Trade secret case in the Supreme Court and the EFTA Court

The Supreme Court of Norway has recently decided to refer a case concerning the submission of evidence containing trade secrets to the EFTA Court for an advisory opinion. The underlying dispute concerns a claim for damages based, among other things, on alleged violations of the Trade Secrets Act and the Marketing Control Act. The question before the Supreme Court is whether the defendants are obliged to present evidence containing trade secrets.

The main rule in Norwegian procedural law is that the parties to a dispute must present all evidence that may be of importance for the court's decision. However, there are several exemptions to this main rule, and one of the most important exemptions follows from Section 22-10 of the Dispute Act. Under this provision, a party or witness in a lawsuit may refuse to provide access to evidence that cannot be made available without disclosing a trade secret. However, the exemption is not absolute. The court may order such evidence to be made available if, after balancing relevant interests, the court deems this to be necessary.

If there is a dispute between the parties in a court case about disclosure of evidence, because one of the parties claims that the evidence contains trade secrets, the court must first decide whether it is probable that the document actually contains trade secrets. The court cannot base its decision on the party's own assessment of this.

If the answer is yes, the court must then decide whether it should order the party to disclose the document anyway. In the latter assessment, the court must weigh the need for confidentiality against the need for information that may impact the outcome of the dispute. Strong reasons are required to give such an order. If an order is issued, the court must at the same time impose a duty of confidentiality and a prohibition on the use of the trade secret that can be inferred from the evidence. The court may also decide that oral hearings on the evidence shall take place in camera (behind closed doors).

In the case that the Supreme Court has referred to the EFTA Court, the claimant demands that the court shall order the defendant to produce a document containing trade secrets. On behalf of our client, Schjødt has been successful in both the District Court and the Court of Appeal, which have concluded that there are not sufficiently strong reasons to order disclosure of the document.

However, in its appeal to the Supreme Court, the claimant has argued that it is contrary to EEA law that the Court of Appeal did not obtain the document before deciding whether to issue an order for disclosure. Reference is made to a decision from the Court of Justice of the European Union (CJEU) in the area of public procurement law (Case C-927/19). The case concerned, among other things, the question of whether the losing party in a procurement case, could demand to be presented with an unredacted version of the tender that was awarded the public contract. In assessing whether trade secrets prevented the disclosure of the tender, the CJEU issued statements that could be interpreted as an obligation to obtain the tender with trade secrets before deciding on the disclosure.

As recently as autumn 2023, the Supreme Court stated that, under Norwegian domestic law, the court has a right but not an obligation to obtain the relevant evidence before making a decision concerning the exemption for trade secrets, cf. HR-2023-1857-U. On behalf of our client, Schjødt has argued that this rule is in line with EEA law and gives the court the necessary flexibility to handle disputes in a cost-effective manner. 

Although it is important for the court to have a good basis for decision-making, not all evidence contributes significantly to the clarification of the case. If the court must obtain all documents that are claimed to contain trade secrets before making a decision on their disclosure, regardless of the probative value of the documents, this may have consequences for the effective conduct of major dispute cases. 

The case raises fundamental issues concerning the interpretation of the Directive 2016/943 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure. A decision from the EFTA Court cannot be expected before the end of 2025.

Schjødt's dispute resolution department, with Hallvard Gilje Aarseth in the lead will litigate the case in the Supreme Court, and the EFTA Court, with support from Siri Nyhus Kolbjørnsen and Schjødt's EU & Competition Group.