Protecting Healthcare Know-How and IP in the Czech Republic: Key Steps

Healthcare providers in the Czech Republic retain and develop valuable know-how, diagnostic procedures, and clinical expertise. These assets represent a competitive advantage and key property that must be effectively protected. In this article, you will learn how to minimise the risks of information leakage and ensure effective protection of your organisation’s intellectual property.

Quick summary

• Healthcare data and procedures are assets: The know-how of healthcare providers includes diagnostic procedures, clinical algorithms, patient databases, and business processes. These values must be protected both legally and technically under Czech law.
• Legal and technical measures are essential: A combination of contracts, internal policies, access-rights management, and cybersecurity creates effective protection and  also brings additional regulatory obligations in the Czech Republic.
• Employees and the human factor: A significant portion of know-how leaks is caused by employees or former collaborators. Properly drafted employment contracts, confidentiality obligations, and training are key.
• Regulatory threats are real: Failure to comply with obligations to protect data and know-how can lead to substantial fines under Czech and EU rules.

Why know-how protection is crucial for healthcare providers

A healthcare facility is not just a building with equipment and staff. It is an organisation that continuously creates and accumulates valuable information about patients, diagnostic methods, treatment procedures, and organisational processes. This know-how forms the core of competitiveness and is an intangible asset that must be protected in the Czech legal system.

The problem is that, unlike patents or trademarks, know-how does not have to be registered with an authority. Protection arises “automatically”, but only if the organisation adopts and maintains appropriate confidentiality measures. Without active protection, know-how is easily lost and ceases to be legally protected under Czech law.

The attorneys at ARROWS advokátní kancelář often see situations where healthcare providers underestimated this issue and subsequently had to deal with leaks of valuable data. Know-how protection is not merely a legal formality, but a strategic investment in the security and value of your organisation in the Czech Republic.

Legal framework for intellectual property protection in the Czech Republic

Intellectual property protection in the Czech Republic is based on several legal regulations. The basic framework is provided by Act No. 89/2012 Coll., the Civil Code, which defines trade secrets and regulates protection against unfair competition under Czech law.

The Czech legal system therefore provides know-how owners with tools to defend against its unauthorised acquisition, use, or disclosure. Following EU legislation, protection of undisclosed know-how and business information has been harmonised.

Another important legal instrument is the General Data Protection Regulation (GDPR). In the context of a healthcare provider in the Czech Republic, these rules are particularly strict because health data falls into a special category of personal data.

What is know-how and a trade secret

A trade secret, which typically also includes know-how, is defined in the Czech Civil Code. For information to be protected, it must meet the following criteria:

1. Competitive significance: It concerns facts that are competitively significant, identifiable, and measurable in value.

2. Not commonly available: They are not commonly available in the relevant business circles.

3. Intention to keep confidential: The owner keeps these facts confidential in an appropriate manner.

In the context of a healthcare provider, this concerns specific procedures for diagnosis, treatment, process organisation, or software solutions that are not publicly known. Know-how in the narrower sense is understood as a set of practical, non-patented information that is secret, substantial, and identified.

The right to a trade secret provides protection against unlawful conduct, not a monopoly like a patent. If someone else arrives at the same information through independent development, they may use it.

An interesting feature of know-how is that, unlike patents, it has an unlimited term of protection as long as its defining characteristics continue to exist under Czech law.

Patents and industrial rights in healthcare

For healthcare providers, the issue of patents or utility models is also relevant. A patent grants the right to exclude others from commercially exploiting an invention for a limited period from the filing date. In the field of medical technologies, patents are important.

The key difference is that a patent requires registration and disclosure of the invention’s details, which means losing secrecy in exchange for a monopoly. In practice, it is often the case that if an invention can be easily reverse-engineered, it is better to patent it. If it is a process that can be kept confidential, protection in the form of a trade secret may be more advantageous under Czech legislation.

Strategic decisions on protection must precede any public communication. Once information is disclosed, it can no longer be patented and also ceases to be a trade secret.

Practical steps to protect know-how in a healthcare facility

Given the nature of healthcare work performed by dozens of people, protecting know-how in practice is challenging. Every healthcare professional comes into contact with information that should not leave the facility.

