The Italian Council of State recently dealt with trade secrets in the context of an administrative tendering procedure, declaring that data and information constituting trade secrets cannot be displayed unless the legitimate right of defense is at stake.
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On March 27, 2020, the Italian Council of State (“CoS”) partially accepted the appeal brought by an Italian company (“Appellant”). More specifically, the CoS ordered the public administration of the Province of Rimini (“Province of Rimini”) to grant access to the awarded tenderer’s data and information that do not constitute trade secrets, in the context of an administrative tendering procedure for the concession of the service of restoring road safety and road conditions.
As factual background, after the award of the tender, the Appellant applied to the Province of Rimini for access to the administrative and technical documentation submitted by the awarded tenderer. However, the Province of Rimini only partially accepted the Appellant’s request, as it denied access to certain parts of the counterparty’s technical report. Thus, the abovementioned documentation was partially redacted, as it contained data and information that could constitute trade secrets pursuant to Articles 98[1] and 99 of the Italian Industrial Property Code (“IPC”).
After the Regional Administrative Court of Emilia Romagna (“TAR”) rejected the appeal attempting to overturn the decree of the Province of Rimini, the Appellant further appealed to the CoS. With specific reference to trade secrets, the Appellant claimed that Section 53 para. 6 of the Italian Legislative Decree No. 50 of April 18, 2016 concerning public supply contracts (“Code”) was misinterpreted by the TAR. According to the Appellant, data and information contained in the technical report could not be considered trade secrets and, as a result, access to them should be granted, in light of the legitimate right of defense of the Appellant.
Encompassing the pivotal principle of balancing conflicting interests within the Italian administrative legal regime, Section 53 para. 6 sets forth that technical and/or commercial secrets may be displayed as long as doing so is strictly necessary for the counterparty to exercise its legitimate right of defense within judicial proceedings. According to the CoS, the Province of Rimini had correctly applied that legal norm, as the Appellant did not successfully prove that the redacted data and information were critical and necessary in order for it to exercise its right of defense.
In conclusion, the CoS stated, “In relation to technical or commercial secrets, it is necessary to resort to the criterion of balancing conflicting interests cited in Article 53(6) [of the Code], the strict interpretation of which — […] requiring, on the part of the applicant, proof of the indispensability of the documents to which access is requested, so that he can defend himself in a given case — is explained due to the fact that the interest of the defense is offset by the need to protect information containing technical or commercial secrets.”[2] On the contrary, “Where these [technical or commercial secrets] do not exist, the principles of transparency and public access to administrative action, which are increasingly involved in the procedures for the award of public contracts, are reinstated.”[3]
[1] Pursuant to Article 98 IPC, “trade secrets” refers to business information and technical-industrial experience, including commercial experience, subject to the legitimate control of the rightsholder, that are: (i) secret; (ii) of economic value; (iii) subject to measures to be considered reasonably adequate to keep them secret.
[2] Council of State, Decree of March 27, 2020, No. 2150, p. 8 – translation by the authors.
[3] Ibid.
