The Criminal Court of Mechelen (Belgium) ruled in favor of Bofin Biscuits against a former production assistant accused of having stolen the assistant director of the cookie baker’s laptop. The laptop allegedly contained the secret recipes of all the cookies produced by Bofin Biscuits. This case is interesting because of the nature of the secrets and also when compared to that of the “fig spread”-case discussed here two weeks ago. It also confirms that trade secret misappropriation cases do not necessary only involve complex matters on state of the art technology owned by large multinationals.

The facts of the case are rather straight-forward. On November 12, 2013 the assistant-director of Bofin Biscuits noticed that his laptop had gone missing during his absence from November 6 to November 11. Images from the surveillance video system of Bofin Biscuits showed that the actual taking of the laptop had not been filmed. The camera hanging outside the assistant-director’s office did show a production assistant walking down the hallway where the office was located, entering it and leaving with something clearly hidden under his coat. During the trial the production-assistant did not contradict that he was the person that had been filmed, but he denied that he had taken the laptop. When asked what he then was hiding under his coat, he claimed not to recall anything.

For the public prosecutor this was a clear cut case and he requested the court to sentence the former production assistant to a six month effective prison sentence and a 4.800 EUR fine. Bofin Biscuits, who had joined the proceedings by suing its now ex-employee for civil injury, requested 1.500 EUR for the still missing laptop, 2.500 EUR for the time spent on recovering the information stored on the laptop, 500 EUR moral damages and a provisional damages amount of 25.000 EUR for having stolen the secret cookie recipes.

Although the former production assistant continued to deny having stolen the laptop and although there was no footage of this person actually taking the laptop, the Criminal Court ruled that the images combined with the failure to explain what was hidden under the coat, provided proof that the ex-employee had stolen the laptop. The Criminal Court ruled that the accused had seriously damaged the trust Bofin Biscuits had awarded him with, that the facts he was accused of were very serious and showed that the former employee had no sense of morality. The Court therefore refused to suspend his sentence because doing so would send a wrong message. However, as the former employee had no criminal record and was looking for a new job, the Court did not follow the public prosecutor’s suggestion to impose criminal sanctions. According to the Court, such sanctions would have to added to his criminal file and this would significantly reduce the almost 60 years old accused’s chance of finding a new job. The former production assistant was sentenced to 80 hours of community service. As far as the civil sanctions requested by Bofin Biscuits are concerned, the court ordered a payment of 2,308.48 EUR. This covered the price of the laptop and software on it, the time spent on recovering the data stored on the laptop and the moral damages. As Bofin Biscuits had failed to prove that the stolen recipes had in the meantime been used to market competing cookies, the Criminal Court only awarded provisional damages in the amount of 1 symbolic Euro for the theft of the recipes. This leaves the possibility for Bofin Biscuits to continue the proceedings if in the future it would prove that the recipes are indeed being used by any party other than Bofin Biscuits.

This decision clearly illustrates the challenges posed by the current Belgian (and European) legal framework regarding the enforcement of trade secrets via the criminal courts, explaining why criminal cases involving trade secrets are even rarer than civil ones. Although most EU Member States have criminal liability for trade secret ‘theft’, such cases are often difficult to prosecute. In Belgium for instance the stealing of the information itself cannot be criminally prosecuted as a trade secrets case. Only the consequent transfer of the so-called “factory secret” to a third party is criminally liable. Even if a specific trade secrets case qualifies as a criminal offence in a Member State, then there is still no guarantee that it will be prosecuted by the authorities given the backlog that many public prosecutors and criminal courts are facing. As soon as there is a cross-border aspect to the case, successful criminal prosecution becomes even more complicated. Moreover, criminal proceedings will not always have a dissuasive effect, in part because effective jail time is rarely a part of the sentences that are handed down. The fines and awarded damages also tend to be too low to have a real dissuasive effect as well as to make up for the costs involved with the case.

This differs in two significant ways from trade secret theft in the United States, as codified by the Defend Trade Secrets Act. First, in this case, because the trade secrets holder had sued for civil injury, the Court had to consider both the criminal and civil penalties at the same time.  This would not be the case in the US where the criminal and civil cases are handled in two separate cases, usually in two separate courts.  Second, in the US, damages can be imposed based on the value of the secrets obtained.  That value can be assessed through numerous considerations, including the value to the original trade secret holder.  The damages assessment does not have to require proof that the trade secrets are being used by the misappropriating party or a transfer to a third party.  This lack of transfer to a third party was dispositive to the Belgian court in this case.