The attorneys at ARROWS advokátní kancelář routinely prepare comprehensive protection strategies for clients in the healthcare sector in the Czech Republic. Below we set out the most important practical measures.

Internal organisational measures and internal regulations

Czech laws require that the organisation itself adopts reasonable confidentiality measures. If you do not have them, a Czech court will not grant you trade secret protection. Specifically, this means implementing:

• A system of internal policies: A clear definition of what is considered a trade secret.
• Access management: Only persons who need sensitive data to perform their work should have access.
• Control mechanisms: Regular audits of access to medical records and systems.
• Physical and digital security: Locking archives, securing servers, disk encryption.

Important note: The policies must be demonstrably communicated to employees and enforced in practice. A “dead” document in a drawer will not stand up in court in the Czech Republic.

Contractual tools: NDAs, non-compete clauses, and licences

Legal protection of know-how is significantly strengthened by properly drafted contractual arrangements under Czech law.

Confidentiality agreements and employment contracts

Employees have a statutory duty not to act contrary to the employer’s legitimate interests and to maintain confidentiality under Czech law. Nevertheless, it is advisable to specify these obligations in the employment contract or an NDA, in particular by precisely defining what constitutes confidential information.

Under the Czech Labour Code, it is not possible to agree a contractual penalty with an employee for breach of confidentiality, except within a non-compete clause. The employer may claim damages and, where appropriate, terminate the employment relationship. Contractual penalties are enforceable against external suppliers.

Non-compete clause

A non-compete clause is an agreement in which the employee undertakes that, for a certain period after the end of employment, they will not perform gainful activity identical to the employer’s scope of business.

• It must be in writing.
• The employer must provide reasonable financial compensation.
• A contractual penalty may be agreed; upon payment, the employee’s obligation terminates.

Licence agreements and contractors

If a contractor (self-employed individual) creates a copyrighted work for you (e.g., diagnostic software), the author exercises the economic rights to it unless it is contractually agreed that it is a commissioned work for which the healthcare provider exercises the economic rights, or unless an exclusive licence to use it is granted.

Related questions on contractual protection of know-how

1. Can I prohibit an employee from working for a competitor after leaving without paying them? No. A non-compete clause without agreed financial compensation (at least 50% of average earnings under Czech law) is invalid. Without such a clause, a former employee may work anywhere, provided they do not misuse your trade secrets.

2. How can I enforce a breach of confidentiality by an employee?
With an employee, a contractual penalty cannot be applied outside a non-compete clause. You may claim damages under the Czech Labour Code and terminate employment immediately or give notice due to breach of duties.

3. What is the risk if I do not have an NDA with an external supplier?
You risk that the information you provide will not be considered confidential, or that the supplier will keep the results of their work for you and sell them to your competitors as well.

Who can you contact?

Mgr. MUDr. Veronika Králíková

Consultant

• kralikova@arws.cz

Mgr. Dita Zbožínková, LL.M.

associate

• zbozinkova@arws.cz

Data security and cyber protection of know-how

In healthcare, technical security is inseparable from legal protection. Data is stored in hospital information systems and PACS.

GDPR and protection of healthcare data

Healthcare data is a special category of personal data under the GDPR. Organisations must adopt technical measures appropriate to the risk.

• Security: Pseudonymisation and encryption.
• Incident reporting: Incidents affecting personal data must be reported to the Czech Data Protection Authority (ÚOOÚ) within 72 hours.
• Sanctions: Breaches of the GDPR may result in significant administrative fines.

Cybersecurity (NIS 2 and the Czech Cybersecurity Act)

Many healthcare providers are newly classified as providers of a regulated service, subject to higher or lower obligations under the new Czech Cybersecurity Act (NIS 2 transposition).

Attorneys at ARROWS advokátní kancelář provide advice in IT law, assist with compliance under the Czech Cybersecurity Act and the GDPR, and address the legal consequences of cyberattacks in the Czech Republic.

Related questions on the security of healthcare data

1. Must all data be encrypted?
Both the GDPR and cybersecurity standards require an appropriate level of security. For sensitive healthcare data, encryption in transit and at rest is a strongly recommended standard and, in many cases, a necessity.

