Trade Secret Protection in Denmark

Trade secrets are not only a tool to protect existing interests, but also a seed that nurtures innovation. It is the keeping of creative ideas and unique inventions that has created a strong motivation for businesses to constantly research, develop and improve their competitiveness. As a result, the market is always enriched by new products and services, meeting the diverse needs of consumers. Viet An Law would like to guide customers on how to protect trade secrets in Denmark through the article below.

Basics of Business Secrets in Denmark

The concept of trade secrets

Denmark applies a trade secret protection regime in accordance with the European Union’s Trade Secrets Directive. This is embodied in the country’s Trade Secrets Act. This act sets out a clear legal framework to protect confidential business information. Specifically, according to Danish law, trade secrets are information that businesses hold, meeting all three criteria:

• Confidentiality: The information is not publicly available and is not easily accessible to outsiders.
• Commercial value: Information that has the potential to bring economic benefits to the business, whether now or in the future.
• Protection measures: Businesses have taken reasonable measures to keep such information confidential.

Some examples of business secrets in Denmark

• Pharmaceutical industry: Drug formulations, manufacturing processes, and clinical research results are all valuable business secrets.
• Biotechnology: Gene technologies, genetically modified microorganisms, biomass production processes, etc. are also strictly protected.
• Renewable energy: Technologies such as wind energy, solar energy, battery technology, etc. is often considered a trade secret.
• Food: Processing recipes, organic food production processes, functional foods, etc. are also sensitive information.
• Information technology: Algorithms, software, mobile applications, security systems, etc. are all important intellectual assets that need to be protected.

Some measures to protect trade secrets in Denmark

Just like other member states of the European Union, in order to protect trade secrets under Danish law, businesses must take reasonable measures to ensure that confidential information is kept confidential at all times. These measures typically include:

Internal administrative measures

In order to effectively protect business secrets, enterprises need to build a comprehensive information security management system, including:

• Develop a clear privacy policy:
  • Scope of Application: Applies to all individuals involved in confidential information, including employees, partners, and suppliers.
  • Detailed definition: Clearly define the types of information of the enterprise that are considered business secrets, such as production formulas to customer data.
  • Process-specific: Establish clear workflows for the collection, storage, sharing, and processing of confidential information.
  • Assignment of responsibilities: Clearly assign the responsibilities of each department and individual in information protection.
• Awareness training:
  • Periodic training: Organize regular training courses to update the knowledge of information security for all employees.
  • Training on Threatened Trade Secrets: Includes knowledge on threat identification, how to prevent information leaks, and how to handle security incidents.
• Strict Access Control:
  • Decentralize access: Give access only to those who really need it.
  • Multi-factor authentication: Apply strong authentication measures such as passwords, OTP codes, fingerprints,…
• Continuous Monitoring and Evaluation:
  • System Audits: Perform periodic security system audits to detect and remediate vulnerabilities.
  • Effectiveness Assessment: Evaluate the effectiveness of security measures and make timely adjustments.

Legal measures

In order to effectively protect business secrets, enterprises need to build a separate legal protection system for enterprises, including:

• Non-Disclosure Agreement (NDA):
  • Clear definition: Specify what information is considered confidential and what is confidential.
  • Commitment to confidentiality: Stakeholders commit to keeping information confidential throughout the cooperation process and after the contract ends.
  • Consequences of violations: Clearly stipulate sanctions against violators, including legal measures.
• Confidentiality clause in the contract:
  • For employees: Add a confidentiality clause to the employment contract to bind employees not to disclose confidential company information.
  • For partners and suppliers: Add confidentiality clauses to cooperation contracts to ensure that information is not leaked.

Technical measures

To effectively protect trade secrets in the digital age, the application of modern security technologies is paramount. Some effective technical solutions include:

• Data encryption: Converts sensitive data into hard-to-read code, which can only be decrypted by authorized persons.
• Multi-factor authentication: Enhance security by requiring users to provide various layers of authentication, such as passwords, OTP codes, fingerprints.
• Firewall: Provides a solid layer of protection, preventing external attacks on the internal network.
• Intrusion Detection System (IDS): Detects and warns of abnormal activities early, helping to prevent cyber attacks.
• Data loss prevention (DLP) system: Strictly control data access and sharing, preventing the leakage of important information.
• Data backup and recovery: Protect data from loss due to unexpected incidents, ensuring data recovery when necessary.
• Access management: Restrict access to systems and data to only authorized people, ensuring security.