IoT & AI

Business data get stronger protection with new laws on trade secrets

New Italian laws on trade secrets are a new useful protection in a business where IoT, M2M, blockchain and AI data are becoming exponentially valuable.

I discussed in a previous blog post about the types of protection that can be granted to business data and the proposals for new protections to cover potential gaps of intellectual property rights. However, a stronger protection is now given by Italian laws on trade secrets.

How laws on trade secrets change?

The topic is covered in an interesting article from my colleagues Francesca Ferrucci and Sofia Barabino which can be summarized as follows:

1. A broader definition of trade secrets

Trade secrets are intended as both business and technical-industrial information, the latter comprising also commercial information which therefore might include also M2M, IoT, blockchain and AI data.

2. Stronger protection against unlawful conducts

It is considered unlawful also the conduct of those who, at the time of the acquisition, use or disclosure, were aware – or, given the circumstances, should have been aware – of the fact that the trade secrets were unlawfully obtained (directly or indirectly) by a third party.

3. More effective powers for courts

Courts now have the power to issue an order, by means of which for those identified by it (essentially, any person taking part to these proceedings) it is prohibited to use or disclose the trade secrets subject-matter of the case. This means that courts now have explicit powers to control access to the contents of trade secrets throughout proceeding. Also, if requested by the party, courts can – as an alternative to the measures that may be adopted to protect trade secrets during proceedings – set a deposit to be paid by the other party, as assurance for the possible compensation for damages which may have been suffered by the requesting party.

4. Criminal sanctions to dissuade against breaches

The unlawful usage or disclosure of trade secrets in order to obtain (or allow third parties to obtain) profits is punished with up to two years of imprisonment. And the sanction is increased if the crime has been carried out by means of IT instruments.

What to do to exploit trade secrets protection?

The qualification of business data as trade secrets depends on a de facto assessment and is not linked to any registration which makes such protection even more valuable, but its applicability also more uncertain.

However, in order to be successful in such assessment, it is essential to adopt an internal policy on the qualification of business information and on the identification of the measures to adopt to protect them. This internal policy shall be tailored on the business of the company and on the type of information that is held by the company and on the modalities of usage of such information and it is recommendable to accompany it with a training for employees as to the conducts to be taken in order to protect business data.

Such measures might be considerably useful in relation to business data for which the applicability of other intellectual property rights is at least arguable.

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Giulio Coraggio

I am the head of the Italian Technology sector and the global head of the IoT and Gaming and Gambling groups at the world-leading law firm DLA Piper. IoT and artificial intelligence influencer and FinTech and blockchain expert, finding solutions to what's next for our clients' success.

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