In a recent landmark judgment, the Belgian Supreme Court validated the ex parte sequestration of evidence requested by a trade secrets holder at the domicile of a former employee. A judgment that may imply a significant boost for trade secrets holders, allowing for an actual gathering of evidence and thereby effective enforcement of their rights.
The importance of trade secrets to our day-to-day business is known. Trade secrets can bring value to a company in many ways, say through an improved manufacturing process, secret operating algorithms, user preferences, differentiated price offerings, etc. Seeing that competitive advantage maintained is high on many companies’ priority list.
The relevance of trade secrets is acknowledged also by law, inter alia in the EU Directive 2016/943 on the Protection of Trade Secrets. However, the EU legislator did not foresee in any specific solutions that help in collecting evidence of a trade secrets breach, a notoriously daunting task in practice. In Belgium for instance, as trade secrets are not considered an IP right, they do not enjoy the benefit of the evidence seizure (“saisie description”), a powerful procedure that allows to collect objective evidence of IP infringement by way of a surprise dawn raid by a court-appointed expert. In practice, the unavailability of such means for collecting evidence of trade secrets breach has left certain trade secret holder with either not, or unsuccessfully, enforcing their rights against suspected infringers.
To remedy this issue, trade secret holders in Belgium attempted to secure evidence of wrongdoing through alternative means, for instance through a motion for forced sequestration of the evidence in the hands of a bailiff/expert. But thus far the enforcement of such measure against a party suspected of holding evidence of infringement, in particular if the enforcement occurred at a person’s domicile, had triggered significant push-back considering that the protection of a person’s domicile is a matter of constitutional law in Belgium. In its judgment of January 4, 2024, however, the Supreme Court has now validated the aforementioned approach, finding that courts:
“(…) may, based on an ex parte motion, order the surrender to a sequester of well-defined documents in the possession of a party or a third party, whereby the sequester may be granted permission, if necessary, to enter the domicile or premises where the documents are located, and to take these documents into custody.”
This judgment represents an important step in the fight against illicit access, use or disclosure of trade secrets, an issue that was still too often left scot-free. It is now confirmed that trade secrets holders who have taken steps to protect their trade secrets can file an ex parte motion for sequestration of evidence before the Belgian courts, even if this requires enforcing a measure at a party’s domicile. The prerequisite that the petitioner is required to clearly specify the materials to be sequestrated, is a logical condition in terms considering the need for proportionality and considering the nature of the claim.
In general, businesses are genuinely concerned with protecting their intellectual property assets, including trade secrets. They want to be able to rely on the law in case they are confronted with certain wrongdoing by a third party, including competitors or their (ex-)employees. The availability of such relief has become even more important today, as the modern workplace moves further away from the traditional model of “nine to five” labour at a given physical location, but, instead, extends over multiple devices, time zones, collaborations, and places (incl. the office, a co-working space or, indeed, an employee’s home).
For further information, please contact:
Domien Op de Beeck, Partner, Bird & Bird