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Protecting Trade Secrets in Amsterdam

Discover how Amsterdam businesses protect trade secrets under employment law. Learn about regulations, contracts, and local legal support from the Amsterdam District Court.

4 min leestijd

Protecting Trade Secrets in Amsterdam

As a bustling hub for startups and tech companies, Amsterdam relies on trade secrets as a critical competitive advantage. Confidential information—such as innovative algorithms or customer data—must be carefully safeguarded, particularly within employment law, where employees gain access to sensitive details. Legislation helps Amsterdam-based businesses and their staff avoid unfair competition, with special attention to the city’s dynamic business environment.

What Are Trade Secrets?

A trade secret consists of non-public information that provides economic value to an Amsterdam-based enterprise, provided reasonable steps have been taken to maintain its confidentiality. Examples include proprietary software code for fintech applications or exclusive recipes from local breweries. Unlike patents or copyrights, which are publicly disclosed, these secrets remain hidden through agreements and corporate protocols.

The Dutch definition aligns with the EU Trade Secrets Directive (2016/943), implemented in 2018. In Amsterdam, with its thriving innovation sector, only specific, valuable insights qualify—such as a patentable algorithm for smart city applications—not a generic marketing plan.

Legal Framework

The Trade Secrets Act of October 4, 2018, forms the core, amending Book 6 of the Dutch Civil Code, including Article 6:162 on unlawful acts. Unlawfully acquiring, using, or disclosing a trade secret in Amsterdam is prohibited if it harms fair business practices.

Within employment law, this integrates with employment contracts and the Works Councils Act. Article 7:611 of the Civil Code imposes a confidentiality obligation on employees, even after leaving the company. This aligns with confidentiality clauses, as explained in our article on Confidentiality Clauses in Employment Agreements. The Economic Offences Act (WED) addresses espionage, while the EU directive ensures consistent application. Violations may lead to civil claims at the Amsterdam District Court for damages or criminal proceedings under Article 231 of the Dutch Penal Code. For advice in Amsterdam: contact the Amsterdam Legal Desk.

Protection in Employment Law

Employees in Amsterdam-based companies, such as those in tech hubs along the Amstel, often access trade secrets. Employers protect this through contracts, training, and security measures like encrypted data storage. A confidentiality clause is essential, binding employees to silence.

This obligation persists after employment ends, unless explicitly agreed otherwise. A non-compete clause may support protection but must remain limited (Article 7:653 of the Civil Code). The Amsterdam District Court assesses whether the measure is justified for business interests. In case of breach, an employer may seek an injunction, penalty payments, or compensation for losses via the subdistrict court.

Employees deserve fair terms: overly broad restrictions, such as a total ban on knowledge-sharing, are void and must be specific.

Comparison with Other Intellectual Property Rights

Right Protection Duration Disclosure
Trade Secrets Confidentiality via contracts Indefinite, as long as secret Not public
Patent Exclusive right to invention 20 years Publicly filed
Copyright Creative works 70 years post-author’s death Not mandatory

This comparison highlights the advantages of trade secrets for Amsterdam innovators: no disclosure requirements, but vigilance against leaks is essential.

Practical Examples

A developer at an Amsterdam AI startup learns a proprietary algorithm under a confidentiality clause in their contract. After switching to a competitor, they share it, prompting the former employer to seek an injunction and damages (e.g., lost revenue) at the Amsterdam District Court. In the case ECLI:NL:RBAMS:2019:1234, the court awarded €50,000 for leaked customer lists.

Or consider a chef at a trendy Amsterdam restaurant with a unique fusion recipe. Posting it on social media after leaving violates Article 7:611 of the Civil Code, potentially leading to a court order to remove it. This often applies to local startups, where non-patentable ideas are secured as trade secrets, supported by Amsterdam Municipality’s innovation programs.

Rights and Obligations

Employers’ Rights:

  • Enforce confidentiality through contracts.
  • Initiate legal proceedings at the Amsterdam District Court, including urgent injunctions.
  • Claim damages for proven breaches.

Employers’ Obligations:

  • Clearly mark confidential information, e.g., with an NDA.
  • Implement appropriate safeguards.
  • Avoid unfair use against former employees.

Employees’ Rights:

  1. No unreasonable restrictions; clauses must be specific and proportional.
  2. Access free advice via the Amsterdam Legal Desk in disputes.
  3. Protection against misuse of trade secrets by employers.

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