In one of three judgments that the EFTA Court delivered in August 2024, it ruled in Case E-11/23, Låssenteret AS v Assa Abloy Opening Solutions Norway AS, a case that was sent to it through the request for an advisory opinion procedure under Article 34 SCA from the Eidsivating Court of Appeal (Eidsivating lagmannsrett) of Norway, that a ‘confidentiality ring’ may be established by a national court in competition law proceedings concerning abuse of a dominant position.
The referring body is asking for an interpretation of Article 9 of the Trade Secrets Directive (Directive 2016/943 on the protection of undisclosed knowhow and business information (trade secrets) against their unlawful acquisition, use and disclosure) and Article 54 EEA. The latter, Article 54 EEA, concerns EEA competition law, namely, the abuse of a dominant position. It is the analogy of Article 102 TFEU.
Background and facts
In 2019 and 2020, Assa Abloy (who produces and sells locks, keys, door handles and door closers and services in the access control field for individuals and professional operators, such as locksmiths and building materials suppliers, and in the industrial and electrical markets) terminated a licenced dealership agreement (TVSS) and a licensed locksmith agreement (LLS) with Låssentret (who sells, installs and maintains locks and security systems). Låssentret are contesting the lawfulness of Assa Abloy terminating those agreements.
As part of its pleadings, Låssenteret claims that Assa Abloy has a dominant position in the market for mechanical and electromechanical locks/lock systems and in the aftersales service markets for the sale of spare parts for such systems, including maintenance, extensions, etc., and that the abuse may affect the installation market.Moreover, the parties have different views on how to determine the product market in terms of geography.
Next, the issue appears to be the issue of evidence of such. Whilst it is agreed that any evidence is confidential information, it is disagreed whether the confidential information is a trade secret within the meaning of the Trade Secrets Directive.
The Trade Secrets Directive only concerns ‘unlawful’ acquisition, use, or disclosure of trade secrets
The first question that the referring body asked of the EFTA Court was,
Is the material scope (ratione materiae) of Directive 2016/943 limited to cases in which the subject matter of the dispute is the use of acquired trade secrets?
The EFTA Court stated the Trade Secrets Directive,
‘concerns only the unlawful acquisition, use or disclosure of trade secrets and does not provide for measures to protect the confidentiality of trade secrets in other types of court proceedings‘ (para. 38).
The establishment of a confidentiality ring by national courts
The referring body referred a series of other questions to the EFTA Court, which were answered comprehensively by the EFTA Court in a grouped manner.
The referring body wanted to know:
- Does the Directive allow for a national court to establish a confidentiality ring for the evidence submitted in a case?
- Whether the last sentence of Article 9(2) of the Trade Secrets Directive expresses a general EEA law principle to the effect that a national court may not establish a confidentiality ring?
- Is it of significance tthat the trade secrets that are requested to be disclosed as evidence are competitively sensitive in relation to the party requesting access to the information?
- Whether a case involving abuse of a dominant position under Article 54 EEA, EEA law requires a national court to order the party alleged to have abused its dominant position to disclose evidence constituting trade secrets, without that court having to weigh up the parties’ interests?
The EFTA Court stated that the Trade Secrets Directive,
‘does not prevent a national court in a case…from establishing a confidentiality ring which does not include at least one natural person from each of the parties to the case to be granted access to evidence constituting trade secrets which are submitted as evidence in the case‘ (para. 40).
Moreover, it had to be noted that,
‘there is no single definition of “trade secret” in EEA law and that the concept of trade secret used in the context of…[the Trade Secrets Directive]…does not necessarily coincide with how it is applied in relation to Articles 53 and 54 EEA‘ (para. 49).
As for the best method of a confidentiality ring, the EFTA Court noted that,
‘a confidentiality ring that is formed solely of the parties’ legal advisers may be an effective method of facilitating disclosure in a manner that complies with EEA law‘ (para. 57).
At the time time however,
‘An interpretation of national procedural rules that rigidly rules out any possibility of implementing a mechanism for restricted disclosure, that would strike a balance between the respective interests in disclosing relevant information and protecting its confidentiality, would be liable to undermine the effective application of Articles 53 and 54 EEA‘ (para. 57, cont.).
Relevance of the Competition Damages Directive
The Competition Damages Directive (Directive 2014/104on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union) is a ‘Text of EEA Relevance’.
However, it has not been incorporated into the EEA Agreement. Because of this, there is no obligation on the referring body to interpret national law implementing the Trade Secrets Directive in light of it.
The judgment
The judgment of the EFTA Court in Case E-11/23, Låssenteret AS v Assa Abloy Opening Solutions Norway AS, delivered on 9 August 2024, is available here.