The Rome II Regulation on applicable law

With effect from January 11, 2009, the applicable law for all kinds of non-contractual obligations in situations involving a conflict of laws will be determined by the so-called Rome II Regulation, which will apply to almost all civil and commercial litigation, [FN5] in allMember States of the European Communities (except Denmark), [FN6] and in all courts of whatever nature. [FN7] The Regulation will apply regardless of the connections of any party with European or non-European countries, and whether or not the law identified as applicable is that of a Member State. [FN8] It is truly of "universal application". The concept of a non-contractual obligation is declared by Recital 11 to be "autonomous", so that its meaning is independent of any national system of law. It includes tort (delict), unjust enrichment, acts of unfair competition and infringements of intellectual property rights.

There are some minor exceptions to the Rome II regime which may affect the action for breach of confidence in its full width, but which are no more than marginally relevant to trade secret cases properly so called. [FN9] The Regulation does not apply to matters of administrative law, nor to the liability of the State for acts and omissions in the exercise of State authority (acta iure imperii). [FN10] It would therefore be inapplicable to cases such as R v Licensing Authority Ex p. Smith Kline & French [FN11] in which the State or one of its agencies was alleged to have misused confidential information while acting in the course of its regulatory functions. At the other end of the scale, non-contractual obligations arising out of violations of privacy and rights relating to personality such as those in Douglas v Hello! [FN12] are excluded from the scope of the Regulation by Art.2(g). [FN13] These continue to be governed by national conflicts rules.

What is determined by the applicable law?

The Rome II Regulation identifies the applicable law for non-contractual obligations of all kinds. This is logically independent of the question of jurisdiction, which is separately governed by the Jurisdiction Regulation, so that a court seized of an action on a non-contractual obligation might very well find itself applying a body of law, or laws, different from its own. Only in the case of civil actions for breach of competition (antitrust) law does the Regulation make any special attempt to align the applicable law with the law of the court seized. [FN14]

The identification of the applicable law is obviously an essential preliminary to adjudicating the merits *310 of the claim, but its effects go much further than might appear at first sight. The applicable law governs not only the basic question of whether a wrongful act has been committed or not, but such questions as: the basis and extent of liability; the liability of different defendants as tortfeasors or accessories; the existence, nature and assessment of damage; remedies, both monetary and injunctive; [FN15] locus standi; defences, limitation, and contribution; and the extinction of rights and remedies. [FN16] Evidence and court procedure in general are not affected by the Regulation, and remain governed by the lex fori. [FN17] However, if the applicable law contains any rules which raise presumptions of law, or determine the burden of proof, then those do apply. [FN18]

Rome II and unfair competition

The "general rule" of the Rome II Regulation is stated at Art.4, to which this article will shortly return, but there are a number of special cases, each of which constitutes an exception to the latter. [FN19] Of special relevance to trade secret protection is Art.6, dealing with "unfair competition and acts restricting free competition". Article 6 provides [FN20]:
1. The law applicable to a non-contractual obligation arising out of an act of unfair competition shall be the law of the country where competitive relations or the collective interests of consumers are, or are likely to be, affected.
2. Where an act of unfair competition affects exclusively the interests of a specific competitor, Article 4 shall apply...."
There is a strong argument from the context and the legislative history that the term "unfair competition" has an autonomous meaning, and that the protection of trade secrets falls within its scope. In that case, misuse of trade secrets falls within the autonomous scope of Art.6, regardless of whether or not it would be regarded as an example of unfair competition under the applicable national law. If this is indeed the case, then at first sight the general rule of Art.4 might seem to be displaced by that of Art.6(1) in trade secret cases. However, the next stage in the analysis will typically render the latter question moot.

Article 6 distinguishes between two categories of unfair competition, according to whether the act complained of affects exclusively the interests of specific competitor(s) (para.2), or whether the interests of other competitors, consumers, and the public at large are likely to be engaged (para.1). The special rule of Art.6(1) applies only in the latter case, and in the former case Art.6(2) operates to reinstate the "general rule" of Art.4. Just as classic passing-off exemplifies a category of unfair competition which has the potential to affect "competitive relations and the collective interests of consumers", so as to engage Art.6(1), so breach of trade secrets would seem, at least in the majority of cases, to provide a perfect example of an act of unfair competition which adversely affects no one but the proprietor of the secret information. [FN21]

Recital 21 asserts that Art.6 is not an exception to Art.4, but a special case of the latter. This is presumably intended to prevent Art.6 from receiving an unduly narrow interpretation from the European Court of Justice (ECJ), according to the latter's self-imposed dogma that exceptions are to be construed restrictively. [FN22] However, if it is Art.4, rather than Art.6(1), which typically supplies the relevant choice of law rule in trade secret cases, then the precise relationship between Arts 4 and 6 ceases to be important for present purposes.

The travaux préparatoires

The foregoing analysis is confirmed by the Explanatory Memorandum in support of the Commission's 2003 proposal for the Rome II Regulation. [FN23] At this point in time the draft of the relevant Article was considerably shorter than it was later to become, and read simply [FN24]:
1. The law applicable to a non-contractual obligation arising out of an act of unfair competition shall be the law of the country where competitive relations or the collective interests of consumers are or are likely to be directly and substantially affected.
2. Where an act of unfair competition affects exclusively the interests of a specific competitor, Art.[4](2) and (3) shall apply.
The relevant commentary began [FN25]:
"Article [6] provides for an autonomous connection for actions for damage arising out of an act of unfair competition."
This is important because it confirms that the concept of unfair competition is intended to be uniform ("autonomous") under the Regulation, and not governed by any national system of law. Unfair competition was further described or defined in terms more likely to be familiar to Continental lawyers [FN26]:
*311 "The purpose of the rules against unfair competition is to protect fair competition by obliging all participants to play the game by the same rules. Among other things they outlaw acts calculated to influence demand (misleading advertising, forced sales, etc.), acts that impede competing supplies (disruption of deliveries by competitors, enticing away a competitor's staff, boycotts), and acts that exploit a competitor's value (passing off and the like). The modern competition law seeks to protect not only competitors (horizontal dimension) but also consumers and the public in general (vertical relations). This three-dimensional function of competition law must be reflected in amodern conflict-of-laws instrument.
Article [6] reflects this triple objective since it refers to the effect on the market in general, the effect on competitors' interests and the effect on the broad and rather vague interests of consumers (as opposed to the individual interests of a specific consumer)."
These considerations led to the primary rule of what is now Art.6, which is the applicable law is that of the market (or markets) affected. However, the Commission recognised that certain acts of unfair competition were essentially bilateral, and did not significantly affect competitors and the market at large, or otherwise engage the public interest so as to justify a mandatory, marketcentred, rule. With trade secrets clearly as one example in mind, the Commission explained [FN27]:
"Paragraph 2 deals with situations where an act of unfair competition targets a specific competitor, as in the case of enticing away a competitor's staff, corruption, industrial espionage, disclosure of business secrets or inducing breach of contract. It is not entirely excluded that such conduct may also have a negative impact on a given market, but these are situations that have to be regarded as bilateral. There is consequently no reason why the victim should not enjoy the benefit of Article [4] relating to the common residence or the general exception clause."
It is of interest that the draft Regulation then under consideration specifically referred back to paras 2 and 3 of what is now Art.4 (the paragraph numbering within the Article has not changed), explicitly excluding the application of the lex loci damni rule of para.1.

