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Bulgaria: transposition of Directive on protection of trade secrets into national law

Trade secrets now enjoy special protection under the newly-adopted Protection of Trade secrets Act (“the Act”) which belatedly transposed the respective EU Directive. The Act provides for effective measures so as to enable trade secret holders to protect such types of information as one of their most valuable intangible assets.

First and foremost, the Act sets forth a definion of “trade secret” and the requirements that must be cumulatively fulfilled for a trade secret to be established. So far, the notion of trade secret was addressed in the Protection of Competition Act but it lacked clarity and comprehensiveness. Now the three pillars of this definition are clearer: first, the information must be secret, meaning it is not generally known or readily accessible to certain circles of persons; second, it has commercial value because of its secrecy; and third, the lawful holders of the information must have undertaken reasonable steps to keep it secret. The burden of proof rests upon the trade secret holder to submit evidence as to the existence of a trade secret. Further, the Act elaborates on the concepts of lawful and unlawful acquisition, use and disclosure of trade secrets as well as on the exceptions where obtaining, using and disclosing trade secrets will not be considered illegal.

Needless to say, trade secret holders may seek compensation for losses suffered and profits lost that are a direct and immediate result of unlawful acquisition, use or disclosure of the trade secret. The infringer will be held liable if he/she knew or ought to have known that he/she was engaging in such illegal activities. The court will also take into consideration non-pecuniary damages suffered by the trade secret holder. This is definitely a new concept for Bulgarian law, given that until now legal entities were not recognised as being entitled to claim compensation for non-economic damages (aside from a few recent court decisions which awarded damages for reputational losses incurred by entities). The limitation period for filing an action is 5 years as from the occurrence of infringement.

In addition, certain provisional and precautionary measures might be requested by the claimant such as cessation of or prohibition of use or disclosure of the trade secret; prohibition of producing, offering, placing on the market or using infringing goods, or the importation, export or storage of infringing goods for those purposes; seizure or delivery up of suspected infringing goods, including imported goods, so as to prevent their entry into, or circulation on, the market; including prohibition on offering and rendering services favourably affected by trade secrets unlawfully acquired and used. These measures can also be imposed by the court in a decision on the merits of the case together with a ruling for dissemination of information on the decision by publishing it at the expense of the infringer.

The new rules for protection of trade secrets are undoubtedly long-awaited and needed by companies in Bulgaria. It remains to be seen how the courts will interpret the new provisions and how trade secret holders will benefit from the mechanisms for protecting sensitive business information.

Source: Protection of Trade Secrets Act (Promulgated in State Gazette issue No 28 of 05.04.2019); Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure.