23. Does the new data access right affect the protection of trade secrets?

The Data Act provides a framework that balances data sharing with the need to preserve the protected nature of the data (including with respect to the protection of trade secrets, whose confidentiality continues to be ensured). The Data Act does not modify the applicable legal protections (including the 2016 Trade Secrets Directive, which already provides a legal framework for the protection of trade secrets). However, a data holder can unilaterally determine which data are trade secrets, so the claim that certain data are trade secrets is not enough to prevent the exercise of the data access rights provided by the Data Act. This does not mean that the Data Act leads to the forfeiture of trade secret protection. Rather, it carefully balances the need to prevent illegitimate restrictions on the user’s new data access rights against the need to uphold the legal protection provided to trade secrets. The data holder therefore has the right, prior to disclosure, to require users and third parties to preserve the confidentiality and secrecy of the trade secret encumbered data by agreeing to and implementing safeguards necessary to that end. As an additional layer of protection, the Data Act introduces a new mechanism (commonly known as the ‘trade secrets handbrake’) that frames the conditions under which a data holder can withhold, suspend or, exceptionally, refuse to share data. How can data holders handle trade secrets and activate the ‘trade secrets handbrake’? When a data holder receives a request to access data, it must identify the trade secrets that need to be shared and agree with the user/third party on the necessary measures to preserve their confidentiality (Articles 4(6) and 5(7) of the Data Act). These safeguards need to be in place prior to the sharing of data. Possible measures could include model contractual terms, confidentiality agreements, strict access protocols, technical standards and the application of codes of conduct.

The data holder may withhold or suspend the sharing of trade secrets if there is no agreement, if the user or third party does not implement the agreed measures, or if the confidentiality of the trade secrets is undermined (Articles 4(7) and 5(10) of the Data Act). In exceptional circumstances, the data holder may refuse to share trade secrets if it can demonstrate, on the basis of objective evidence, that it is highly likely that serious economic damage would result from the disclosure of trade secrets (Articles 4(8) and 5(11) of the Data Act). ‘Serious economic damage’ means serious and irreparable economic loss. Such decisions need to be made on a case-bycase basis. If the data holder considers that it must withhold, suspend, or refuse to share data, it must notify the competent authority of the respective Member State, and communicate the reasoning behind the decision to the user or third party without undue delay. The user or third party can seek redress and challenge the data holder’s decision before a court or tribunal of a Member State or agree with the data holder to refer the matter to a dispute settlement body. The user or third party can also lodge a complaint with the competent authority. The competent authority should, without undue delay, decide whether and under which conditions data sharing should start or resume (Articles 4(9) and 5(12) of the Data Act).