All this is relevant not only as part of the travaux préparatoires, and as a statement of the Commission's legislative intentions, but because it reflects the fact that in many Member States of the Community, laws of unfair competition are far more extensive than the common law knows. This state of affairs was, and is, part of the context or "factual matrix" of the Regulation, and to that extent its relevance transcends the Commission's declarations of legislative intent. It is fortunate, however, that the Commission's intention to include trade secrets under the head of unfair competition for Art.6 was expressed, since it may be doubted whether trade secret protection is so universally regarded as an integral part of unfair competition law as to compel this conclusion simply as a matter of comparative law. The situation in the United Kingdom and Ireland, where the law of unfair competition is narrowly circumscribed and trade secrets are protected under a separate equitable jurisdiction, obviously did not detain the draftsman. [FN28]

Earlier and later travaux

The Rome II Regulation had a lengthy and controversial gestation period, and other travaux préparatoires are numerous but less informative. Previous unofficial drafts of 1997 (The Hague) and 1998 (Luxembourg) had more briefly provided [FN29]:
"Notwithstanding the provisions of paragraphs 2 and 3 of Article [4], it shall be presumed that a non-contractual obligation is most closely connected: b) in case of unfair competition or restrictive trade practices, with the country whose market is affected by the harmful event..."
With the commentary on the 1998 draft adding [FN30]:
"L'établissement de rattachements spéciaux (protection de la vie privée, concurrence, protection de l'environnement) s'explique à la fois par l'inadéquation, dans des contextes particuliers, du facteur de la résidence habituelle des parties et par l'importance qu'il convient de reconnaître au lieu où le dommage est survenu dans de tels contextes."
The first official (internal) Community draft to include a specific rule for unfair competition appears to be that of December 1999, which offered two closely similar alternatives [FN31]:
"Article 6: (Unfair competition and unfair practices)
Option 1: The law applicable to an obligation arising from unfair competition or unfair practices shall be the law of the country where the competitive action or unfair practices affects competitive relations or collective consumer interests.
Option 2: The law applicable to an obligation arising from unfair competition of restrictive trade practices shall be the law of the country where the competitive action or unfair practices affect competitive relations."
The published 2003 proposals are covered above. [FN32] Although there was considerable activity between 2003 and 2007--including publication of new drafts and memoranda in 2006, partly in response to counterproposals from the European Parliament--none of these appears to have had much direct impact on the subject matter of the present article. The Commission did seem at one point to favour a proposal to *312 substitute the concept of "unfair commercial practice" (by reference to the recently adopted Directive 2005/29 on unfair business-to-consumer trade practices [FN33]) for that of "unfair competition", but this never found its way into the final Regulation. [FN34]

Intellectual property

The Rome II Regulation also contains specific provision for intellectual property rights at Art.8. Trade secrets (in the narrow sense) and confidential information (in its wider aspects) have a complex and ambiguous relationship with intellectual property law, as does the generic law of unfair competition. In the present case, however, the clear intention of the Regulation is that unfair competition (Art.6) and intellectual property (Art.8) should be distinguished, and made subject to separate rules. Assuming that the protection of trade secrets falls within the autonomous meaning of "unfair competition", then the lex specialis principle means that it cannot simultaneously be governed by Art.8.

Derogation, contract, and free choice of law

Not the least important consequence of whether trade secrets are governed by Arts 4, 6 or 8 of the Rome II Regulation concerns whether the parties are free to make their own choice of applicable law pursuant to Art.14. If such an agreement is possible at all it may always be made ex post facto, and in the case of parties "pursuing a commercial activity" (as will almost invariably be the case in trade secret cases between competitors) it may be made in advance of the harmful event, provided the agreement was freely negotiated.

Such agreements are obviously rather unlikely in cases of pure non-contractual liability, and not only for the same reasons that ex post facto choice-of-court agreements are rare, but what is important is that the parties to a contract under which trade secrets were to be disclosed might very well want to agree that any non-contractual liability should be governed by the same applicable law as that chosen for the contract. [FN35] Provided Art.4 applies, there is no reason why this should not be possible. [FN36] Articles 6 and 8, on the other hand, contain mandatory rules as to the applicable law, from which consensual derogation is entirely prohibited. The terms of Art.14 also seem to preclude effective ex ante agreements with employees, and of course any choice made pursuant to Art.14 does not bind or prejudice third parties.

Article 4 and how it will work in practice

The "general rule" of Rome II

Whether one starts at Art.6 and treats the protection of trade secrets as an aspect of unfair competition law which is referred back to Art.4 by virtue of Art.6(2), or one goes directly to Art.4 as the general rule for tortious liability, the analysis sooner or later leads to the latter. Para.1 of Art.4 provides:
"4(1) Unless otherwise provided for in this Regulation, the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur."
As indicated above, the concept of a "non-contractual obligation" is autonomously determined for the purposes of the Regulation without reference to national law, [FN37] and is broad enough to include unjust enrichment as well as torts in the conventional sense. [FN38] Moreover, provided it is correct to say that a breach of trade secret law is typically an "act of unfair competition", then the question of whether it would otherwise be a "tort" (or "delict") according to the autonomous meaning of those terms in the Regulation is irrelevant, since Art.6(2) has answered the question for us by a process of recursion to Art.4. If an act of unfair competition is not a "real" tort, then it must at least be a deemed one, or the intended application of Art.4 in preference to Art.6(1) would be frustrated.

