Changes brought about by the Trade Secrets Act
The protection of trade secrets is of enormous importance for companies. Until now, the only options available for protecting trade secrets were essentially the provisions of the Unfair Competition Act (primarily Sections 17–19 UWG) and, otherwise, general tort law (Sections 823, 826 BGB, possibly in conjunction with Section 1004 BGB).
With the Trade Secrets Act (GeschGehG) as the implementing law of Directive (EU) 2016/943 on the protection of confidential know-how and confidential business information (trade secrets) against unlawful acquisition, use and disclosure, the German legislature has now responded and established a uniform set of rules for the protection of know-how and confidential trade secrets.
The scope of application of the law can only be invoked under certain conditions. According to these conditions, a trade secret within the meaning of Section 1 I, Section 2 No. 1 GeschGehG must exist. A trade secret is defined as ‘any information that is secret (i.e., in short, neither generally known nor readily accessible) and therefore has commercial value and is subject to reasonable confidentiality measures by the person who has lawful control over the information.’ When determining whether a confidentiality measure is appropriate, it is advisable to consider the size of the company, the economic significance of the trade secret and any contractual agreements with employees and business partners (see BT-Drucks. 19/4724, p. 25).
The core of the Trade Secrets Act is Section 4 GeschGehG. It regulates when a trade secret is obtained, used or disclosed without authorisation. Section 4 II, No. 3 GeschGehG is of particular practical importance here: according to this, a breach of a confidentiality agreement no longer only has the legal consequences specified in the agreement, but is also a violation of the law with the legal consequences of the GeschGehG. Otherwise, Section 4 GeschGehG prohibits the acquisition, use or disclosure of trade secrets, for example in the case of unauthorised access to documents or files or in the case of conduct that does not comply with the principle of good faith, taking into account decent market practices. The acquisition of a trade secret is permitted, for example, if it was discovered independently or obtained by observing or testing a product without the person being subject to an obligation to restrict the acquisition of the trade secret. The acquisition, use or disclosure of a trade secret is justified if it is done to protect a legitimate interest, whereby Section 5 of the Trade Secrets Act provides a non-exhaustive list of examples for this.
Important for practice
If the information in dispute is a trade secret, its acquisition, use or disclosure is prohibited and not justified, the defendant is the infringer and the claimant is the owner of the trade secret, the trade secret provides for a comprehensive catalogue of legal consequences. In addition to claims for removal, injunctive relief, information and damages, there are also claims for destruction, surrender, recall, removal and withdrawal from the market, as well as other liability issues.
However, companies can only rely on the Trade Secrets Act if appropriate confidentiality measures have been taken. If companies want to protect their trade secrets effectively, they must take active protective measures and demonstrate a legitimate interest in confidentiality, even though a subjective desire for confidentiality was sufficient under the old legal situation.
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