Trade secret – what is “valuable” information in the opinion of the National Appeal Chamber (KIO)?

Trade secret is one of the most important tools for protecting the interests of companies, especially in the public procurement sector, where information provided in the context of proceedings can determine competitive advantage. In the context of the case law of the KIO it is worth considering what information is considered “valuable” and how it is protected as a business secret.

Definition of business secret

According to Article 11(2) of the Act on Combating Unfair Competition, a trade secret includes technical, technological, organizational or other information of economic value which, as a whole or in a particular combination and set of its elements, is not generally known to persons normally dealing with this type of information or is not readily available to such persons.

As indicated in case law, among others, from the KIO’s verdict of February 18, 2025 ref. KIO 398/25 for an effective reservation of secrecy it is necessary to demonstrate simultaneously the fulfillment of three prerequisites – „in order to effectively reserve certain information as constituting a trade secret, the justification for the reservation should demonstrate that firstly the information in question is of a technical, technological, organizational or other nature having an economic value, secondly that the information as a whole or in a particular juxtaposition and set of its elements is not generally known to persons normally dealing with this type of information or is not easily accessible to such persons, and thirdly that actions have been taken with respect to this information in order to maintain its confidentiality. The aforementioned prerequisites must occur together.”

Trade secret in the Public Procurement Law (PPL)

The Public Procurement Law allows adequate protection for contractors who have reserved corporate secrets when bidding for a contract. This is an exception to the principle of openness of procurement proceedings. In accordance with Article 18(3) of the PPL, information that constitutes a business secret shall not be disclosed if the contractor, along with the submission of such information, reserved that it may not be disclosed and demonstrated that the reserved information constitutes a trade secret. Thus, an important element of the Contractor’s actions is not only to reserve the clause that the information constitutes a trade secret, but also, we emphasize, to actively demonstrate and justify that the information constitutes a trade secret.

Following the case law of the KIO – judgment of March 20, 2024 ref. KIO 623/23 – information submitted by a contractor may remain classified only to the extent that the contractor has met the burden of demonstrating its classified nature. The absence of explanations or the submission of general explanations should be treated as a waiver of the protection provided for in the PPL, which in turn updates the ordering party’s obligation to disclose the ineffectively classified information. The role of the contracting authority in the course of examining tenders is to determine whether the contractor has met its obligation to demonstrate that the information withheld constitutes a trade secret

At the same time, the PPL Act indicates 2 exceptions where information may not be covered by trade secrecy, which are disclosed at the stage of bid opening – these include:

• names and surnames and registered offices or places of business or places of residence of contractors whose bids have been opened,
• prices or costs contained in those bids.

Evaluation of trade secrets – KIO jurisprudence

In proceedings before the KIO, entrepreneurs often try to protect various types of information, arguing that their disclosure could negatively affect their competitiveness. The KIO has repeatedly emphasized that not every piece of information can be protected as a trade secret.

In particular, the KIO, in its judgment of August 4, 2015, ref. KIO 1538/15, indicates that in order to consider information as a business secret, an entrepreneur must expressly or implicitly express the will to keep the information secret.

In addition, when examining whether the reserved information has an economic value justifying its inclusion as a trade secret, the KIO pays attention to such exemplary relevant features as whether the explanations contain information of economic value, demonstrating that the acceding party, for example, used a unique, only for it, method of calculating the bid price, that the use by another contractor of the documents reserved by it will give or may give that contractor knowledge allowing it to save expenses or gain profits (so KIO in the judgment of February 8, 2022, ref. KIO 197/22).

The KIO, in its judgment of August 8, 2013, ref. KIO 1780/13, also emphasizes that information not disclosed to the public is information unknown to the general public or to persons who, due to their activities, are interested in having it. It also follows from this that a business secret is not information about which any interested party may learn under applicable law, for example, through access to public information. In this regard, an essential element of a trade secret is that the entrepreneur has taken actions characterized by due diligence to keep the indicated information confidential. Thus, the key criterion of a business secret is the economic value of the information and diligence in securing it.

It is also worth noting the consequence of recognizing the ineffectiveness of the reservation of trade secrets, which is the exclusion of the prohibition on disclosure of the information in question. As the KIO points out – in its ruling of December 13, 2019, ref. KIO/KU 76/19 – “the failure of the Contractor to demonstrate that the reserved information constitutes a trade secret relieves the Contracting Authority from the obligation to keep the information secret, and thus the obligation on the part of the Contracting Authority to recognize the information as open is updated.”

Information improperly designated by the Contractor as constituting a trade secret shall not be subject to protection applicable to trade secrets and shall be declassified by the Contracting Authority.

Summary

The prohibition on disclosure of trade secrets is addressed primarily to the contracting authority, which also has the burden of examining the legitimacy and effectiveness of the indicated reservation. Trade secrecy is an important element in protecting the interests of business entities, especially in a dynamically changing environment. The case law of the KIO provides valuable guidance on what information is considered “valuable” and how entrepreneurs can protect it. Effective protection of trade secrets allows to build a competitive advantage, while respecting the principles of transparency and fair competition.