Legislative framework and key mechanisms The statutory protection of trade secrets in Bulgaria is guaranteed by the Protection of Competition Act (ЗЗК) and the Protection of Trade Secrets Act (ЗЗТТ). Under them, the holder of a trade secret is entitled to protection against the unlawful acquisition, use or disclosure of confidential information by any infringer. The Commission for Protection of Competition establishes the infringement and may impose administrative sanctions, but only the court may award compensation to the injured party.
What constitutes a trade secret? A trade secret encompasses any commercial information, know-how or technological information which is:
- Not generally known – it is not publicly available in its precise configuration or assembly.
- Of value – it has commercial value because of its secret character.
- Protected by confidentiality measures – it is controlled through measures to preserve its secrecy.
Examples of trade secrets include pricing strategies, terms for preferences and discounts, information on contracts and transactions, customer databases, development plans and product concepts.
Protection of a Trade Secret Through Confidentiality Measures
The mere existence of confidentiality agreements or confidentiality clauses in contracts does not in itself guarantee the protection of a trade secret. It is necessary that specific measures be introduced, such as:
- Restricting access to the information through controlled user rights.
- A list of the persons who have access to the confidential information, regardless of whether it is stored on paper or on electronic media.
The holder of a trade secret is any natural or legal person who lawfully controls that information.
Forms of Infringement of a Trade Secret
Unlawful acquisition: Obtaining a trade secret without the consent of its holder, through unauthorised access to, or appropriation of, documents and materials containing commercial information.
Unlawful use or disclosure: The use or disclosure of a trade secret by a person who has acquired it unlawfully or has breached a confidentiality agreement.
Unlawful conduct: The acquisition, use or disclosure of a trade secret in breach of honest commercial practice, including obtaining it directly or indirectly from another person.
Judicial Protection of a Trade Secret
The holder of a trade secret may bring a claim before the court for:
- Establishing the infringement – proving the unlawful acquisition, use or disclosure of the trade secret.
- An award of compensation for the damage caused and the lost profits.
- A prohibition on the production or distribution of goods or services affected by the unlawful disclosure of a trade secret.
- The seizure or destruction of documents and materials containing the trade secret.
The limitation period for bringing claims is five years from the date of the infringement. The holder of a trade secret may request the imposition of interim measures, such as a prohibition on the production or distribution of the products that are the subject of the infringement.
Compensation for Damage and the Liability of Employees
The infringer is obliged to compensate the holder of the trade secret for the damage and lost profits where the infringer knew or ought to have known of the unlawful use of the trade secret. Where the infringement is committed by an employee, the amount of compensation is limited to three times the agreed employment remuneration, unless intentional conduct is proven. Experience and knowledge acquired in good faith are not regarded as a trade secret, and employees are not restricted from using them after leaving their employment.
Should you require a consultation on the protection of your trade secret, or assistance in drafting confidentiality agreements or clauses, contact us by telephone: 0887550706 or by e-mail: [email protected]