However, the lex loci damni is only the first of the three possibilities contemplated by Art.4. The second provides that:
"4(2)However, where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply."
This is an example of the so-called common personal law (or lex domicilii communis). Companies, as well as individuals, have a habitual residence, which is the place of their central administration. [FN39] The third possibility contemplated by Art.4 is that:

"4(3) Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated *313 in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question."
Any one of the three alternatives of Art.4 might be thought to be capable of applying to trade secret actions in practice, with the potential for radically different effects on ultimate liability and the conduct of the litigation, depending on which governs in an individual case. According to Recital 18, the rule of para.2 is an exception to that of para.1, and that of para.3 is an "escape clause" from both of its predecessors. This choice of terminology is significant, because the mantra of the ECJ is that exceptions are to be interpreted restrictively. [FN40]

Lex loci delicti commissi or lex loci damni?

The first of the three alternative rules contemplated by Art.4 is the application of the lex loci damni, expressly in preference to the lex loci delicti commissi, in case there should be any difference. The applicable law according to para.1 is that of the country in which damage occurs, without regard to where the event giving rise to the damage actually took place, and without taking into account any "indirect consequences", presumably including consequential (economic) loss. If the wrongful event occurred in one country, but damage was suffered in another, then it is the law of the latter which applies.

Whatever else may be said in its favour in other contexts, the rule of para.1 can be expected to be particularly difficult to apply in international trade secret cases, and potentially disastrous in its consequences. It will be difficult to apply because trade secrets are even more nebulous and intangible than intellectual property rights in general, and damage arising from their disclosure or misuse is neither localised nor confined to a particular jurisdiction. To say, in a trade secret case, that damage occurred in a particular place for the purposes of para.1 is not to take account of any observable physical or economic phenomenon, but to apply essentially arbitrary or legalistic concepts which have had to be invented to deal with the case. It is generally rather easier and less artificial to say where each of the relevant "harmful event(s)" (or wrongful acts) took place--though there is a degree of artificiality even to this--but the place of the wrongful act does not necessarily equate to the place or places where damage is suffered, and only the latter is relevant to the operation of Art.4(1). [FN41]

The rule is potentially disastrous because it is likely to lead to fragmentation of the applicable law between as many jurisdictions as there are buyers for the contentious trade secret itself, outlets for its publication, or markets for products derived from its misappropriation. These appear to be the natural candidates for identifying the places where damage might be said to have occurred, and each requires to be dealt with separately since a different national applicable law might apply on each occasion. This mandatory fragmentation of causes of action along national boundaries is understandable for intellectual property rights in the narrow sense (Art.8), because of their still-close association with a state's exercise of its sovereign powers, and the effects they may have on public welfare and the national economy. Likewise for acts of unfair competition, to the extent that markets, consumers, and competitors at large are affected. But if I am right, the typical action for the protection of trade secrets is referred from Art.6 back to Art.4 precisely because only private interests are involved.

It may be noted that both the alternatives expressly rejected by para.1 have centralising tendencies, in contrast to the centrifugal effect of the chosen rule. The places where damage occurs will almost inevitably be far more numerous than that (or those) in which the event giving rise to the damage occurred. Compare Reinwater, [FN42] in which the discharge of a mine in Alsace polluted the river Rhine as it flowed through Germany, France and the Netherlands; or Shevill v Presse Alliance, [FN43] in which a newspaper item published in Paris had the potential to defame the plaintiff not only in France, but in Yorkshire, and wherever else it was read. Conversely, if it had been permissible to invoke consequential economic loss then there would have been a route to applying the law of the claimant's place of establishment to non-contractual liability on a uniform and universal basis--an uncompromisingly claimant-friendly solution no doubt, but a simple and workable one.

The 2003 Explanatory Memorandum of the Commission expressly rejected such a victim-centred approach, and confirmed that fragmentation of causes of action between several applicable laws was an accepted and intended consequence of the para.1 rule [FN44]:
"The rule entails, where damage is sustained in several countries, that the laws of all the countries concerned will have to be applied on a distributive basis, applying what is known as 'Mosaikbetrachtung' in German law."
The exclusion of economic loss from consideration is, however, entirely consistent with the jurisprudence of the ECJ under the Brussels Convention and the Jurisdiction Regulation, [FN45] and with the decision of *314 the Court of Appeal in the Kitechnology case, [FN46] which specifically related to trade secrets.

Damage and the problem of Mosaikbetrachtung

Fragmentation of causes of action may therefore be unavoidable if Art.4(1) applies, but what makes it worse, is that of all candidates for the status of intellectual property rights, trade secrets are among the least harmonised, whether on a global or European scale. It is not even self-evident that the Paris Convention applies to trade secrets, but to the extent that it does, its only relevant provisions are the principle of national treatment under Art.2, and the vague admonitions of Art.10bis. The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) Art.39 (which assumes that the Paris Convention does apply) mandates protection for "undisclosed information", but still in rather general terms. The European Community briefly looked at including trade secret law in its harmonisation programme for unfair competition law in 1972, and rapidly backed away. [FN47] The very basis of the law varies widely, even within Europe: part of an integrated market law; a branch of unfair competition law, statutory or extra-statutory; part of criminal law; an instance of general tortious liability; a sui generis tort; an equitable wrong; and so on.

The culminating disaster resulting from the application of para.1 arises from the fact that trade secret protection, when more than one legal system is involved, is ultimately no stronger than the weakest link in the chain. Patents for the same invention benefit from the international principle of mutual independence under Art.4bis of the Paris Convention, so that revocation in one country of the Union has no effect on patents for the same invention elsewhere, but trade secrets have no such international firewall to protect them from rogue judgments. Once a secret has been made public, whether wrongfully or pursuant to some kind of judgment, no matter where in the world, it will for ever have lost that essential "quality of confidence" which justified its protection in the first place. This is not a negotiable question of international res judicata but an incontrovertible fact, which the law can try to avert, but can do nothing to reverse once publication has happened.

In contrast to Art.(4)1, which can result in the application of one applicable law, or many, paras 2 and 3 are intended to have all the claims against a particular defendant determined in their entirety according to a single system of law, which is not necessarily that of the place(s) where the claimant is damnified.

