The success of a business largely depends on the degree of its protection against risks associated with the disclosure of information closely related to the types and nature of its entrepreneurial activities.
In the course of business operations, various communications constantly take place—between clients, partners, employers, and employees. Consequently, there are risks of disclosing restricted-access information during such interactions. Moreover, some information is extremely important and valuable, as possessing it enables a business to generate revenue and gain competitive advantages. Therefore, if this information falls into the hands of third parties, the entire business model may be at risk. This is why the protection of trade secrets is one of the key business needs.
One of the ways to safeguard against unfair competitive practices by third parties is to implement a trade secret regime within the company. This will allow the enterprise to utilize the legal mechanisms established by law to protect strategically important information, as well as to hold accountable those who disclose trade secrets and/or confidential information.
WinnerLex Law Firm has years of experience in protecting its clients from unfair anti-competitive actions by third parties, enabling us to achieve expected results and fostering the trust of our clients.
We understand that each client has their own priorities regarding the definition of strategically important information and the list of individuals who should have access, restricted access, or maximum protection against disclosure.
That is why we always apply a personalized approach, tailoring our solutions to meet the specific needs of each client.
The development of measures to protect trade secrets and confidential information includes a wide range of services, among which the following can be highlighted:
- drafting an action plan and justifying its necessity;
- developing internal documentation (trade secret regulations, job descriptions, orders, non-disclosure agreements, etc.) and mechanisms for their implementation within the company;
- amending employment agreements/contracts;
- making changes to the client’s founding documents;
- taking measures to hold employees accountable for disclosing trade secrets;
- filing complaints with the Antimonopoly Committee of Ukraine regarding unfair competition in the form of unlawful collection, disclosure, or use of trade secrets;
- providing legal support in court disputes related to trade secrets and confidential information;
- implementing measures to minimize the risks of trade secret and confidential information disclosure when responding to requests from government authorities and during their inspections.
Practice experience: 19 years
Specialization: litigation support, tax, customs and antitrust practices, agricultural law, IT and M&A
Practice experience: 21 years Specialization: support of economic, civil, labor and administrative disputes, energy
Practice experience: 11 years Specialization: tax, customs and corporate disputes, support of inspections, contractual activities
Practice experience: 6 years
Specialisation: business and civil law, tax and customs practice, corporate law, registration and reorganisation of business
Practice experience: 11 years Specialization: support of economic, civil, labor and administrative disputes, inspections
According to Article 420 of the Civil Code of Ukraine, trade secrets are classified as objects of intellectual property rights. However, commercial information qualifies as a trade secret only if it is officially documented and confirmed by the express will of the company’s director, in compliance with applicable legal requirements.
The following do not constitute trade secrets:
- Founding documents and documents permitting entrepreneurial or business activities (permits, licenses);
- Information contained in all mandatory state reporting forms;
- Data required for verifying the calculation and payment of taxes and other mandatory payments;
- Documents related to tax and mandatory payment settlements;
- Information that, under current legislation, is subject to mandatory disclosure (such as the publication of an issuer’s annual financial statements).
The current Labor Code does not contain provisions that directly impose an obligation on employees to maintain confidentiality regarding information that constitutes trade secrets. This is why it is essential for the company to develop and approve a Trade Secret Regulation, which will be one of the effective steps toward solving the problem of protecting confidential information.
The Trade Secret Regulation should specify:
- A list of information that constitutes a trade secret;
- Rules for accessing information classified as a trade secret;
- Liability for disclosing trade secret information.
The employee must be formally acquainted with the list of information that constitutes a trade secret by signing an acknowledgment. If the employee is unaware of what constitutes a trade secret, they cannot be held liable for disclosing it.
Trade secrets may include information about profit levels and pricing policies; business development plans (business plans); details of concluded or planned contracts; data on counterparties (suppliers and buyers); proprietary inventions, innovative proposals, and technological processes that are not protected by copyright or patent law; proprietary market analysis reports and marketing research.
First and foremost, the employee must be formally acquainted with the Trade Secret Regulation by signing an acknowledgment, where the relevant provisions outlining the types of liability for disclosing trade secrets will be included. As a general rule, depending on specific circumstances (such as the amount of damages caused or the recurrence of the violation), the employee may be subject to disciplinary liability (reprimand, dismissal) and material liability (typically within the amount of one average monthly salary, with larger sums recoverable based on a court decision).
Currently, Article 232 of the Criminal Code provides for criminal liability in the form of a fine for the intentional disclosure of trade secrets without the owner’s consent by a person who became aware of them due to their professional or official duties. This applies if the disclosure was made for personal gain or other personal motives and caused significant damage to the business entity.
