Trade secret laws and regulations in Monaco

No.

The Monegasque legislator did not implement a specific set of rules to protect trade secrets. However, the general principles of law, such as classic tortious liability, may be applied in order to implement protective measures.

A recent decision of the Monegasque Court of Appeal defined trade secrets as:

“information whose disclosure to the public, but also the mere transmission to a person other than the one who provided the information, may seriously harm the interests of the latter, which is protected when it is known only by a limited number of persons and when the interests likely to be harmed by the disclosure of the information are objectively worthy of protection” (Court of Appeal, 26 May 2020).

In other words, information is defined as a trade secret when the disclosure of the information harms the interests of the company or its economic security.

There are no specific measures that must be put in place, provided that the information meets the requirements set out in the previously mentioned definition.

Since there is no specific legal regime for trade secrets, nothing prohibits transferring or licensing trade secrets if the “secrets” in question are transferable or licensable.

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Potentially, infringement occurs for any kind of disclosure to a person who is not bound by the trade secret and/or does not lawfully hold protected information.

The general measures provided by the law could be applied to trade secrets.

Article 300-1 of the Civil Procedures Code can be used to gather evidence if there is a legitimate reason to preserve or establish the proof of events on which the solution of a dispute may depend and when the circumstances require that the measure cannot be taken in adversarial proceedings.

As there are no specific legal provisions to protect trade secrets, the ordinary legal rules apply. The trade secret owner may:

• Initiate a summary proceeding on the basis of article 414 of the Civil Code, which provides that in case of urgency, the president of the court of first instance may order all protective or restorative measures that are necessary, either to prevent imminent damage or to put an end to a manifestly unlawful disturbance;
• initiate proceedings on the merits to obtain compensation.

No.

Based on civil liability, the trade secrets holder can claim damages in case of violation of the business secret. These damages would correspond to the loss directly caused by the violation.

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Damages amount to the loss directly caused by the violation. There is no regulation detailing how to calculate such loss and the plaintiff bears the burden of demonstrating the amount of his loss. It could be, for example, the profit margin lost.

Please refer to the answer to Question 7.

Please refer to the answer to Question 7.

As previously mentioned, rules of ordinary law apply. Therefore, the limitation period is five years pursuant to article 2044 of the Civil Code from the date where the plaintiff knows or should have known the misappropriation of the trade secrets.

See interim measures above.

The submission of a document during legal proceedings, which contains protected information, may take place if the information is strictly necessary to defend the interests of a party in a dispute.

Please refer to the answer to Question 12.

The ordinary legal rules apply. The defendant could request damages for abusive proceedings within the same legal proceedings.

Employers may restate in the employment contract the duty of loyalty inherent in the employment contract, which imposes:

• a duty not to interfere with the proper performance of the employment contract or to cause harm in any way whatsoever to the employer;
• a duty of loyalty and non-competition, which prohibits employees, for the duration of his employment contract, to enter into any competing activity for his/her own benefit or that of a third party,
• an obligation of confidentiality, which implies discretion, prohibits the disclosure of confidential information, which the employee would have become aware of in the course of his duties and which requires all necessary precautions to avoid having it stolen.

Employers may also insist on the obligation of confidentiality by inserting a specific clause in the contract that specifies that its compliance continues after the end of the contract. It is also possible to provide for a specific non-competition clause by delimiting its territory of application and providing for a financial contribution. Such a clause may refer to the duty not to disclose any trade secrets and provide that the employee is bound to inform any future employer or business partner of its existence and a penalty for not doing so, together with the liability of the third party where it was informed of and facilitated the trade secret's violation.

Each clause may be subject to a penalty in order to increase the likelihood of its effectiveness.

Finally, IT policies may be used to impose duties related to the access to, use and disclosure of trade secrets, and data loss prevention software to monitor the use of electronic systems by employees, subject to data protection laws, may be installed.

There are opportunities for civil action such as breach of contract, action in unfair competition including parasitism, and criminal actions where the facts show a theft of information (i.e. misappropriation), breach of trust.

Upon the terms of the contract, employers can:

• carry out a traceability examination if possible – reported as the case may be in a bailiff's report – although it is not compulsory in the presence of the employee in order to have proof of the fact it was implemented without any manipulation of any data: for example, in order to verify the history of use of a computer (i.e. control a posteriori); and
• interview employees on the specific matter to get explanations if necessary, and formally remind them of their duties (including that of confidentiality) that continues after the termination of the contract, and as the case may be, the penalties that will be incurred in case of a breach.

Whistleblowers are the subject of protection as part of the anti-money laundering system that the Principality of Monaco recognises: no element likely to identify the author of the report may be disclosed (except to the judicial authority) in the absence of the latter's consent. The identification of the accused person is subject to the well-founded nature of the report, except for the judicial authority.

The whistleblower cannot be held criminally liable, even for a violation of a secret protected by law, provided that the disclosure of the protected information is necessary and proportionate to the implementation of the anti-money laundering, terrorist financing or corruption mechanism.

The employee who makes the report may not, for this reason, be excluded from a recruitment procedure, from access to a training period or a period of vocational training, or be the subject of dismissal, a sanction or any other unfavorable professional measure.

An employer may be both civilly liable as the principal of its employees, and criminally liable where criminal actions would have been taken by a legal representative.

Since there is no legal regime for trade secrets, the main tool is a confidentiality clause.

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