shall be a transfer, a disclosure or a use of other parties' information constituting trade secrets, or acquiring such information from an unauthorised person, provided that it poses a threat to or violates an entrepreneur's interests". This applies to "persons who worked under an employment relationship or within the scope of another legal relationship for a period of three years from cessation thereof unless a contract provides otherwise or the requirement for secrecy has ceased.
In turn, Article 11(4) of the Act on Combating Unfair Competition states how to understand trade secrets:
Trade secrets shall be any technical, technological, organizational or other information of economic value concerning an enterprise and not disclosed to the public, with regard to which an entrepreneur has taken appropriate measures to preserve their confidentiality.
In accordance with the above provisions and case law and consistent with the requirements of the EU Trade Secrets Directive, as well as Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, the prerequisites for the protection of a given information within the meaning of Article 11 of the Act on Combating Unfair Competition are that:
Importantly, trade secrets do not include information that interested parties can obtain in the normal and legitimate course of business. On the other hand, information does not lose its nature as a trade secret simply because it is known to a limited number of persons with a discretionary obligation, including business partners.
First, the Supreme Court explained that, with respect to claims assessed in previous instances, cooperation between the company and the client, even though it was the claimant's former client, cannot be generally forbidden. If anything can be illegal under such circumstances, it is a potential use of the claimant's trade secrets in such cooperation.
Second, even before their employment contract was terminated and then during the contractual period of the obligation, the employee had taken action and cooperated with the client, which had led to the establishment of the company and the commencement of the provision of services to the client.
Bearing this in mind, the Supreme Court came to the conclusion, which is the most important in the judgment under consideration, that if an employer accuses a former employee of violating its trade secrets during the period specified in an employment contract, this results in the burden of proof being shifted onto the former employee that:
In the examined case, the employee had the burden to prove that the information transferred to the new company when establishing and cooperating with the claimant's former client was not the claimant's trade secrets. The new company, on the other hand, had to prove that the information obtained was a trade secret of the client (ie, the Swedish company) and not of the claimant.
The Supreme Court also indicated that any contractual or statutory limitation of the time period of the obligation to keep the trade secrets confidential by the employee was irrelevant with regard to information acquired illegally, even if such acquisition occurred during the employment relationship.
This judgment is interesting because it explains the scope and methods of protection by entrepreneurs against the unauthorised disclosure of trade secrets by former employees. In addition, it distinguishes the possibility of the violation of someone's trade secrets by the same person, acting as an employee or unauthorised person, depending on whether said person has obtained information constituting a trade secret within or outside the employment relationship.
The judgment, as well as the currently applicable (amended in 2019) provisions of the Act on Combating Unfair Competition provide broader protection for entrepreneurs and better protection against unauthorised disclosures of trade secrets.
For further information on this topic please contact Szymon Gogulski or Jacek Zwara at Soltysinski Kawecki & Szlezak by telephone (+48 22 608 7000) or email (email@example.com or firstname.lastname@example.org). The Soltysinski Kawecki & Szlezak website can be accessed at www.skslegal.pl.
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