ripple eff ect on the economy and onto society itself. It can also lead to a slower pace of innovation and trade distortion over the longer term. So, given this operating climate, it’s very apposite to ask the question: what are the legal consequences of cyber attacks for companies and their trade secrets, employee and customer personal data, or intellectual property rights?
INTERNATIONAL COMPLICATIONS Before answering this question, it
is important to
note one factor: there may be a huge geographical distance between the attacker and the targeted company’s IT resource. This leads to extensive law enforcement issues, because there is a need for international co-operation between the states concerned and their respective legal authorities in order to deal eff ectively with the attack in question. That also raises the question as to where the cyber crime really takes place – and which legal system is applicable for the attack? Since recent cases of industrial espionage and data theft have led to an increased awareness of the problem, companies must be proactive and stringent in securing their data; and that includes the protection of personal data of employees and customers, for instance, as well as business know-how and commercial information. Legislation such as the European Union (EU)
General Data Protection Regulation (GDPR), and national data protection laws within the EU member states, have ultimately shown millions of consumers that their personal data is extremely valuable for the economy, but also that they are at risk unless protective measures are taken by the companies that handle and process their information. In addition, the EU has already implemented the Directive on the ‘protection of undisclosed know-
how and business information (trade secrets) against their unlawful acquisition, use and disclosure’ – a.k.a. the Trade Secrets Directive. This Directive is a piece of legislation that only now is transformed to the national laws of the EU states. According to the Directive, the acquisition of a
trade secret without the consent of the trade secret holder shall be considered unlawful, whenever carried out by (a) unauthorised access to, appropriation of, or copying of any documents, objects, materials, substances or electronic fi les, lawfully under the control of the trade secret holder, containing the trade secret or from which the trade secret can be deduced; and (b) any other conduct which, under the circumstances, is considered contrary to honest commercial practices. In order to reduce the risks imposed on their business and remain compliant with regard to – among others – GDPR and the Trade Secrets Directive, companies must implement a secure defence system (or review the systems that already exist) – a system that ensures the protection of data ,and detects cyber attacks even before any damage can be done. Should the company not have a working system
to protect its own company and consumer data, in the event of a successful attack on its systems, the resulting fi nes and reputational damage, as well as other losses, will be severe. Industrial espionage will continue to take hold
unless businesses take the proper steps to introduce secure standards to protect their valuable data assets. Seeking consultation from a technological and legal expert who can best advise on how to implement the necessary mechanisms that will prevent management liability in the fi rst place, therefore, is imperative. Klaus Brisch (pictured left) is Partner and Global Head of Technology at DWF.
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