Legislative Framework Governing Trade Secrets in Malta

The recent legislative changes in Malta have simplified procedure for registering sensitive trade data, providing both domestic and non-domestic businesses with an opportunity to take advantage of more effective data protection regulations.

To be qualified as sensitive, information must meet the following criteria:

• it should not be known or available to the general public (either entirely or fragmentarily), nor persons handling mattres related to the said information;
• it should be commercially valuable;
• it has been exposed to measures of reasonable character by individuals entrusted with ensuring its confidentiality.

Hence, business organizations should apply an internal fluctuation test to understand if their data is duly protected. Achieving sufficient data protection standards depends on the businesses’ ability to their NDA clearly defines which data cannot be disclosed. Including a a special clause indicating that, where necessary, classified information can be returned to its owner or disposed of is also important. 

Need to protect objects of intellectual property in Malta? Our highly qualified lawyers will be more than happy to help you with all matters pertaining to protection of commercial secrets in Malta.

Another way consists in registering access rights and other measures of technical monitoring. Business organizations should keep in mind that the said steps need to ensure sufficient confidentiality, which is why they need to be carefully considered.

Responsibility of 3rd Parties With Relation to Trade Secrets

As per amended legislation, the term “contradictory to generally accepted practices of conducting business” is now defined is now applicable to any actions constituting violation of contract, including receiving sensitive data from 3rd parties that were aware or grossly negligent of the fact that the said actions could be regarded as acquisition.

The above definition involves the “breach of trust” term, which probably stems from English legal system. Legislative amendments in Malta, however, resulted in the concept that responsibility could also lie with those who intentionally acquired undisclosed information by resorting to unfair commercial practices, or have been grossly negligent regarding their unawareness that the said practices were resorted to.

Given how “awareness” or “being grossly negligent with regard to one’s unawareness” are interpreted, it can be concluded that 3rd parties who were unaware of or were not able to be aware of the said data being acquired illegally shall bear no responsibility.

Individuals seeking to protect sensitive trade-related data should remember that under amended legislation obtainment of trade-related secrets without securing consent of their owner shall be deemed illegal under these circumstances:

• if it has been obtained without proper authorization (e.g. by copying electronic or documentary materials which constitute the property of the owner of trade-related secrets);
• if it is obtained through any other actions which contradict fair business practices.

Obtainment, usage & divulgement of trade-related sensitive data also constitute an offence if the perpetrator was aware or should have been aware of the fact that the said data was obtained from individuals that made use of it for the purpose of divulging sensitive data.

There can be many more interpretations of trade-related secrets in the future, which is why business organizations should:

• implement NDAs;
• clearly define measures for ensuring confidentiality of information that they believe constitute commercial secret;
• make individuals with access to commercial secrets responsible for keeping it secret 

Need legal advice on regulation of trade-related secrets in the state of Malta? We can give you a hand with registering, acquiring & using trade-related secrets.