Today’s blog post is the second in a series where we spotlight international issues in trade secret law, in particular, answering practical questions and providing insights into the application and interpretation by Belgian courts of specific aspects of the Belgian Trade Secrets Act.
Today’s post addresses two questions:
1) Which courts are competent?
As to the substantive jurisdiction of the civil courts, the claimant’s choice is rather limited compared to the different types of proceedings that are available (as discussed in our previous post). In short, it comes down to the fact that the enterprise court is the competent court. As an exception, the labor court has exclusive jurisdiction for a main claim against an employee who is still in office.[i] If there is a counterclaim based on an alleged violation of trade secrets, the court hearing the main claim remains competent for this counterclaim.[ii] Despite the wording of Article XI. 342/1 § 2 Belgian Economic Code, territorial jurisdiction is, in principle, determined on the basis of where the alleged infringement took place. Once it is established which court of appeal would have jurisdiction in that area, the court of first instance with substantive jurisdiction that falls directly under that court of appeal will have territorial jurisdiction. However, if the claimant prefers, the defendant’s domicile or residence can be used instead as the criterion for deciding jurisdiction. If the defendant has no domicile or residence in Belgium, the claimant’s domicile or residence can be the criterion.
The combination of the many variables regarding substantive and territorial jurisdiction on the one hand, and the “universal” nature of trade secret misappropriation on the other, might suggest a wide spread of Belgian judges ruling on trade secrets during the period in question. The analyzed case law shows the opposite to be true. For example, as far as we could ascertain, no proceedings concerning trade secrets have been brought before the labor court since the entry into force of the Trade Secrets Act. In our opinion, this is likely due to the fact that infringements of trade secrets are often discovered at a very late stage, and subsequently require a great deal of work in terms of gathering evidence, etc. As a result, by the time the claim is actually brought, the employee concerned will often no longer be employed by the claimant, and therefore the labor court will no longer have jurisdiction.
Even more striking is that all except one of the cases examined were conducted before the Belgian Dutch-speaking courts.[iii] What is more, that one exception did not, strictly speaking, concern the enforcement of trade secrets protection, as it was a patent infringement procedure in which arguments relating to trade secrets were used to refute the alleged patent infringement. Of course, the authors do not wish to fuel community division, but this striking choice in favor of Dutch-language courts had to be pointed out, if only to explain why this overview of case law was originally written in Dutch.
2) When is information secret?
To qualify as a trade secret, the information in question must be secret. This may seem obvious, but practice shows otherwise. For example, the misconception persists that any internal information that is marked[iv] confidential or secret will be considered “secret” within the meaning of Art. I.17/1 Belgian Economic Code, and as such, be protected as a trade secret. The President of the Antwerp enterprise court recalled that not all sensitive company information can be considered a trade secret.[v] In this case, the President was strict with the claimant: the allegedly secret information originated largely from the claimant’s accounts and could, therefore, be found on invoices or consignment bills. In principle, customers had a copy of these documents, and according to the President, it was therefore likely that competitors with experience in the sector and who thus knew the customers, would have been able to reconstruct this information, or put together the claimant’s pricing strategy in a different way.
Case law seems to be particularly strict when the trade secret holder remains evasive and does not make it clear what the secret information relates to, and how it might amount to a trade secret. This observation also applies to the criminal courts. For example, the correctional court in Leuven ruled that the civil party and the Public Prosecutor’s Office had failed to indicate precisely “which technical data [were] the object of the trade secret in relation to which violation was alleged.”[vi] This imprecision made it much easier to defeat the claim. It was enough for the defendants to show that there was extensive literature on the principles and techniques concerning the technical subject matter to which the alleged trade secrets related for acquittal to follow.[vii]
This requirement for precise identification further implies that it is not sufficient to show that one type of information is secret in order for all of the information at issue to be considered a trade secret. The Antwerp judge in summary proceedings ruled that out of a total of thirty Works Council related documents, only the actual reports of the Works Council had been shown to be secret.[viii] With regard to the other documents leaked by the defendant, the judge ruled that the claimant had failed in its burden of proof.
With regard to this burden of proof, the President of the Dutch-speaking Brussels enterprise court has clarified that the holder of the trade secret does not have to go so far as to provide negative proof[ix] that the secret information invoked was “not generally known to or easily accessible by persons within the circles normally dealing with the type of information concerned.” For the President, it was sufficient that the holder of the alleged trade secret was convincing in their argument that the information was secret. This divided the burden of proof “to a limited extent” in that it was then up to the defendant to show that the information was indeed generally known.[x] In the same case, the defendant attempted to rebut the secrecy of the company’s information by claiming that he could reconstruct it from memory or based on publicly available information. However, the court found this to be irrelevant, pointing out that the personal knowledge and experience of the alleged infringer cannot negate the secrecy of a trade secret.[xi] An example of an even heavier burden of proof on the defendant can be found in the above-mentioned case before the Antwerp enterprise court. In that case, the defendant was expected to show that he had himself provided the claimant with the alleged secret know-how concerning the claimant’s production lines.[xii]
Case law seems to show a greater inclination to share the burden of proof in a way that makes it more difficult for the defense, when the alleged infringer has committed acts that are in conflict with a subsequent defense that the information was publicly available. For example, in the above-mentioned case before the President of the Dutch-speaking Brussels enterprise court, the defendant had implicitly acknowledged the secret nature of the claimant’s alleged secret know-how in correspondence, and the court found this particularly relevant when rejecting the defendant’s counterarguments.[xiii] In a matter before the Ghent enterprise court, the defendant was unable to convince the judge that the alleged secret information had been memorized by him and was also freely available on the internet, because it appeared from the facts that the defendant had drawn the information directly from a database belonging to the claimant and had then stored it in a private folder.[xiv] The court felt that this copying and storing of the information by the defendant disproved its defense – no copy of the information would have been necessary if the information had actually been publicly available or memorized by the defendant.
Other aspects of the burden of proof will be discussed in a subsequent post.
[i] Art. 578 Belgian Judicial Code.
[ii] Art. 565, 8° in conjunction with 566 Belgian Judicial Code.
[iii] Orb. Brussels (Fr.) October 31, 2019, Ing.-Cons. 2019, no. 4, 657.
[iv] However, “labeling” information as “confidential” seems to be accepted as a standard reasonable measure to keep that information secret in accordance with the third requirement of Art. I.17/1, 1° Belgian Judicial Code – see in this regard question 6 below with reference to Orb. Brussels (Nl) 12 March 2020, ICIP 2020/2, 565.
[v] Obv. Orb. Antwerp October 16, 2019, IRDI 2020, vol. 1, 109.
[vi] Corr. Leuven November 12, 2019, unpublished, 14.
[viii] Vz. Rb. Antwerp 26 March 2020, AR 20/19/C, unpublished.
[ix] Orb. Brussels (Nl) 12 March 2020, ICIP 2020/2, 574.
[xi] Op. cit. , 576.
[xii] Orb. Antwerp May 9, 2019, TBH RDC 2020/3, 392.
[xiii] Orb. Brussels (Nl) 12 March 2020, ICIP 2020/2, 575, para. 12.
[xiv] Orb. Ghent 24 June 2020, AR A/19/03789, NV Entaco v. Comm. V O.F.P.-Chemicals, unpublished.