Key points
- Non-patentable know-how is protected as a trade secret (secret des affaires), a regime introduced into the French Commercial Code (Code de commerce) by the Law of 30 July 2018.
- This regime protects against unlawful acquisition, use and disclosure, but it does not confer a monopoly enforceable against lawful reverse engineering.
- Three cumulative criteria are required (Article L.151-1): information that is not known, commercial value linked to its secrecy, and reasonable protective measures.
- If any one of the three criteria is missing, the qualification falls away: know-how without concrete protection does not benefit from the regime.
- Contractual measures (NDAs, confidentiality clauses) give tangible form to the intention to preserve secrecy and set out the sanctions.
- Organisational measures (access restrictions, traceability, marking, compartmentalisation) demonstrate that the protection is reasonable.
Not every innovation can be patented, and not every patentable innovation deserves to be. A manufacturing process, a formula, an optimisation method, a technical database: such know-how is often at the heart of a company’s value, without meeting the conditions for a patent, or without it being advisable to disclose it in a published application. How can it be protected? The law offers an often underestimated route: the trade secret. You still need to understand its logic, because this protection is not automatic. It requires specific criteria to be met and, above all, concrete measures to preserve secrecy. In an R&D project, where information circulates between partners, employees and service providers, the issue is all the more acute. This article sets out the conditions for protection and the measures to put in place.
Every situation is different and depends on the information at stake and on the organisation in place. The analysis below presents the applicable framework, not advice tailored to a specific case.
Non-patentable know-how: the trade secret route
When strategic information cannot or should not be patented, the trade secret offers a framework for protection. Introduced into the Commercial Code by the Law of 30 July 2018, which transposed Directive (EU) 2016/943 of 8 June 2016, this regime protects undisclosed know-how and business information against unlawful acquisition, use and disclosure.
One point must be made from the outset. A trade secret is not an exclusive right comparable to a patent. It confers no monopoly enforceable against a third party who reaches the same result by their own means or through lawful reverse engineering, two lawful means of acquisition provided for by Article L. 151-3 of the Commercial Code (in French). It protects against unfair infringements, which makes it a powerful tool, but with a different scope from a patent.
What are the three criteria of Article L.151-1?
Article L.151-1 of the Commercial Code defines a trade secret through three cumulative criteria. First, the information must not be generally known or readily accessible to persons familiar with this type of information in the sector concerned. Second, it must have commercial value, actual or potential, precisely because it is secret.
Finally, it must be subject to reasonable protective measures by its lawful holder to keep it secret. These three conditions cannot be separated: if one of them is missing, the qualification falls away. Valuable know-how left without protection does not benefit from the regime.
Reasonable protective measures: a condition of protection
The third criterion is often the weak point. Protection requires concrete measures, and the burden of having put them in place lies with the holder. These measures operate on two levels: contractual and organisational.
Contractual measures
Confidentiality agreements, or NDAs, govern exchanges with partners, service providers and prospective collaborators. Employment and service contracts include suitable confidentiality clauses. These commitments, based on the freedom of contract set out in Article 1102 of the French Civil Code (Code civil), give tangible form to the intention to preserve secrecy and set out the sanctions in the event of a breach.
Organisational measures
Protection is not just a matter of paperwork. Restricting access to sensitive information, tracing who consults it, marking documents as confidential and compartmentalising teams are all part of the system. When the time comes, these measures demonstrate the reasonable protection required by law.
Protecting know-how in an R&D project
R&D collaboration multiplies the points of leakage. The information each party contributes, and the information produced during the project, circulates between players whose interests sometimes diverge. The collaboration agreement must identify the protected know-how, organise the conditions for sharing it and govern its use once the project ends.
How it fits with other rights also matters. Know-how may accompany patented results, or be the only protection where the patent route is not chosen. Consistency between patent strategy, trade secrets and confidentiality clauses determines the strength of the whole. This fit is assessed case by case, depending on the nature of the information and the structure of the project.
Points to watch
- A trade secret is not a monopoly: it does not protect against independent discovery or lawful reverse engineering.
- The three criteria of Article L.151-1 are cumulative: the absence of protective measures is enough to rule out the qualification.
- A single NDA is not enough: the measures must be consistent, both contractual and organisational.
- The burden of proving reasonable measures lies with the holder: document your system.
- In an R&D project, address know-how from the collaboration agreement onwards, in line with any patent strategy.
When should you consult a lawyer?
A lawyer can help you characterise the know-how, build a consistent protection system and draft confidentiality agreements as well as the clauses of collaboration agreements. The aim is to meet and document the conditions of the regime before any dispute arises. For the overall strategy, a trade secrets lawyer can help calibrate the measures, while know-how protection forms part of a broader approach to protecting intangible assets.
Each case deserves its own analysis: the solution depends on the facts, the nature of the information and the organisation in place.
What the law says
Non-patentable know-how can be protected as a trade secret. Article L151-1 of the Commercial Code protects information that meets three cumulative conditions: it is “not generally known or readily accessible” to persons in the sector; it has “commercial value, actual or potential, because of its secret nature”; it is subject to “reasonable protective measures” by its lawful holder (unofficial translation).
Protection therefore depends largely on the concrete measures in place: confidentiality agreements, restricted access, document marking, clauses in employment and service contracts. Without these measures, the third condition is not met and the secret becomes legally fragile, whatever its real value.
Official sources
- Article L151-1 of the Commercial Code, protection of trade secrets: Légifrance (in French)
Every situation is different. To protect know-how as a trade secret, our intellectual property and trade secrets lawyers assist you.
For assistance: know-how protection lawyer.
