Trade secrets exploited by competitor

The Commercial and Maritime High Court has just handed down a decision in a case regarding abuse of trade secrets. The Court found that the Danish company Emco had abused the Finnish company Valmet's trade secrets.
Plesner represented Valmet.

In 2012-2013, Valmet Automation Inc (Valmet) launched a number of devices for chemical analysis. In 2015, EMCO Controls A/S (Emco) hired a number of former Valmet employees. Emco launched a number of devices in 2016 with the same functions as Valmet's products. Emco started developing the products in 2015.
The trial concerned whether in the development of their devices Emco had used Valmet's trade secrets.
The Maritime and Commercial High Court found that Valmet's recipes (algorithms), software and the underlying data set enjoyed protection under the Danish Trade Secrets Act, as they were neither generally known nor available, and as there was no doubt that they were commercially valuable for Valmet. The Maritime and Commercial High Court also found that as required reasonable efforts had been made to keep the information confidential, because Valmet's devices contain technological measures preventing customers and competitors from learning about the recipes and software in Valmet's devices.

Reasonable efforts regarding confidentiality

Having to make reasonable efforts to keep something confidential was implemented into Danish law explicitly with the Danish Trade Secrets Act. The ruling, so far probably the first Danish court decision after the Trade Secrets Act coming into effect, shows that it is up to the holder of the trade secret to prove that this requirement has been met. From the ruling it is clear that the trade secret holder should remember to continuously make efforts to limit access to trade secrets potentially disclosed in products on the market.

Protection of algorithms

The Danish Maritime and Commercial High did not find that Valmet's algorithms enjoyed copyright protection citing that the algorithms constituted ideas or principles. However, the court did find that the algorithms (the recipes) were protected under the Danish Trade Secrets Act. It is clear from the ruling that the holder of an algorithm is not without protection, but instead of copyright, algorithms are protected by the Trade Secrets Act.

Proof of the use of Valmet's trade secrets

The ruling is also interesting in relation to the question of proving the competitor's use of the trade secrets.
Among other things, the Maritime and Commercial High Court noted that the measurement deviations between Valmet and Emco's products were significantly less than what was expected between competing devices developed independently of each other, and that Emco's products contained the same three software bugs as in Valmet's devices.
Emco must now pay 2 million DKK in damages.
Click here to read the ruling (in Danish).

The parties can appeal the decision.

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