The common personal law

At first sight, the simplest situation of the three covered by Art.4 appears to be that contemplated by para.2, in which both the victim and the tortfeasor (claimant and defendant) have their habitual residence in the same country. In that case, the law of that country is to apply, as the lex domicilii communis. [FN48] In many cases this situation might barely seem to call for a rule of private international law at all, [FN49] but it deserves its description as such, its Latin tag, and its status as an exception from para.1 because of the existence of cases in which either or both of the places where the harmful event occurred, or the place(s) where damage was suffered, differ from that of the common domicile.

Beneath its apparent simplicity, however, the rule is likely to give rise to some difficult and potentially important complications in trade secret cases. Take the typical and apparently simple case of an employee misappropriating a trade secret from their employer in England and then absconding to a foreign country where they sell the secret information to a competitor. If we can take the original "theft" of the information as damaging per se, then a wrongful and harmful act would have been committed in England at a time when the employee was presumably still habitually resident there, and if Art.4(2) governs then English law would apply, at least to the initial misappropriation.

But what if Kitechnology [FN50] is right in its implications and damage is not considered to occur until some later point in time, such as when the secret information is offered to a competitor, or is actually disclosed, or is put to use, or when products embodying it reach the market? Provided the employee still has their habitual residence in England then no problem arises: in deliberate contrast to para.1, the para.2 rule pays no attention at all to where any damage occurs. Provided the parties are both habitually resident in the same country when the damage occurs, then it does not matter if the damage is suffered there, or somewhere else entirely. What does matter crucially, though, is whether the employee was still "habitually resident" in England at the time the damage occurred.

In the present case that leaves us with an almost insoluble triple conundrum: at what point in time did damage to the employer (in a legally relevant sense) occur; did the employee change their habitual residence by leaving the country; and if so, when did the change to their habitual residence take effect? These are precisely the kind of issues which are likely to arise in a trade secret case of this kind, and in order simply to identify the applicable law we must first of all answer no fewer than three sets of interlocking, factually intensive, and legally troublesome questions. But that is only the beginning, since if the employee succeeded in changing their habitual residence after the wrongdoing began, but before it ceased to cause damage, then we would apparently have to go on to ask whether a different rule to that of para.2 was to be applied to the later occurrences of damage as compared to the earlier ones, quite possibly identifying different systems of applicable law altogether.

Despite its status as an exception to the rule in para.1, para.2 appears from its terms to be mandatory if its *315 facts are present, no matter that Art.4(1) might seem to provide a more appropriate rule. This mandatory character is subject to two qualifications. First, that although one is forbidden to go back to para.1, one may still go forward to para.3 and apply its "escape clause" in preference to the rule of para.1 and the exception of para.2 alike. The second qualification is unique to unfair competition actions--including that for the protection of trade secrets--insofar as the same factors which might incline one to apply Art.4(1) in preference to Art.4(2) might also lead to the conclusion that the case fell outside Art.6(2) altogether, so that it should always have been governed by the rule of Art.6(1). That rule may be more than just a "clarification" of Art.4(1), as Recital 21 asserts, but it is closer to it in spirit than to Art.4(2).

Although the para.2 rule is beneficial in providing for the whole claim against one defendant to be governed by a single system of law on a transnational basis, it is inflexible insofar as any related claims against foreign parties, such as purchasers of the misappropriated information, are more than likely to be governed by different system(s) of applicable law, unless simplicity can be restored by para.3.

The what?, when? and where? of damage

Answers to conundrums such as these (for para.1 as well as 2) depend on a further underlying question, which is whether we are to look to the (hypothetical) applicable law to explain what constitutes "damage", and where and at what point in time damage is incurred, or whether these questions are to be answered on a uniform and autonomous basis according to principles found in or derived from the Regulation itself.

There is an obvious circularity in relying on the applicable law to define what we mean by damage, when identifying the applicable law in the first place may crucially depend on whether, when and where damage has occurred. Recitals 15 to 18 note some of the difficulties which are likely to arise from the possible dissociation of the lex loci delicti commissi from the lex loci damni, when the component factors of the tort are spread over several countries, and Art.2(1) provides that "damage shall cover any consequence arising out of tort ...". So far, all this suggests that the concept of damage is autonomous, and may be more extensive than that recognised in any given legal system. Certainly, such archaic English rules as that of "special damage" in defamation seem to be consigned to history as far as determination of the applicable law is concerned.

Arguably, however, Art.2 goes too far in the opposite direction by substituting the imprecise concept of "consequence" for the over-precise and over-technical "damage". Might a "consequence" of a tort be neutral in its effect on the claimant, or even beneficial? Or is this to fail to distinguish between the tort as a legal concept, whose relevant consequences can only be injurious, and the consequences of the act(s) of which the tort was comprised? Unfortunately, if a uniform and autonomous solution is implied by the recitals and Art.2(1), then substituting "consequence" for "damage" does not go very far to tell us what that solution is.

The contrary argument is that we are told at Art.15(c) of the Rome II Regulation that it is the applicable law which determines "the existence, the nature, and the assessment" of damage. This seems to contradict the case for an autonomous reading of "damage" as synonymous with "consequence", though it is more than arguable from the context that Art.15(c) addresses only issues of compensation and the measure of damages. However, in the context of jurisdiction under the Brussels Convention, Shevill v Presse Alliance [FN51] tells us that:
"The criteria for assessing whether the event in question is harmful and the evidence required of the existence and extent of the harm alleged by the victim of the defamation are not governed by the Convention but by the substantive law determined by the national conflict of laws rules of the court seised, provided that the effectiveness of the Convention is not thereby impaired".
Once again, this is inconclusive, because it would not be the only example of the Rome II Regulation taking a different approach to the Brussels Convention.

The proper law of the tort

Next and last in the alternatives contemplated by Art.4 comes para.3, identifying the applicable law with the so-called "proper law" of the tort. Article 4(3) provides, in derogation from paras 1 and 2, that where it is clear that the tort is "manifestly" more closely connected with another country, then the law of that other country shall apply. One consequence of this might be to enable the court seized of a bundle of claims to apply its own law to all of them, with obvious practical advantages all round. Article 6(3)(b) and Recital 22 expressly make this desirable state of affairs achievable in antitrust actions, but the provision is inapplicable to actions for ordinary unfair competition, and the coincidence of jurisdiction and applicable law in trade secret actions remains just that, a coincidence. [FN52] Still, having all one's claims against a single defendant governed by a single system of applicable law, albeit a different one to the lex fori, is a marked improvement over the potential for fragmentation inherent in Art.4(1). It would be even closer to ideal if all one's claims against multiple defendants could be governed by a common system of law, but that may be beyond the power of para.3 to deliver.

