A Comparative Study of US and EU Approaches
New Horizons in Competition Law and Economics series
Chapter 4: Trade secrets and antitrust: an example of the conflicting US and EU approaches
* Application of antitrust rules to trade secrets in the EU and in the United States is the best example of the divergences in the treatment of IP-related market distortions in the two jurisdictions. Both in the US and in the EU, trade secrets are regulated predominantly at the state or national level and ‘federal’ antitrust rules trump inconsistent trade secret laws. Yet, whereas the US antitrust authorities treat trade secrets with the same deference as IP rights, the position of their EU counterparts is that trade secrets do not deserve the same level of protection as other forms of IP. The differences in the treatment of trade secrets merit a closer look, as they are a very good example of applying antitrust rules in a manner that affects substantive standards for IP protection. The decisions in which the European Commission has applied competition law to trade secrets have shaped the standards of trade secret protection in the European Union. The Commission has adopted a definition of what constitutes protectable know-how, decided what the acceptable means of its exploitation are, and asserted that trade secrets are not IP. In doing so, it was concerned predominantly with the need to ensure free competition and less with the need to secure the rights of the companies in their know-how. This process, which effectively led to the establishment of trade secret standards for the purpose of application of EU competition law, was erratic and marked by decisions that ignored the standards of trade secret...