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Restriction of Unfair Competition and Protection of Business Secrets Act

Issuer:Riigikogu
Type:act
In force from:17.12.2018
In force until: In force
Translation published:20.12.2018

Restriction of Unfair Competition and Protection of Business Secrets Act1

Passed 21.11.2018

Chapter 1 General Provisions 

§ 1.  Scope of regulation of Act

 (1) This Act provides the prohibition on unfair competition, the claims arising from a breach thereof and the procedure for processing such claims.

 (2) The provisions of the Code of Civil Procedure apply to the civil proceedings prescribed in this Act, taking account of the specifications provided for in this Act.

§ 2.  Application of other Acts

  The provisions of the Advertising Act apply to misleading, unfair or denigratory information as a method of advertising.

Chapter 2 Unfair Competition 

§ 3.  Prohibition on unfair competition

 (1) Unfair competition is prohibited.

 (2) Unfair competition is taken to mean dishonest trading practices and acts which are contrary to good morals and practices, including:
 1) disclosure of misleading information, presentation and ordering of misleading information for disclosure and disparagement of a competitor or the product or service (hereinafter goods) of the competitor;
 2) unlawful acquisition, use and disclosure of a business secret;
 3) misuse of an employee or representative of a competitor.

§ 4.  Disclosure of misleading information, presentation and ordering of misleading information for disclosure and disparagement of competitor and goods of competitor

 (1) Disclosure, presentation or ordering for disclosure, of misleading information concerning either oneself or another undertaking participating in a goods market or concerning the goods or work equipment of such undertaking is prohibited, except in cases where disclosure of such information has been ordered from the discloser of the information or where the discloser is not responsible for the correctness of the information presented thereto.

 (2) Misleading information is incorrect information which, given ordinary attention on the part of the buyer, may leave a misleading impression of an offer or which harms or may harm the reputation or economic activities of another undertaking.

 (3) Information specified in subsection (2) of this section primarily refers to information concerning the origin, qualities, method of production, means or sources of supply, prices, tariffs, discounts, awarding as a prize, reasons for sale and the size of the stock of the goods offered, as well as the preferential rights, financial status and other qualities of the undertaking.

§ 5.  Unlawful acquisition, use and disclosure of business secrets

 (1) The acquisition of a business secret without the consent of the person lawfully in control of it is unlawful if such acquisition involves:
 1) unauthorised access to, appropriation of, or copying of any documents, objects, materials, substances or electronic files, under the control of the person lawfully in control of the business secret, containing the business secret or from which the business secret can be deduced; or
 2) any other actions which, under the circumstances, are deemed contrary to honest commercial practices.

 (2) A business secret is information which meets the following requirements:
 1) it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
 2) it has commercial value because it is secret; and
 3) it has been subject to reasonable measures under the circumstances, by the person lawfully in control of the information, to keep it secret.

 (3) The use or disclosure of a business secret without the consent of the person lawfully in control of it is unlawful whenever carried out by a person who:
 1) has acquired the business secret unlawfully for the purposes provided in subsection (1) of this section;
 2) breaches the obligation not to disclose the business secret; or
 3) breaches the obligation to limit the use of the business secret.

 (4) The acquisition, use or disclosure of a business secret is also unlawful whenever a person, at the time of the acquisition, use or disclosure, knew or ought to have known that the business secret had been obtained directly or indirectly from another person who was using or disclosing the business secret unlawfully for the purposes of subsection (3) of this section.

 (5) The production, offering or release of such goods, the design, characteristics, functioning, production or marketing of which significantly benefits from a business secret unlawfully acquired, used or disclosed (hereinafter goods harming a business secret), or the importation, export or storage of goods harming a business secret for that purpose, shall also be deemed unlawful use of a business secret where the person carrying out such activities knew or ought to have known that the business secret was used unlawfully for the purposes of subsection (3) of this section.

 (6) The acquisition, use or disclosure of a business secret is not deemed unlawful if it is necessary to:
 1) reveal unlawful acts for the purpose of protecting public interests;
 2) enable employees to protect their rights and interests through the representative of employees, provided that the disclosure of a business secret by an employee to a representative is necessary for exercising the functions within the competence of the representative; or
 3) protect a recognised legitimate interest.

§ 6.  Misuse of employee and representative of another undertaking

  Misuse of an employee or representative of a competitor is the exertion of influence on him or her to act in the interests of the influencing party or a third party.

Chapter 3 Protection of Business Secrets 

§ 7.  Prohibition of unlawful acquisition, use and disclosure of business secrets

 (1) If the breach of an obligation or the unlawful causing of damage consists of the unlawful acquisition, use or disclosure of a business secret, the person whose rights were breached may claim:
 1) the termination or the prohibition of the unlawful use or disclosure of the business secret;
 2) the prohibition of the production, offering or release of goods harming the business secret or the importation, export or storage of goods harming the business secret for that purpose;
 3) the implementation of reasonable measures with regard to goods harming the business secret, including depriving the goods harming the business secret of their harmful quality or the destruction, recall or withdrawal from the market of the goods harming the business secret, provided that the withdrawal does not undermine the protection of the business secret;
 4) the destruction of or delivery to himself/herself of all or a part of any document, object, material, substance or electronic file containing or embodying the business secret.

