Mills & Reeve: Technology Law Update

Trade secrets are being discussed EU-wide...

Hot on the heels of the Information Commissioner (see below), the European Commission has anounced a public consultation to collect views about how business and research know-how is protected across the EU (perhaps with one eye on a New Year's Resolution). 

About time, some might say.  As the Commission itself has noted, keeping vaulable information secret is often the only or most effective way that businesses have to protect their intellectual property - after all, not every good idea is patentable.  The Commission has picked up concerns regarding the effectiveness of legal protection against the misuse of confidential information, which is currently only regulated at national level (without harmonisation across the EU), and decided to analyse the situation.

Changes to the laws on the protection of confidential information are likely to be highly relevant to the technology sector.  You can follow, and contribute to, this consulation on the Europa website between now and 8 March 2013.

Company director found liable for copyright infringement in Scots law case

The Court of Session in Scotland has found a director personally and jointly liable with his company for infringement of copyright in a music recording (a transcript of the case can be found here). 

The director, Mr Salmon, made copyrighted recordings (of Vivaldi's "four seasons" and the Christmas carol "joy to the world") available for sale or download on his company’s website and licensed the recordings to other websites for resale. He was the company's sole director and shareholder, and the domain name for the company's website was registered in his name.

The copyright owner issued a claim against Mr Salmon personally as well as his company.  In his defence Mr Salmon relied on the well established principal that he had separate legal personality to the company and could not be liable for the company's acts – he failed.  Mr Salmon was held liable as a principal as he was acting not only as a director but also as an individual setting up the website and putting the infringing material on it; he was liable not only for his own acts but also for those of the company on the basis both of procurement of breaches of copyright by the company and of acting in concert with the company for a common purpose.

This case is warning to directors to be careful not to blur the lines between two separate legal entities - the individual's and the company's.