The most important aspect of para.3 in the present context is likely to be the final sentence, which contemplates that such a connection might be based on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort in question. Breach of confidence almost ex hypothesi assumes a relevant pre-existing relationship, since (except in cases of industrial espionage and the like) a relationship of trust, strengthened perhaps by ties of legal obligation, is the necessary pre-condition *316 to confidences being imparted in the first place. It is precisely because of the central importance of such relationships that breach of confidence is treated as a matter of equitable liability in English law, and not as a tort.

In trade secret cases, then, there is very likely to be an underlying contract of some sort, although the protection it provides for the secret information may be incomplete, inadequate or even non-existent. At one extreme, a know-how licence, a confidential disclosure agreement, or a technology transfer agreement are all examples of agreements for which breaches of confidence actionable in equity would almost certainly amount to breaches of contract. The applicable law for the contractual claims would be governed (for the time being) by the Rome (Contracts) Convention of 1980, and in any well-drafted agreement there would be an express choice-of-law clause, with an express choice-of-court clause to match. There might still be reasons for pursuing non-contractual as well as contractual claims, even against contracting parties, and in that case Art.4(3) of the Rome II Regulation (combined with Art.10(1) as necessary) would justify applying the applicable law of the contract to the totality of the parties' civil law relationship, whether contractual, tortious, equitable, or restitutionary. The advantages of this approach can hardly be exaggerated. Not only does it avoid the problems of claims in tort and contract being governed by different applicable laws, but it also avoids the situation of the tortious causes of action fragmenting along national boundaries, as would otherwise happen under Art.4(1), with a different applicable law for each.

More generally, para.3 might apply where there was a relevant pre-existing contractual relationship of another kind, such as an agency or manufacturing agreement, [FN53] even if the beach of confidence did not involve any contract terms; or even where the pre-existing relationship was not contractual, since the paragraph seems to contemplate contract merely as a paradigm for pre-existing relationships in general. A particularly important instance might be where the claimant had a relevant contractual relationship with one or more companies in an economic group, and it could be said that other companies in the group were engaged in the same underlying relationship, even if they were not formally parties to the contract. This is a typical and important situation in trade secret cases, since it is obviously to the advantage of the wrongdoer to hide its defaults behind an apparently independent frontcompany, but the application of para.3 is speculative to facts such as these for the time being.

In all cases, the question comes back to that of whether the non-contractual claim is manifestly so closely connected with a pre-existing relationship as to justify the choice of the system of law corresponding to that relationship, in preference to those identified by paras 1 or 2. It may be noted that the relevant primary connection is that between the tort and a particular country, with a close connection between the tort and a pre-existing relationship merely exemplifying this. It follows, for instance, that a connection between the relationship and the tort which was not sufficiently close to be conclusive on its own could be strengthened by the invocation of other connections between the tort and that country, or weakened by connections with others.

Conversely, factors which merely connect a person or situation to a particular system of law do not appear to be relevant to Art.4(3), except insofar as the same factors link the tort as such to a particular country. In the case of multiple defendants engaged in the same wrongful conduct and potentially liable for their part in a single tort (joint tortfeasors), the fact that para.3 directs attention to the connection between the tort and a particular country is welcome, since it would result in one and the same system of applicable law applying to all tortfeasors, regardless of their individual nationalities, or the closeness or remoteness of their individual connections with the relevant country. However, where several, independent torts were in issue, each would have to be evaluated separately.

A point to watch is that for states (which of course need not be Member States) which comprise several territorial units, each with its own relevant laws of non-contractual liability, each such unit is to be treated as a separate "country" for the purposes of the Regulation: Art.25(1).

The preferred solution is Article 4(3)

Of all the Art.4 scenarios, that of para.3 is to be preferred from all practical points of view, and that of para.1 is to be deplored. Unfortunately for litigants, when para.3 applies it is as a second-level exception to the more general rule of para.1, and its preconditions seem intended to put it as far out of reach as language allows:
"... when it is clear, from all the circumstances of the case, that the tort/delict is manifestly more connected... A manifestly closer connection..."
It is not permissible simply to jump straight to Art.4(3) in the hope that the applicable law it specifies will be familiar or convenient. As the Commission stated in its 2003 Explanatory Memorandum [FN54]:
"Since this clause generates a degree of unforeseeability as to the law that will be applicable, it must remain exceptional. Experience with the Rome Convention, which begins by setting out presumptions, has shown that the courts in some Member States tend to begin in fact with the exception clause and seek the law that best meets the proximity criterion, rather than starting from these presumptions. That is why the rules in Article 3(1) and (2) of the proposed Regulation are drafted in the form of rules and not of mere presumptions. To make clear that the exception clause really must be exceptional, paragraph 3 requires the obligation to be "manifestly more closely connected" with another country.
Paragraph 3 then allows the court to be guided, for example, by the fact that the parties are already bound by a pre-existing relationship. This is a factor that can be taken into account to determine whether there is a *317 manifestly closer connection with a country other than the one designated by the strict rules. But the law applicable to the pre-existing relationship does not apply automatically, and the court enjoys a degree of discretion to decide whether there is a significant connection between the non-contractual obligations and the law applicable to the pre-existing relationship."
More helpfully, the Commission did at least acknowledge that there need not be a subsisting contract for the exception to apply, and it identified one situation which is very common in trade secret cases [FN55]:
"[T]he text is flexible enough to allow the court to take account of a contractual relationship that is still only contemplated, as in the case of the breakdown of negotiations....".
It is contrary to all good practice to disclose confidential information during negotiations without insisting on a separate confidential disclosure agreement, but that is not to say it never happens.

Since the rule of Art.4(1) would be disastrous in practice, and since that of para.2 will only apply infrequently between competitors in truly international situations, it is to be hoped that the language of para.3 will not prove too much of a deterrent to its application, and that it will be accepted as an equally valid alternative to, and not merely as a derogation from or exception to, the other two paras of Art.4. The logical relationship between Arts 4 and 6 in unfair competition actions of only bilateral relevance would be frustrated if the reference from Art.6 back to Art.4 simply resulted in the same system of law being made applicable as the lex loci damni under Art.4(1), as would have applied under Art.6(1), had the latter not been disapplied by Art.6(2). The Commission's 2003 proposals clearly contemplated nothing of the sort, since the corresponding provision expressly provided that when an act of unfair competition exclusively affected the interests of a specific competitor, then paras 2 and 3 of the "general rule" were to apply.

