New Law on Protection of Business Secrets

10.06.2021.

The National Assembly of the Republic of Serbia adopted a new Law on the Protection of Business Secrets (“Official Gazette of the RS”, No. 53/2021), which entered into force on June 5, 2021 (hereinafter: the “Law“). The Law harmonizes, among other things, the system of protection of business secrets with the relevant regulations of the European Union. As stated in the explanation of the Law, the new Law should deter competition from illegal acquisition, use and disclosure of business secrets.

The Law provides a clear definition of what information can be considered a business secret and what conditions must be met in order to be considered a business secret and as such be protected by law. It also regulates the conditions under which the acquisition, use and disclosure of a trade secret is considered legal, and the conditions under which it is considered illegal.

A business secret in the broadest sense is any confidential business information that has market value because it is a secret, and which provides a natural or legal person with an advantage over the competition and for which the person who possesses it takes reasonable measures to maintain secrecy.

Also, the Law specifies what is considered legal and what is illegal in obtaining, using and disclosing a business secret. Thus, obtaining a business secret is considered legal if the trade secret was obtained in one of the following ways:

  • by independent discovery or creation;
  • by observing, studying, disassembling or testing a product or object that has been made available to the public or that is legally held by the information acquirer (reverse engineering) who is not bound by a legally binding obligation of restriction of acquiring of business secret or prohibition of performing reverse engineering;
  • by exercising the right of employees or employee representatives to information and consultation in accordance with special regulations;
  • by another action that is in accordance with good business practice in the circumstances of the particular case.

One of the novelties brought by this Law is that, in addition to legal entities and responsible persons, entrepreneurs and natural persons who illegally obtain, use or disclose business secrets will be punished in them from now on. Thus, if it is an economic crime, the fines are from 50,000 to 3,000,000 dinars, and if it is a misdemeanor, the fines are from 20,000 to 500,000 dinars.

The new law also introduces an extension of the deadline for filing a lawsuit for breach of business secret – thus, a lawsuit for breach of business secret can be filed within one year from the day when the plaintiff learned of the violation and the person suspected of violating business secret ( subjective deadline), and no later than within five years from the day of the violation or from the day of the last violation if the violation is committed continuously (objective deadline). The fact that the lawsuit procedure is urgent contributes to the efficiency of the protection of business secrets.

In this way, the legislator has set all the legal grounds for the protection of business secrets, and companies are obliged to harmonize their general acts with the applicable regulations in order to exercise their rights in the best possible way in eventual court proceedings.

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