Book Review: Cross-Border Trade Secret Disputes in the European Union – Jurisdiction and Applicable Law

This is a review of “Cross-Border Trade Secret Disputes in the European Union – Jurisdiction and Applicable Law” by Lydia Lundstedt (Stockholm University) a publication that is part of the Elgar Monographs in Private International Law. The aim of this book is to address the opaque relations between EU rules on Private International Law and the EU Trade Secrets Directive in the context of transnational enforcement of trade secrets, ultimately proposing solutions that align with the directive’s objectives: enhancing EU competitiveness, incentivising innovation, and facilitating the internal market growth.

The book is divided into two distinct parts. Part 1, “The Factual, Theoretical, and Substantive Law Background,” comprises four chapters that lay the groundwork for Part 2. Part 2, “Trade Secrets and Private International Law,” spans six chapters and goes into the Private International Law aspects of trade secrets. In more detail: 

In Chapters 2-4 of the book, the starting point is that, despite some harmonisation efforts at the international and EU levels, differences in trade secret protection persist across countries due to varying approaches and legal foundations for protection. The TRIPS Agreement classifies trade secrets as intellectual property but does not mandate their protection as such, setting unfair competition as the minimum standard. At the EU level, the Trade Secrets Directive leaves considerable discretion to the Member States, resulting in a mosaic of different approaches, ranging from sui generis laws to unfair competition laws and of course intellectual property laws ultimately rendering the characterisation of cross-border disputes regarding trade secret violations more than challenging.

In Chapter 5, it is noted that characterization under EU private international law usually operates from an autonomous EU perspective. This approach considers the definitions of legal concepts under EU substantive law alongside the private international law rules. Chapter 6 delves into the importance of interpreting international law consistently with the somewhat limited international framework for protecting trade secrets in private international law. Chapters 7 and 8 build upon these discussions by offering insights into jurisdiction and applicable law concerning disputes among contractual partners, competitors, and employees with employers. Finally, Chapter 9 investigates how overriding mandatory rules, public policy considerations, and non-excludable rules impact party autonomy.

The conclusions drawn from the analysis are founded on the principle that establishing legal certainty regarding jurisdiction and applicable laws fosters knowledge sharing among trade secret holders and users.

Lundstedt interprets this through the following logical sequence of thoughts: 

Legal certainty is facilitated by allocating jurisdiction to the courts of the Member States that have proximity to the dispute and/or that are foreseeable to the parties. The objective of foreseeability is furthered by giving effect to the reasonable assumption that the parties intended that the same court hear contractual and concurrent non-contractual claims. The objective of proximity is furthered by allocating jurisdiction to the courts of the Member States where the trade secret holder is established or has commercial interests.

The reasoning behind the conclusions is that most trade secret litigation occurs between parties who are familiar with each other. Consequently, the defendant typically knows the location of the trade secret holder’s commercial interests and establishment, making it foreseeable that they could be sued there.

Undeniably, this work makes a solid contribution to the state of the art by shedding light on a highly complex legal topic, relevant not only to academia but also with significant economic implications. By employing a legal doctrinal methodology, Lundstedt masterfully addresses all the research questions posed at the outset, providing a comprehensive analysis while maintaining a clear focus on encouraging innovation and competitiveness in the EU market.

Available in Hardback & E-Book 

Extent 334 pages

ISBN 978-1-03531-510-9

Publisher Edward Elgar Publishing