Hungary: Changes in trade secrets
On 8 June 2016, the European Parliament and the European Council adopted a Directive designed to harmonize national laws across EU countries regarding unlawful acquisition, disclosure, and use of trade secrets. The goal was establishing a unified, transparent legal framework promoting innovation while deterring unfair competitive practices. Member States had until 9 June 2018 to incorporate the Directive into national legislation.
Hungary met this obligation by enacting a dedicated Trade Secrets Act, which became effective on 8 August 2018.
Prior Legal Framework
Before implementation, Hungarian trade secret protections were dispersed across multiple statutes. The Civil Code classified trade secrets and know-how as personality rights, with Civil Code penalties for violations. Relevant provisions also appeared in the Competition Act, Labour Code, and Penal Code.
Implementation Details
The new Act redefines trade secrets in alignment with the Directive, emphasizing that protection applies only when information “has been subject to reasonable steps under the circumstances to keep it secret.”
This legislation reclassifies trade secrets from personality rights to marketable economic assets. Organizations may now sell or license these rights in whole or partial fashion.
Unified sanctions are now consolidated within the single Act, removing fragmented provisions from prior statutes. Beyond traditional remedies like injunctions, rights holders may demand that infringers disclose involved parties and supply chains, provide restitution, or publish judicial decisions in newspapers or online. Interim injunctions now offer quicker enforcement mechanisms.
Practical Considerations
Courts historically examined confidentiality agreements with workers and commercial partners when evaluating adequate protective measures.
Organizations should implement additional safeguards beyond employment agreements. Reviewing company policies during GDPR adoption presents an opportune moment for comprehensive trade secret protection reviews.
Effective implementation supports innovation, facilitates knowledge transfer, and strengthens competitive positioning for Hungarian enterprises, particularly benefiting startups lacking resources for traditional intellectual property registration.