Protecting confidential business information is a critical concern for companies operating in competitive markets. However, a recent decision of the Budapest-Capital Regional Court highlights an important legal reality: in Hungary, a broadly-worded non-disclosure agreement (NDA) alone may not provide sufficient protection for trade secrets. Businesses must go beyond general confidentiality clauses if they wish to successfully enforce their rights in court.
New case law: Budapest – Capital Regional Court No. Gf.40162/2025/5.Gf.40162/2025/5.
The case arose from a cooperation agreement concluded between a customer and a logistics service provider. Under the agreement, the service provider gained access to the customer’s digital systems and business-related information.
The contract contained a broad confidentiality clause, requiring the parties not to disclose or misuse information related to the other party’s organization and operations. The dispute emerged when the customer claimed that the service provider had used confidential price lists and partner data for its own business activities and sought damages for the alleged misuse of trade secrets.
Outcome of the case
Both the first instance and the appellate court rejected the claim.
The courts emphasized that not all business information automatically qualifies as a trade secret. For example, information that is publicly available (such as the identity of business partners) cannot generally be protected as a trade secret. Likewise, general knowledge or professional experience acquired during business does not fall under trade secret protection.
The courts stressed that a claimant must clearly identify the specific information that constitutes the alleged trade secret. In this case, the claimant failed to provide detailed factual allegations about the content of the confidential business plans, market research data, or internal processes that were supposedly misused. Without such precise identification and supporting evidence, the court could not establish that a trade secret existed or that it had been unlawfully used.
The decision also highlights another essential element of trade secret protection: the active role of the rights holder in safeguarding the confidential information.
According to the Hungarian Trade Secrets Act and the underlying EU Trade Secrets Directive, businesses must demonstrate that they have taken concrete measures to preserve secrecy. These may include controlled access to sensitive information, internal confidentiality rules, and clear documentation of how information is shared. A general contractual clause labelling “all information” as confidential is typically insufficient on its own.
Key takeaways
For companies, the practical takeaway is clear. Effective trade secret protection requires more than a standard NDA.
Businesses should carefully identify the specific data, processes, or know-how that qualify as trade secrets and ensure that appropriate organizational and technical safeguards are in place.
A well-structured compliance approach, which means combining precise contractual provisions with internal protective measures, not only strengthens legal protection but also significantly improves the chances of successfully enforcing trade secret rights in litigation.