Unfortunately, it must be admitted that the structure of Art.4, the language of para.3, and the commentary in Recital 18 all point in the opposite direction. However, these are all concerned with tortious liability in its most general aspects, and none of them directly address the specific problems of trade secrets as an aspect of unfair competition. All the same, it is ironic that in the final text of the Regulation the legislator should have taken pains to put Art.6 on an equal standing with Art.4, but should apparently have ignored the internal hierarchy of the latter.

Some further points

Before concluding, a handful of relatively minor points remain to be covered, which is not to say that the third, at least, might not present significant difficulties in practice, especially when combined with the corresponding restrictive rules as to jurisdiction over employer-employee claims.

Quia timet actions

The Regulation expressly applies to events and non-contractual obligations that are "likely to occur" (Arts 2(2), 2(3)(a) and (b)), but this is of little assistance when one does not know where or when the event giving rise to the liability will take place, whether in fact, or in the contemplation of the relevant body of law. Worse still, the time and place of the first, or principal, harmful event may be under the control of the intending wrongdoer. [FN56]

Habitual residence undefined

Nor does the Regulation define habitual residence for private individuals in their capacity as such, or tell us whether it is an autonomous concept, or one which is referred to national law. "Habitual residence" was not further elucidated in the 2003 Explanatory Memorandum, except by reference to the Rome (Contracts) Convention, and to note that it was "more flexible" than domicile, which seems a decidedly mixed blessing in the present context. Except for acknowledging a minor problem with celebrities ("it is not always easy to ascertain the habitual residence of a celebrity"), the Commission seemed to think that the concept of habitual residence was sufficiently simple and self-evident not to require further explanation. [FN57]

Employees

Trade secret cases frequently involve disloyal employees as well as competitors, since the competitor in their capacity as such is unlikely to have any access to the trade secrets, and a single dishonest employee operating on their own typically has no way of exploiting their privileged access to their employer's secret information, except by selling it to a business in the same field. [FN58] However, unlike the Jurisdiction Regulation and the Rome (Contracts) Convention, the Rome II Regulation does not contain any special provisions for the employer-employee relationship. Article 4(2) is particularly likely to apply on the facts, but unfortunately this may result in claims against the employee and the competitor being governed by different bodies of applicable law. Unless *318 Art.4(3) operates to apply the same applicable law to both kinds of defendant in respect of all their wrongful acts, there seems to be no avoiding this.

The application of Art.4(3) itself is amatter of judicial discretion, and courts may be particularly reluctant to submit an employee to the unfamiliar burdens of a retrospectively-ascertained foreign law, with which they personally have little or no connection. Since the whole of the claim against the employee would otherwise very probably be governed on a uniform basis by the law of their habitual residence, according to Art.4(2), there would be no compensating procedural advantages for the employee in applying Art.4(3) in its place if the latter resulted in the application of a different system of law.

Another point to note with regard to employees is that the terms of Art.14 of the Rome II Regulation apparently operate to prevent them from binding themselves ex ante as to the law applicable to future non-contractual liabilities. The law applicable to contracts of employment is governed by the Rome Convention, Art.6. Freedom of contract is recognised, except that the employee is protected from opting out of any mandatory provisions of the law which would otherwise have been applicable. However, according to Art.20(1) of the Jurisdiction Regulation, an employer may bring proceedings only in the courts of the Member State in which the employee is domiciled, probably meaning (in practice) that any available non-contractual claims against defaulting employees, whether for breach of confidence per se, or for breach of fiduciary duty, will assume greater importance. [FN59]

Unjust enrichment

Returning to the Rome II Regulation, although Art.4 applies in terms only to non-contractual obligations arising out of torts (delicts), Art.10(1) provides that where a non-contractual obligation arising out of unjust enrichment (a restitutionary obligation) concerns a relationship, such as contract or tort, existing between the parties, and which is closely connected with the unjust enrichment, it shall be governed by the law that governs that other relationship. This enacts the familiar principle that the applicable law for restitution for wrongs is that of the underlying wrong, and not that arising under any special rules for unjust enrichment in general. The practical consequence in trade secret cases is likely to be that the applicable law of any restitutionary aspects of the case, whether as free-standing claims, or by way of remedies, will be governed either by the applicable law of any contract, or by the applicable law(s) of the tort, identified by the application of Art.4. Unfortunately, Art.10 does not deal expressly with the case in which the restitutionary claim is associated with claims in both contract and tort: presumably one asks which the closer connection is, but does one also ask which of the contract and tort claims is more important?

An integrated approach to jurisdiction and applicable law?

This pair of articles began with the question of whether misuse of trade secrets was a "tort" for the purposes of Art.5(3) of the Jurisdiction Regulation. The previous article argued that it was, principally by reference to English case law on the application of the Jurisdiction Regulation to equitable wrongs. The present article has argued at length that for the purposes of the applicable law under the Rome II Regulation, trade secret abuse is an act of unfair competition, and as such is governed by the tort provisions of the latter. So is the characterisation of the action as tortious under either one of these regulations, confirmed, or at least supported, by a similar characterisation under the other?

Unfortunately, the question is not quite as simple as that. Insofar as a term has a defined or established meaning under the earlier Jurisdiction Regulation (or, a fortiori, under the Brussels Convention before that), then it is indeed very likely that the meaning will have been carried over into the Rome II Regulation, unless the contrary intention is clear. However, it can hardly be said, as a matter of European law, that Art.5(3) of the Jurisdiction Regulation necessarily and incontrovertibly covers any strictly non-tortious causes of action, and there is no reason to suppose that the Rome II Regulation was ever intended to preserve merely national idiosyncrasies. Moreover, there are numerous respects in which the Rome II Regulation quite intentionally parts company with the Jurisdiction Regulation, whether in language, policy, or both. One might mention the relevance of habitual residence instead of domicile; the significance given to the lex loci damni instead of the lex loci delicit commissi; the apparently autonomous concept of "damage"; separate and express treatment of restitutionary claims; a single set of rules for all kinds of (proprietary) intellectual property rights, registered or unregistered; and of course the existence of special rules for unfair competition. All of these underline the dangers of reasoning backwards from the conclusion that misuse of trade secrets is a tort for the purposes of the Rome II Regulation, to support the rather more tentative conclusion that it is (and always has been) a tort for the Jurisdiction Regulation.

