Protection of Know-How/Confidential Information

The Law on Combating Unfair Competition of April 16, 2003 defines the term “business secret” as unpublicized technical, technological and organizational information of an enterprise or other information of economic value, with respect to which the entrepreneur has taken the requisite actions to keep it secret.

An act of unfair competition is construed to mean an act of transmitting, disclosing or using another’s information constituting a business secret or an act of obtaining it from an unauthorized person, if the same jeopardizes or infringes the entrepreneur’s interest.

In order to effectively assert claims under the provisions of the Law on Combating Unfair Competition, a franchisor that discloses his or her know-how and confidential information to a franchisee should obligate the latter, preferably in writing, to keep it secret. Moreover, the franchisor should precisely describe the essence of the know-how which s/he protects in order to be able to prove any possible breach of confidentiality in the future.

If a franchise agreement entitles the franchisee to use the franchisor’s trademark and know-how solely for the effective term of the agreement, upon termination or expiration of the agreement the franchisee may not use the said rights. A franchise agreement may require the franchisee to transfer all innovations and improvements made by the franchisee to the franchisor and to discontinue use of such innovations and improvements after termination or expiration of the agreement. However, if during the effective term of a franchise agreement, the franchisee itself invents and introduces a new form of a product being accepted within the entire network, the franchisee is the author thereof in accordance with the law and is therefore entitled to any royalties and the author’s moral rights. To be on the safe side, the franchisor may insert a clause in an agreement stipulating that any royalties to any works invented by the franchisee belong to the franchisor. In that case, the franchisee will be entitled solely to the author’s moral rights to the work concerned.

Generally, experts in Poland believe that there are sufficient tools for combating dishonest entrepreneurs. That said, it should be noted that overlong court proceedings are a major obstacle to enforcement of rights. Disputants are made to wait for up to 12 months for the first hearing to be scheduled by the Commercial Court. The subsequent hearings are scheduled at two-month or longer intervals. Consequently, disputants have to wait several years for the final judgment in a lawsuit. Within one year, Polish courts are not able to issue final and non-appealable judgments with respect to approx. 70% of lawsuits filed.

Akademia Rozwoju Systemów Sieciowych Sp. z o.o.