The Nvidia-Valeo case reignites attention on trade secrets in the age of AI. A code leak attributed to a former employee raises questions about corporate responsibility, preventive protection, mobile workforce management, and technical, legal, and organizational measures for know-how.

Edited by Ilaria Gargiulo, Partner, and Camilla Pasino, AMTF Lawyers

The protection of trade secrets is emerging as a key issue in the age of AI: the Nvidia-Valeo case shows how a single oversight can generate legal and competitive risks, reinforcing the urgent need for technical, organizational, and contractual measures that are consistent with the regulatory framework.

The Nvidia-Valeo case
A case that emerged in recent weeks, centering on the alleged theft of tens of thousands of confidential technical documents from Nvidia by a former engineer at Valeo, a company specializing in the production of parking sensors for cars, and their subsequent accidental disclosure during a video call with former Valeo colleagues, has shone a spotlight on the vulnerability of industrial know-how.

Valeo claims that this theft of its confidential information and its subsequent use by the engineer in his work at Nvidia gave the latter an unfair competitive advantage, enabling it to secure a contract with Mercedes-Benz and save millions in research costs.

The case, already the subject of proceedings in Germany, has now come to trial in the United States, where the court has asked a jury to determine whether the stolen secrets were actually used in Nvidia's products and, therefore, whether Valeo's evidence in this regard is sufficient.

This issue offers food for thought on the need to properly value and protect industrial knowledge, but also on the risk that changing jobs may entail not only the loss of the wealth of strategic knowledge that employees and collaborators naturally internalize in the course of their work at a company and which they cannot be asked to give up (but at most and to some extent disregard, since they cannot "unlearn" it), but also the actual data and media in which the confidential information is contained.

The dynamics of theft and the revealing video call
The decision made on August 28 by a federal judge in California represents a key step in one of the most sensitive legal disputes for semiconductor giant Nvidia Corporation.

The American company, a world leader in GPUs and now a key player in the artificial intelligence ecosystem, is accused by Valeo Schalter und Sensoren GmbH, the German branch of French multinational Valeo, of having illegally benefited from the use of trade secrets stolen by a former Valeo employee who was subsequently hired by Nvidia following a collaboration between the two companies on their mutual customer Mercedes-Benz.

The casus belli was a video call between the new Nvidia employee and his former colleagues at Valeo, during which the engineer accidentally shared his screen, revealing a source code file with the path "ValeoDocs," clearly identifiable as belonging to his former employer.

According to Valeo, during the transition, the engineer allegedly transferred documents and source codes that were not generally known and belonged to Valeo, which were then used in Nvidia's software development. If proven, this behavior would constitute a serious violation of US trade secret laws, as well as Italian law.

Nvidia's defense strategy and the judge's decision
Nvidia had filed a motion for summary judgment, asking the court to dismiss the charges before the actual trial. The defense strategy was based on three pillars: the "personal" nature of the engineer's conduct, the lack of evidence of actual exploitation of the stolen files, and, finally, the corrective action taken by the company, which subsequently "cleaned" the software of any possible contamination.

However, the judge partially rejected this argument, ruling that there is sufficient evidence to support Valeo's claims, but that it will be up to a jury to decide whether the confidential information was actually incorporated into Nvidia's products. In particular, the documented circumstances carried significant weight: the presence of Valeo files on the employee's laptop, as well as confidential materials posted on the walls of his office at Nvidia. Although not direct evidence, these clues are sufficient to support the accusation and refer the final decision to the jury for evaluation.

The use of secrets and corporate responsibility
An important part of the judge's decision (preliminary to the future jury decision) concerns the fact that Nvidia claims to have removed Valeo's proprietary information from its source code developed by the disloyal employee. However, while Valeo argues that this removal was not complete, the judge ruled that the fact that the changes were subsequently removed does not preclude the initial use of trade secrets, from which Nvidia may have benefited. Similarly, the argument that the employee's actions were entirely personal does not convince the judge: even if not formally authorized, the conduct may still give rise to liability on the part of the company if the company has benefited from it, either directly or indirectly.

This approach highlights a crucial principle for technology companies: it is difficult to place the responsibility for trade secret infringement solely on the individual employee, especially when the disputed activity is, even only partially, part of the employer's development and innovation processes. In fact, the German court ruled that the engineer was liable for the unlawful misappropriation of trade secrets in September 2023, but at the same time, Valeo filed a lawsuit against Nvidia in the United States, claiming that the company indirectly benefited from the stolen information—an accusation that Nvidia rejects, stating that the error was solely personal and that the company acted promptly by removing the material and firing the employee.

Future implications and what is at stake
The decision does not therefore close the case, but rather reopens it. In the coming months, the trial will determine whether Nvidia will have to compensate Valeo for the unlawful use of trade secrets. At stake are not only significant potential economic damages, but also the reputation of a company that has long played a crucial role in digital innovation.

The Italian regulatory framework
In our legal system, unpatented know-how—whether commercial or industrial—represents a set of knowledge, skills, business processes, and techniques that are not accessible to third parties because they are secret, and therefore economically advantageous to their owner. The Italian regulation of trade secrets and know-how is a legal area of growing importance, particularly in the technology and research and development sectors, where the protection of confidential information often constitutes a decisive competitive advantage for innovative companies.

Sources and regulatory reinforcements
The Italian system for the protection of trade secrets is primarily based on the Industrial Property Code, which comprehensively regulates the matter in Articles 98 and 99. This legislation was significantly strengthened by Legislative Decree No. 63 of May 11, 2018, which transposed European Directive 2016/943 on the protection of undisclosed know-how and business information.

