Commercial confidentiality and PSI

Razvan Dinca

University of Bucharest

Legal framework

Article 1, paragraph 2, letter c, second line of the Directive 2003/98/CE:

this directive shall not apply to documents which are excluded from access by virtue of the access regimes in the Member States, including on the grounds of statistical or commercial confidentiality

Legal frameworkarticle 39.2 of TRIPs Agreement

Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices10, so long as such information:

(a) 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;

(b) has commercial value because it is secret; and

(c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

Interests involved

• Market development

– stimulate the holder in producing incremental technological information information

– stimulate third parties to disseminate it by reverse engineering

– develop competition

Interests involved

• Participative democracy

when, by the way of exception, it is established that keeping the information secret would adversely affect a specific legitimate public interest, the disclosure of the information might be mandated in order to protect the said interest, providing that the use of this information by third parties is restricted in order to protect the legitimate (private) interest of the originators

Subjects

• Producers and holders of trade secrets

• Reusers (free riders?)

• PSBs

Interests protected under current legal framework

• Reuse restrictions• Access restrictions• Rather than creating added value as for other

kinds of PSI, the free access for reuse of the confidential PSI will destroy the economic value of that information because such value is essentially derived from its confidential nature.

• The economic value of the information may be artificially maintained only if the disclosure is accompanied by a market exclusivity which prevents the reuse competing the originator

Maintaining the current perspective

“this directive shall not apply to documents which are excluded from access by virtue of the access regimes in the Member States, including on the grounds of statistical or commercial confidentiality”

- Legal arguments- Comparative arguments- Economic arguments

The real problem

• is for the PSB to identify which of the information reached under its control is of such a confidential nature that it is entitled to refuse third parties’ access to it for the purposes of reuse

Good practices to identify and protect the PSI under commercial secrecy

• initial classification of the information made by the holder

• second classification made by the PSB• an application for reuse of an information

of a certain confidential nature should be dismissed

• An application for reuse of an information of a potential confidential nature should give rise to a quasi-jurisdictional procedure between the applicant for reuse and the originator

Good practices to identify and protect the PSI under commercial secrecy

• The decision of the administrative body in favor of one party should be notified to the other party

• The interested party may challenge the decision within a short term

• The challenge will suspend the effects of a decision to grant access to information

• The challenges against the decision should finally settle by the court

• the exercise of right to defense cannot breach the interests of the originator to maintain the confidential nature of the information

• An exception from the rule of the marginal cost of dissemination may be justified for availing information of a potential confidential nature

Arguments in favor

• long periods of adaptation of those good practices to the local bureaucratic environment

• premises for harmonization at European level

• prevents an arbitrary injunction in the legitimate interest to business secrecy

• prevents excessive obstacle to re-use falsely grounded on commercial secrecy

Arguments in favor

• national criteria in qualifying a trade secret are not affected

• the jurisdictional control may be integrated in larger systems of control

• the suspension of effects of a decision to grant access to information during the jurisdictional control prevents the irreparable harm for the originator

• the primary effort to preserve the confidential nature belongs to the originator

• the costs of the system meant to prevent excessive limitation of re-use are allocated to the re-users

Arguments against

• no strict normative value • complexity and management costs • long duration of the jurisdictional procedure of

releasing the information of a potential confidential nature

• the attribution of costs might disincentive the re-users

Still, this seems to be the best option possible.

Thank you.

Razvan Dinca

University of Bucharest