This is not to say that the lessons of the Rome II Regulation are wholly inapplicable to the Jurisdiction Regulation. Clearly, it would be enormously convenient if the same question could be answered the same way under both Regulations, and it is to be hoped that practical convenience will more than occasionally prevail over the scholastic logic-chopping which the Court of Justice has tended to favour in dealing with issues of jurisdiction. Not just convenient, but just too convenient, since claimants and defendants alike are ill-served by any mismatch between jurisdiction and applicable law; and more especially by the profusion of fragmented claims in multiple fora, which the Court appears to view with blithe equanimity. Secondly, reference to national law across the Community as a whole [FN60] is a legitimate part of the exercise of defining *319 the autonomous Community meaning of a term such as "tort", or "unfair competition"; and any such comparative exercise would almost certainly confirm that unfair competition (whatever that may mean) is universally regarded as a tort, and that trade secret misuse is frequently regarded as an aspect of unfair competition. Finally, now that the category of unfair competition has found express legislative recognition in one instrument, it will be harder to ignore its relevance to others, especially when they are related. Factors such as these support the case for treating trade secret misuse as a tort under the Jurisdiction Regulation, but they do not make the issue a foregone conclusion.

Conclusion

For a common lawyer, applying the Rome II Regulation to trade secret cases is rather like playing a computer game in which one fights one's way past legions of opponents and scores of distractions, up through successive levels of ever-increasing difficulty, suppressing all but the most Hobbesian of one's human instincts, and erasing from one's mind virtually everything one has ever learned in an attempt to align one's mentality with the warped and malevolent genius of the game's designer. Only at the final level, as one hopefully approaches the haven of comparative sanity which is Art.4(3), does one apparently have a chance to relax, and of course it is precisely at that point in the game that one must be at one's most alert if one is to survive the final and most cunningly hidden pitfalls, and reach the aptly named "escape clause" with body and mind unscarred. In life, as in the game, further challenges await, for which I hope the present article will have provided a useful (if protracted) initiation.

FN MA, PhD (Cantab.). Reader, Norwich Law School, University of East Anglia.

FN1. Regulation 44/2001 of December 22, 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2001] OJ L12/1.

FN2. Cambridge: March 17, 2007.

FN3. Regulation 864/2007 of the European Parliament and of the Council of July 11, 2007 on the law applicable to non-contractual obligations (Rome II Regulation) [2007] OJ L199/40.

FN4. The Regulation comes into force on January 11, 2009 (Art.32); and applies to events giving rise to damage which occur after then (Art.31).

FN5. Rome II Regulation, Art.1.

FN6. Article 1(4).

FN7. Recital 8.

FN8. Article 3.

FN9. For exceptions generally see Art.1(1), with specific instances in Art.1(2).

FN10. Article 1(1).

FN11. R. v Licensing Authority Ex p. Smith Kline & French Laboratories Ltd (No.1) [1990] 1 A.C. 64, HL. The application of the Regulation to cases such as Attorney General v Guardian Newspapers Ltd (No 2) (Spycatcher) [1990] 1 A.C. 109, HL is more controversial, but outside the scope of the present article.

FN12. Douglas v Hello! (No.3) sub. nom. OBG Ltd v Allen [2007] UKHL 21, [2007] E.M.L.R. 12.

FN13. Though the rights of Michael Douglas and Catherine Zeta Jones, in their private and personal capacity, would presumably have fallen within Art.2(g), the same cannot necessarily be said for the rights of OK!, which received entirely separate treatment as ordinary commercially confidential information. However, the House of Lords' categorisation of the rights of action as (personal) privacy-based or (commercial) confidence-based cannot necessarily be assumed to correspond precisely to that under the Regulation.

FN14. Article 6(3)(b).

FN15. Subject, in the case of injunctions and the like, to a kind of double-actionability rule, insofar as the court can only grant remedies known to its own code of procedure: Art.15(d).

FN16. Article 15(a) to (g).

FN17. Article 1(3).

FN18. Article 22(1).

FN19. In contrast to jurisdiction (where a special jurisdiction may either exclude the general rule, or constitute an alternative to it), there can be only one applicable law for a given cause of action, and special rules such as Art.6 necessarily preclude the application of Art.4 in the situations to which they relate. Conversely, multiple causes of action, each with its own applicable law, may be subject to a single jurisdiction.

FN20. Paragraph 3, providing two options in the case of private enforcement of competition (antitrust) law, is omitted. Paragraph 4 prohibits consensual derogations from any of the Art.3 regimes.

FN21. In this article, as in its predecessor, terms such as "proprietor" and "owner" are used in relation to trade secrets for convenience only, and not so as to imply that trade secrets are property in any relevant sense.

FN22. There are numerous examples in the context of the Brussels Convention. A candidate for the status of locus classicus might be Jakob Handte & Co GmbH v Traitements Mécano-Chimiques des Surfaces SA (TMCS) (C-26/91) [1992] E.C.R. I-3967.

FN23. Proposal for a Regulation of the European Parliament and the Council on the Law Applicable to Non-Contractual Obligations ("Rome II"); Brussels, COM(2003) 427 final.

FN24. COM(2003) 427 final, draft Art.5, p.34. In this and subsequent historical extracts, Article numbers have been updated to correspond to the Regulation as adopted.

FN25. COM(2003) 427 final, p.15.

FN26. COM(2003) 427 final, p.15.

FN27. COM(2003) 427 final, p.6.

FN28. The House of Lords produced a lengthy and detailed critique of the legislative proposals, without much visible effect: House of Lords, European Union Committee. 8th Report of Session 2003-4, The Rome II Regulation.The Stationery Office, 2004. HC Paper No.66.

FN29. European Group for Private International Law (GEDIP), Proposal for a European Convention on the law applicable to non-contractual obligations (Draft). The Hague, 1997; GEDIP, Proposal for a European Convention on the law applicable to non-contractual obligations (Final). Luxembourg, 1998. Both are available from http://www.gedip-egpil.eu/gedip documents.html [Accessed May 27, 2008].