2. Who is liable for a cyberattack?
If an attack causes damage, the healthcare provider bears primary liability. The statutory body may be liable for failing to ensure sufficient prevention and for breaching the duty of due managerial care under Czech law.

Managing employee know-how and leakage risks

The most common sources of know-how leakage are not external hackers, but employees. Risks include taking data before leaving for a competitor, social engineering, or unauthorised access to documentation.

Employment relationships and “švarcsystém” misclassification risks

Some healthcare providers engage doctors on an invoicing basis even though, in practice, it is dependent work. This so-called “švarcsystém” (misclassification under Czech labour law) creates intellectual property risks.

If a doctor works as a self-employed individual without a proper written contract, they may claim that the know-how and copyrighted works belong to them. For employees, the transfer of rights to the employer is ensured by law in the Czech Republic.

Risk table: Protection of know-how in healthcare

Compliance programme and internal audit

A key prevention tool is a compliance programme. It is a system of internal rules that ensures compliance with legal regulations.

In the context of protecting know-how and data, a compliance programme also serves as a defence (exculpation) in the event of criminal liability of a legal entity under Czech law. If an employee commits a criminal offence, the hospital may also be prosecuted. However, an effective compliance programme can help to avoid liability.

Attorneys at ARROWS advokátní kancelář specialise in implementing effective compliance programmes that are not merely formal documents, but genuinely protect both management and the company in the Czech Republic.

Conclusion of the article

Protecting a healthcare provider’s know-how and intellectual property is a complex process requiring alignment of legal documentation, technical safeguards, and human resources management. In an era of healthcare digitalisation and increasingly strict regulation, passivity is a risk.

The attorneys at ARROWS, a Prague-based law firm, have extensive experience advising healthcare providers—from small outpatient clinics to large hospitals. We will help you set up a system so that your know-how remains secure and you can focus on patient care.

We recommend not postponing a legal audit of your existing protection. ARROWS, a Prague-based law firm, is insured for damages up to CZK 400,000,000, which guarantees the security of our services.

Let’s ensure together that your know-how is truly protected. Contact us at office@arws.cz.

FAQ – Most common legal questions on protecting know-how

1. Do we have to register know-how with any authority for it to be protected?
No. Know-how and trade secrets are not registered anywhere. Protection arises once the statutory conditions are met, in particular confidentiality. It is essential to adopt and comply with organisational and technical measures to protect secrecy.

2. What happens if an employee takes our procedures to a competitor?
You can seek an injunction requiring the competitor to refrain from using this information and claim damages. You may also claim damages against the employee. If you have a valid non-compete clause in place, you can also demand a contractual penalty.

3. What sanctions apply for insufficient cybersecurity?
If you fall under the Czech Cybersecurity Act, you may face high fines or fines calculated as a percentage of turnover. Even without that Act, you may face fines for GDPR breaches. Statutory bodies may face liability for damage caused by a breach of the duty of due managerial care under Czech law.

4. What is the difference between a trade secret and know-how?
A trade secret is a legal category defined in the Czech Civil Code. Know-how is more of a factual term for knowledge and experience. Under Czech law, know-how is typically protected through the legal concept of a trade secret.

5. What is the maximum duration of a non-compete clause?
A non-compete clause may be agreed for a maximum of one year after termination of employment. Any longer duration would be invalid to the extent it exceeds this limit. A condition of validity is the agreement of adequate financial compensation.

Disclaimer: The information contained in this article is for general informational purposes only and serves as a basic guide to the issue. Although we strive for maximum accuracy in the content, legal regulations and their interpretation evolve over time. To verify the current wording of the regulations and their application to your specific situation, it is therefore necessary to contact ARROWS Law Firm directly (office@arws.cz). We accept no responsibility for any damage or complications arising from the independent use of the information in this article without our prior individual legal consultation and expert assessment. Each case requires a tailor-made solution, so please do not hesitate to contact us.

Read also:

• How to Register a Utility Model in the Czech Republic Insights from Patent Attorneys
• GDPR inspections in practice: how investigations by the Office for Personal Data Protection are conducted
• Compliance audits: How to conduct an internal audit before the authorities arrive
• State Labor Inspectorate: What they check first and how to respond