The three requirements of Article 98
Article 98 of the Italian Industrial Property Code precisely defines the object of protection, establishing that trade secrets are "company information and technical-industrial experience, including commercial experience, subject to the legitimate control of the holder." The law requires the cumulative existence of three fundamental requirements: secrecy, understood as the general inaccessibility of the information to experts in the field in its precise configuration; the economic value deriving from the secrecy; and the adoption of reasonably adequate measures to keep it secret.

Prohibitions and responsibilities under Article 99
Article 99 of the Italian Criminal Code also recognizes the right of the legitimate holder of trade secrets to prohibit third parties from acquiring, disclosing, or misusing such secrets. Relevant to the case in question is that the provision also establishes the liability of those who, although not having directly stolen the information, use it knowing or having reason to know of its unlawful origin.

Secrecy in case law
Case law has clarified that the requirement of secrecy does not imply total inaccessibility of information, but requires that the body of empirical knowledge relating to the productive and commercial activity of the company be difficult to ascertain and not generally known or easily accessible to experts in the field. Confidentiality can therefore coincide with novelty, a concept that is also valued in relation to other industrial property rights (in this regard, see Court of Brescia, No. 648/2025).

Economic value and organizational measures
Economic value should be understood in the sense that, thanks to secrecy, the company that holds the information finds itself in a privileged position compared to competitors that do not have it, being able to exploit this advantage in economic terms to maintain or increase its market share.

Protective measures can be implemented through physical protection, using systems that prevent access by third parties, or through various forms of legal protection (which will be discussed in more detail below), such as information on confidentiality through specific clauses in contracts, confidentiality agreements, or internal protocols.

Know-how in the technology sector
In the technology and research and development sector, know-how is particularly important because it includes not only the technical designs of production facilities, but also assessments for plant modifications, internal management documents, production strategies, profitability analyses, recipes, and analysis methods. In case law, such information is usually considered to have significant economic value as it is the result of work carried out over many years, requiring considerable time, human resources, and financial investment.

Context of new technologies and impacts of AI
Article 124 of the Italian Industrial Property Code provides for a wide range of corrective measures that can be sought in court and civil penalties, from injunctions to the destruction of infringing items, up to the assignment of ownership to the right holder. The provision establishes specific criteria for assessing the proportionality of measures in proceedings relating to trade secrets, considering the value of the information, the protective measures adopted, the conduct of the infringer, and the impact on the legitimate interests of the parties and third parties.

Confidentiality in proceedings
The procedural system also provides specific safeguards to ensure confidentiality during legal proceedings. Article 121-ter of the Italian Industrial Property Code regulates the protection of trade secrets during proceedings, allowing the judge to prohibit the use or disclosure of confidential information to all parties who have access to the case files.

Preventive measures and staff training
Given the above, it is worth emphasizing the importance of the measures to be taken to protect trade secrets, not only to try to prevent unwanted disclosure, but also because, as mentioned, the protectability (including in court) and economic value of secrets lie precisely in their secrecy.

Recommended actions
Recommended actions include:

internal audits and policies: defining who can have access, with what limits and methods;
digital security: encryption, authentication, access management;
staff training: to raise awareness of the value of internal data and require certain precautions to be taken when handling it (for example, closing confidential documents before starting a video call that does not concern them, as taught by the Valeo vs Nvidia case);
contractual clauses (including in contracts with employees, external suppliers, and collaborators) and NDAs.

AI and the risk of data leakage
New technologies—in particular artificial intelligence—increase the vulnerability of know-how, as the latter and other trade secrets can be entered into AI tools as prompts/inputs to obtain an output. However, this means that such data is saved on the tool's servers and used to train the tool, and then also provided to third parties in the form of output.

Choice of tools and training
It is therefore advisable to train staff on these dynamics and try to choose tools (for example, by analyzing the relevant contractual and subscription conditions) that offer certain guarantees regarding the use they will make of the data entered as input.

Operational lessons from the
case The story involving Valeo and Nvidia highlights how sensitive and strategic the management of know-how and confidential information in general is in highly technological business contexts. The risk, in fact, is not only linked to intentional disclosure: even a false click, a wrong video conference (as seen in the case in question) or a distraction can compromise competitiveness and reputation. Moreover, during a video call and in the same way as in the case in question, confidential company information could be disclosed to a competitor, not just inadvertently admitting to having stolen it from the competitor.

Talent mobility and balancing interests
The case also highlights an issue that is as long-standing as it is increasingly relevant in the technology sector: talent mobility, a vital element for innovation, risks becoming a vehicle for the illegal transfer of know-how, giving rise to balancing interests that are not easy to satisfy. This is an issue that closely affects not only American and European multinationals, but also the start-up ecosystem, which is often based on rapid development and the ability to attract professionals from competitors.

The Nvidia-Valeo case could therefore set an important precedent: on the one hand, it warns companies of the need for rigorous compliance programs and onboarding procedures that minimize the risk of project "contamination"; on the other, it prompts broader reflection on the balance between protecting trade secrets and the circulation of expertise in a highly dynamic sector. On the other hand, as mentioned above, Article 99 of the Italian Industrial Property Code also provides for the liability of those who, although not having directly stolen the information, use it knowing or having to/being able to know of its illegal origin.

For Italian companies—especially those active in digital and innovation—it is time to strengthen the culture of industrial secrecy, equating know-how with patents, but with the flexibility of its confidential nature.

Source: Digital Agenda