Trade secrets law will protect journalists

Journalists are expected to be protected by a new law that will transpose the EU’s Trade Secrets Directive, currently tabled in the Maltese parliament.

Originally the directive’s first draft was heavily opposed by journalists’ organisations, fearing large data leaks, such as the Panama Papers or MaltaFiles, could be prevented under threat of punishing holders of that data, such as journalists.

But changes to the draft directive in the European Parliament have now ensured that national laws – Malta’s included – will include full protection for journalists who could end up holding so-called “trade secrets”.

Described as secret information of commercial value that is not generally known “to persons within the circles that normally deal with the kind of information in question”, the law is intended at safeguarding researchers and inventors.

However, such information could include commercial data such as customer or client lists, marketing studies or pricing structures, or technical information such as a manufacturing process or software data – the kind of information that can also land in journalists’ hands – such as the Panama Papers’ cache of emails and customer files.

Indeed, the proposed law defines the unlawful acquisition of a trade secret as when it takes place without consent of the trade secret holder, through unauthorised access or copying of documents and electronic files.

Additionally, trade secrets communicated in breach of contract or confidentiality agreements will also be deemed unlawful.

This opens up the question as to how such information received by journalists or whistleblowers is to be treated.

Under the proposed Bill, any civil action for breach of the law will not be possible if the alleged acquisition or use of such trade secrets is carried out “in exercising the right to freedom of expression” as guaranteed under various European human rights conventions and the Maltese Constitution.

Additionally, revealing trade secrets will not be punishable if they reveal “misconduct, wrongdoing or illegal activity”, disclosure by workers and unions or by employees under the provisions of the Whistleblower Act.

The European Commission is adamant that the new laws will not harm journalists in the course of their duties.

Trade-secrets holders will not have the right to redress if their trade secrets are acquired, used or disclosed to exercise the right to freedom of expression and information to reveal misconduct or other illegal activities in order to protect the general public interest

“Journalists will remain free to investigate and publish news on companies’ practices and business affairs, as they are today. The Directive only deals with unlawful conduct by which someone acquires or discloses – without authorisation and through illicit means – information with commercial value that companies treat as confidential, in order to keep a competitive advantage over their competitors. If no unlawful conduct takes place, the relevant disclosure of the trade secret is out of scope of the Directive and therefore not affected by it.”

Trade-secrets holders will not have the right to redress if their trade secrets are acquired, used or disclosed to exercise the right to freedom of expression and information to reveal misconduct or other illegal activities in order to protect the general public interest – for example environmental protection – or for any other legitimate interest recognised by EU or national law.

The Maltese courts will be granted the power to issue precautionary acts against alleged infringers of trade secrets, by prohibiting the disclosure of trade secrets, if the court believes they are indeed “trade secrets” as laid down by the law.

Infringers face up to a €150,000 penalty for infringing the trade secrets law, although the courts will take into consideration whether the infringer was aware that the trade secret obtained from another person was being held unlawfully, and whether any such punitive measures would cause the infringer disproportionate harm.​