FN30. GEDIP, Commentaire concernant la proposition pour une convention européenne sur la loi applicable aux obligations non contractuelles. Luxembourg, 1998 This is available from http://www.gedip-egpil.eu/gedip documents.html. It is only available in French. See also the treatment of unfair competition in the minutes of the relevant Venice (1996), Hague, Luxembourg and Paris (2002) conferences at http://www.gedip-egpil.eu/gedip reunions.html [Accessed May 27, 2008].

FN31. http://register.consilium.europa.eu/pdf/en/99/st11/11982en9.pdf [Accessed May 27, 2008].

FN32. COM(2003) 427 final.

FN33. Directive 2005/29 of the European Parliament and of the Council of May 11, 2005 concerning unfair business-to-consumer practices in the internal market (etc), (the "Unfair Commercial Practices Directive") [2005] OJ L149/22.

FN34. See COM(2006) 83 Final and COM(2006) 566 final. The drafting history at this stage is complicated, but for present purposes had little influence on the final result, which in this respect (as in others) reverted to the 2003 proposal. For the relationship between the Unfair Commercial Practices Directive and unfair competition law, see C. M. Wadlow, "The case for reclaiming European unfair competition law from Europe's consumer lawyers" in Stephen Weatherill and Ulf Bernitz (eds), The Regulation of Unfair Commercial Practices under EC Directive 2005/29--New Rules and New Techniques (Oxford: Hart Publishing, 2007).

FN35. Compare the pre-Rome II case Kitechnology BV v Unicor GmbH Plastmaschinen [1995] F.S.R. 763; [1994] I.L.Pr. 568, CA.

FN36. I interpret Art.6(4) as ceasing to apply once the redirection effected by Art.6(2) has taken effect. If the dispute is a purely bilateral one between private parties in which no state or public interest is involved, then what interest does the Community have in preventing the parties choosing their own applicable law?

FN37. Rome II Regulation, Recital 11.

FN38. Article 2(1).

FN39. Article 23(1). There is special provision for harmful events arising out of the operation of a "branch, agency, or any other establishment", in which case the location of the branch, etc, is deemed to be the place of habitual residence. Individuals who are in business on their own account have a deemed habitual residence at their principal place of business: Art.23(2).

FN40. There are numerous examples in the context of the Brussels Convention. A candidate for the status of locus classicus might be fakob Handte & Co [1992] E.C.R. I-3967. Although "escape clauses", eo nomine, have yet to receive express comment from the ECJ, it may be noted that those very words were accepted by Alber A.G. as appropriate to describe Art.27 of the Brussels Convention 1968 in Régie nationale des usines Renault SA v Maxicar SpA and Orazio Formento (C-38/98) [2000] E.C.R. I-2973 at [37]; and the Court did not hesitate to apply the principle of restrictive interpretation to the Article: [26].

FN41. See the previous article of this pair, "Bugs, Spies and Paparazzi: Jurisdiction over Actions for Breach of Confidence in Private International Law" [2008] 30 E.I.P.R. 269.

FN42. Handelswekerij GJ Bier BV and Stichtung Reinwater (The Reinwater Foundation) v Mines de Potasse d'Alsace SA (4320/74) [1979] E.C.C. 206.

FN43. Shevill v Presse Alliance (C-68/93) [1995] E.C.R. I-415. This case and Reinwater are the two leading cases on the tort provisions of the 1968 Brussels Convention on Jurisdiction and Judgments.

FN44. COM(2003) 427 final at p.11.

FN45. Dumez v Hessische Landesbank (220/88) [1990] E.C.R. I-49 and Marinari v Lloyd's Bank Plc (C-364/93) [1995] E.C.R. I-2719.

FN46. Kitechnology [1995] F.S.R. 763.

FN47. See C. M. Wadlow, "Unfair competition in Community law: Part 1: the age of the 'classical model"' [2006] E.I.P.R. 28(8) 433 at fn.77. This was several years before the Commission gave up hope of harmonising unfair competition laws in general.

FN48. One must take care not to be misled by the Latin. Article 4(2) depends on habitual residence, not domicile.

FN49. If no conflict of laws arises at all, then by Art.1(1), the Rome II Regulation is wholly inapplicable.

FN50. Kitechnology [1995] F.S.R. 763.

FN51. Shevill v Presse Alliance [1995] E.C.R. I-415.

FN52. I take it as probable from the internal structure of Art.3 that the seizure-based rule of Art.3(3)(b) applies only to private actions in respect of civilly-actionable restrictions on competition (though the latter seems to be extended to abuses of a dominant position by Recital 23).

FN53. Such as that in Saltman Engineering Co v Campbell Engineering Co (1948) 65 R.P.C. 203, CA.

FN54. COM(2003) 427 final at p.12. The passage is referring to the practice of English courts under Art.4(5) of the Rome Convention 1980, which likewise provides a last-ditch opportunity to escape from the arbitrary rigidities and occasional absurdities of that regime.

FN55. COM(2003) 427 final at p.12. The Regulation expressly applies to liability under the German principle of culpa in contrahendo, under which liability can arise in contemplation of the formation of a contract: Recitals 29 and 30; Art.12.

FN56. Fortunately, in this instance, the wrongdoer may have less than total control over the place(s) where damage occurs, which is the determining factor under Art.4(1), but even the latter may be subject to manipulation for tactical advantage, at least in the short term.

FN57. COM(2003) 427 final at p.18. At that time, actions for invasion of privacy were included in the draft Regulation, and a previous proposal had been for the law of the victim's habitual residence to apply. Had the Commission thought a little longer, it might have occurred to them that celebrities and non-celebrities alike have most reason to go missing when they had just incurred, or were about to incur, a serious legal liability, which is precisely the time when one most needs to know their habitual residence with certainty.

FN58. German law has no hesitation in imposing liability on disloyal employees under the law of "unfair competition", whether or not the employee(s) in question were planning on joining a competing business or setting up on their own account. See the Gesetz gegen den unlauteren Wettbewerb 2004 (UWG), ss.17- 19.

FN59. Unless Art.20(1) is given an expansive interpretation. The heading of s.5, "Jurisdiction over individual contracts of employment", and the position of Art.18, both suggest that Art.20(1) is confined to contractual claims, but this cannot entirely be taken for granted.

FN60. Or perhaps more widely than that since the Regulation is of "universal", which is to say worldwide, application.