A trade secret protection across the EU is set up by the Directive (EU) 2016/943 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure. The new Bulgarian Trade Secret Protection Act transposes the requirements of the EU Trade Secret Directive and supplements the existing legal remedies under the Bulgarian Protection of Competition Act.

The Bulgarian Trade Secret Protection Act establish the terms and procedure for protection against unlawful acquisition, use and disclosure of trade secrets provided in judicial proceedings in civil cases.

The Bulgarian Protection of Competition Act provides that the trade secrets holder can file a complaint before the Commission for Protection of Competition in the event of any disclosure of information specified as production, trade or other protected secret, in violation of the good faith commercial practice. The Commission carries out investigations and imposes fines or pecuniary sanctions.

In addition, the Bulgarian Commercial Act imposes an obligation to procurators, agents, sales representatives, shop assistants and brokers to protect the trade secrets and the goodwill of the persons who have commissioned them to perform particular work. For non-execution of this obligation they bear liability under the Trade Secret Protection Act.

According to the Bulgarian Trade Secret Protection Act trade secret means any commercial information, know-how and technological information which meets all of the following requirements:
  1. it is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
  2. it has commercial value because it is secret;
  3. it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

This means that the companies must now actively take reasonable steps to keep information secret. If they fail to do so, they lose their right to bring an action to the court against data thieves and corporate spies.

The Bulgarian Trade Secret Protection Act ensures protection against not only infringing goods but also services, the characteristics and the manner of provision of which significantly benefits from trade secrets unlawfully acquired, used or disclosed.

The acquisition of a trade secret without the consent of the trade secret holder is considered unlawful, whenever carried out by:
  • unauthorised access to, appropriation of, or copying of any documents, objects, materials, substances or electronic files, lawfully under the control of the trade secret holder, containing the trade secret or from which the trade secret can be deduced;
  • any other conduct which is considered contrary to honest commercial practices.
As well, the use or disclosure of a trade secret is considered unlawful whenever carried out, without the consent of the trade secret holder, by a person who:
  • has acquired the trade secret unlawfully;
  • has been in breach of a confidentiality agreement or any other duty not to disclose the trade secret; or
  • has been in breach of a duty to limit the use of the trade secret.

The acquisition, use or disclosure of a trade secret shall also be considered unlawful whenever a person, at the time of the acquisition, use or disclosure, knew or ought, under the circumstances, to have known that the trade secret had been obtained directly or indirectly from another person who was using or disclosing the trade secret unlawfully.

The trade secret holder have the right to bring an action to the court against any infringer of the trade secret in order to establish the unlawful acquisition, use or disclosure of a trade secret.

The trade secret holder may also bring an action to the court for:
  1. award of indemnity for the damages suffered and benefits foregone;
  2. the cessation of or, as the case may be, the prohibition of the use or disclosure of the trade secret;
  3. the prohibition of the production, offering, placing on the market or use of infringing goods, or the importation, export or storage of infringing goods for those purposes;
  4. the destruction of all or parts of documents, items, materials, substances or electronic documents that contain or bear the trade secret or, where appropriate, their delivery to the applicant;
  5. the prohibition of offering or providing services which significantly benefit from trade secrets unlawfully acquired, used or disclosed.
The claims for trade secret infringements shall be extinguished upon the expiration of a 5 years limitation period. The limitation period begins to run from the commission of the infringement.

The infringer shall indemnify the trade secret holder for any damages suffered and benefits foregone, which arise as a direct and immediate consequence of the unlawful acquisition, use or disclosure of a trade secret. The compensation shall be due when the infringer knew or ought to have known that he, she or it was engaging in unlawful acquisition, use or disclosure of a trade secret.

The employees are responsible for the damages as a result of their unlawful acquisition, use or disclosure of a trade secret in an amount not exceeding the triple amount of their remuneration, where they act without intent.

To determine the amount of the compensation the court takes into consideration:
  • the damages, including lost profits, which the trade secret holder has suffered;
  • any unfair profits made by the infringer as a result of the unlawful acquisition, use or disclosure of the trade secret;
  • the moral prejudice caused to the trade secret holder, where applicable.

If there is not sufficient data of the amount, the court awards a compensation of no less than the amount of the royalties which would have been due had the infringer requested authorisation to use the trade secret in question, including the costs for identification and investigation.

A person could have originally acquired a trade secret in good faith, but only become aware at a later stage, including upon notice served by the original trade secret holder, that that person’s knowledge of the trade secret in question derived from sources using or disclosing the relevant trade secret in an unlawful manner. In this case the amount of the compensation shall not exceed the amount of royalties or fees which would have been due, had that person requested authorisation to use the trade secret in question, for the period of time for which use of the trade secret could have been prohibited.

Last but not least, the trade secret holder has wider possibilities to request interim measures from the court.

The court may impose the following interim measures:
  • the cessation of or the prohibition of the use or disclosure of the trade secret;
  • the prohibition of the production, offering, placing on the market or use of infringing goods, or the importation, export or storage of infringing goods for those purposes;
  • the seizure and delivery up of the suspected infringing goods, including where they are imported by third parties, so as to prevent their entry into, or circulation on, the market;
  • the prohibition of offering or providing services which significantly benefit from trade secrets unlawfully acquired, used or disclosed.

For more information or preparation of NDAs, specific terms of confidentiality within employment/business cooperation agreements, licence agreements and know-how contracts, please do not hesitate to contact us by e-mail: office@kgmp-legal.com or call us on: +359 2 851 72 59.


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