 (2) Claims specified in subsection (1) of this section may be made if it is proportionate, also taking account of the following:
 1) the value or other specific features of the business secret;
 2) the measures taken to protect the business secret;
 3) the way in which the person in breach has acquired, used or disclosed the business secret;
 4) the impact of the unlawful use or disclosure of the business secret;
 5) the legitimate interests of the parties and the impact which the implementation of the claims specified in subsection (1) of this section would have on the parties;
 6) the legitimate interests of third parties; and
 7) the public interest.

 (3) If the court restricts the implementation of the claims specified in clauses (1) 1) and 2) of this section to a limited period, such duration shall be sufficient to eliminate any commercial or economic advantages that the person in breach gained from the unlawful acquisition, use or disclosure of the business secret.

 (4) The person against whom a claim specified in subsection (1) of this section is made, may request a court to substitute the implementation of the claim with an order for monetary compensation to be paid to the person whose rights were breached if:
 1) the person at the time of use or disclosure of the business secret neither knew nor ought to have known that the business secret was acquired from another person who was using or disclosing the business secret unlawfully;
 2) the implementation of measures would cause the person disproportionate harm; and
 3) the monetary compensation may be deemed sufficient compensation for the person who applied for the implementation of the claim.

 (5) If the obligation to pay monetary compensation specified in subsection (4) of this section is applied instead of implementing the claims specified in clauses (1) 1) and 2) of this section, the monetary compensation shall not exceed the fee that the person in breach would have had to pay had the person in breach obtained authorisation to use the business secret in the period of time for which use of the business secret would have been prohibited.

 (6) The implementation of the claims specified in clauses (1) 3) and 4) of this section may be requested at the expense of the person unlawfully acquiring, using or disclosing a business secret, except in cases where this would be unreasonable.

§ 8.  Extent of compensation for damage upon unlawful acquisition, use and disclosure of business secrets

 (1) Proprietary and non-proprietary damage caused by unlawful acquisition, use or disclosure of a business secret is to be compensated for.

 (2) If the causing of damage by means of unlawful acquisition, use or disclosure of a business secret has been determined, but there is no way to determine the precise amount of the damage, the court may, provided that it is reasonable to do so, set a fixed sum as damages, based on but not limited to the amount of fees that the person in breach would have had to pay had the person in breach obtained authorisation to use the business secret.

Chapter 4 Procedural Provisions 

§ 9.  Securing of action in case of action on unlawful acquisition, use and disclosure of business secrets

  Upon securing an action based on the unlawful acquisition, use or disclosure of a business secret or upon selecting a measure for securing such an action, it is also necessary to take account of the following:
 1) the value and other specific features of the business secret;
 2) the measures taken to protect the business secret;
 3) the way in which the defendant has acquired, used or disclosed the business secret;
 4) the impact of the unlawful use or disclosure of the business secret;
 5) the legitimate interests of the parties and the impact which the securing or failure to secure the action would have on the parties;
 6) the legitimate interests of third parties; and
 7) the public interest.

§ 10.  Substitution of securing of action with payment of money in case of action based on unlawful use of business secrets

 (1) In a ruling on securing an action based on the unlawful use of a business secret, the court may determine the sum of money, upon payment of which to the bank account prescribed for such purposes or upon the provision of a bank guarantee to the extent of which the enforcement of the ruling on securing the action is terminated.

 (2) In the case specified in subsection (1) of this section, subsection 386 (3) of the Code of Civil Procedure shall not apply.

§ 11.  Determination of procedure for disclosure of judgment related to unlawful acquisition, use and disclosure of business secrets

 (1) In case of action based on unlawful acquisition, use or disclosure of a business secret, the court may, upon the request of the party in favour of whom the court decides, prescribe that the information contained in the court judgment must be made public at the expense of the party against whom the court decides, in the manner and pursuant to the procedure determined by the court or that the judgment must be disclosed in part or in full.

 (2) Upon implementing the measure specified in subsection (1) of this section and upon choosing a measure, it is necessary to also take account of the following:
 1) the value of the business secret;
 2) the way in which the defendant has acquired, used or disclosed the business secret;
 3) the impact of the unlawful use or disclosure of the business secret;
 4) the likelihood of further unlawful use and disclosure of the business secret by the defendant;
 5) the possibility of identification of a natural person on the basis of disclosed information; and
 6) the justification of disclosed information compared to the possible harm the disclosure of such information may cause to the privacy and reputation of the defendant.

Chapter 5 Implementing Provisions  

§ 12. – § 17.The provisions on amendment of other Acts omitted from translation.


1 Directive (EU) 2016/943 of the European Parliament and of the Council on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (OJ L 157, 15.06.2016, pp. 1–18).

Eiki Nestor
President of the Riigikogu

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