Circular by Design? Rethinking Trade Secret Protection and Data Governance in the EU Circular Economy

Abstract

The European Union has embraced the circular economy as a cornerstone of its transition toward climate neutrality and long-term resource efficiency. This paper, however, argues that the promise of circularity is undermined by the structural misalignment between environmental policy objectives and the legal frameworks governing intellectual property rights (IPRs) and data governance. While recent measures such as the Ecodesign for Sustainable Products Regulation (ESPR), the Right to Repair Directive (R2R), and the Data Act introduce mechanisms for data sharing, design transparency, and repairability, their effectiveness is constrained by entrenched logics of exclusivity and secrecy. In particular, trade secret protection – potentially indefinite and broadly defined – remains a systemic barrier to information flows that are indispensable for repair, reuse, remanufacturing, and interoperability. The paper advances the concepts of “circular IPRs” and “circular data” to reframe these regimes as mutually reinforcing pillars of a legal order capable of sustaining circularity. It contends that realizing the EU’s circular ambitions requires a paradigm shift: from exclusivity and secrecy toward openness and collaboration and from proprietary control toward infrastructural access and circularity. By aligning IPR reform and data regulation around openness, collaboration, and ecological imperatives, the EU can build the legal foundations for truly circular innovation.