The Directive defines a trade secret as information that:

The definition is much wider than what has been generally understood to constitute a trade secret in the UK, and includes confidential information.

The acts that the Directive seeks to prohibit are the unlawful acquisition, disclosure or use of a trade secret. Under Article 4, this includes: the acquisition of a trade secret through unlawful access to materials, or other conduct which is contrary to "honest commercial practices" (although this term is not defined); the use or disclosure of a trade secret where this would breach any contractual or other duty, or where the trade secret was acquired unlawfully; and the exploitation of goods produced using the trade secret where the user knew or ought to have known that the trade secret was acquired unlawfully.

The Directive was widely criticised during its gestation. Many commentators noted that a perceived level of ambiguity in the Directive could enable employees to take with them to a new employer certain trade secrets of a former employer, if they can argue that the information forms part of the experience and skills that were acquired during their employment. Fraser Younson, consultant solicitor at Keystone Law, comments: "Although UK common law already permits employees to take their skills and experience with them to a new employer, the wider definition of a trade secret would seem to expand what is, in effect, meant by skill and experience beyond its current narrow ambit."

However, according to Ian Karet, a partner at Linklaters LLP, much of the previous ambiguity in the Directive has now been resolved: "The Directive now says that it does not ‘offer any ground’ for limiting employees’ use of information that is either not a trade secret, or which comprises the ‘experience and skills honestly acquired in the normal course of their employment’. There is still some concern that this may expand an employee’s rights to take information with them on leaving a job. However, it seems more likely that the intention was to leave questions of employee mobility to be decided under national law."

Other criticisms relate to the fact that the Directive could conceivably give companies the means to sue and receive compensation from whistleblowers who reveal business-related information in the public interest. Similarly, others have focused on the fact that the Directive may inadvertently catch journalists, preventing them from publishing information that companies consider to be secret, and so potentially curbing media freedom with regard to investigations and the protection of sources. Indeed, there have been claims that the Directive could, in theory, have been used to criminalise the disclosure, or subsequent use, of the information in the Panama papers as Mossack Fonseca, the law firm from which the confidential information was stolen, would have had additional grounds of redress (see News brief "Panama papers: time to firm up on cyber security?").

The European Parliament argued for a number of measures in order to address these concerns. In the Directive, there are clarifying statements included in the recitals, in particular at recital 19 (press freedom) and 11 (whistleblowers).

Article 5 backs up these statements and specifically provides exceptions where the trade secret is acquired, used or disclosed: for the purpose of exercising the right to freedom of expression and information as set out in the Charter of Fundamental Rights of the EU, including respect for the freedom and pluralism of the media; for revealing misconduct, wrongdoing or illegal activity, provided that the act was for the purpose of protecting the general public interest; disclosure by workers to their representatives as part of the legitimate exercise by those representatives of their functions in accordance with EU or national law, provided that the disclosure was necessary for that exercise; and for the purpose of protecting a legitimate interest recognised by EU or national law. Younson explains that this is much wider than protected disclosures under the UK’s current whistleblowing laws, and says that it is not difficult to foresee individuals trying to shoehorn their activities into one of these exceptions.

But despite these amendments, there remains disquiet about possible ambiguity in the text of the Directive and its potential to be exploited by businesses to the detriment of workers and the wider public interest. Karet’s view is that while it is possible that the European Court of Justice may decide that former employees can use more information under the Directive than under English law, this seems unlikely.

"The express aim of the Directive is to encourage investment in innovation in the EU and increase the competitiveness of the EU economy," Karet says. "This is a long-held European wish, and we would expect the court to understand that. It is also, for the most part, a minimally harmonising measure, allowing EU members states to provide for more far-reaching protections. So, it is unlikely that the implementation of the Directive will result in reduced protection for confidential information in any member state, including the UK. Balancing that, it is very unlikely that the Directive is going to be used to limit workers’ rights."

Member states now have until 9 June 2018 to transpose the Directive into their national laws, although the outcome of the UK’s EU referendum may yet mean that UK businesses receive limited benefit from the Directive. Even so, as Ian Karet explains, because the law of confidential information in the UK is well developed and works, the changes the Directive would bring are mainly form over substance. "So, if there is a Brexit, UK businesses are unlikely to be disadvantaged by its absence" he says. "While implementation across the rest of the EU may give some comfort to UK businesses intending to share or exploit their confidential information across the EU, we would expect any well-advised business to bolster its statutory protections with non-disclosure agreements in any event."

In Younson’s view, it would be in the UK’s interests, whether or not it remains in the EU, to have a common platform across one of its main trading geographical areas to protect confidential information and trade secrets. So it may well be that, even in the event of Brexit, the UK decides to adopt laws similar to the new Directive in the same way that Switzerland currently does.

"The Directive does contain an element dealing with the protection of confidential information during litigation," he says. "The UK currently ticks most of the boxes here anyway. The key issues for change relate to the definition of confidential information and the exception where disclosure is permitted."