24. March 2019

The new Trade Secret Law (Geschäftsgeheimnisgesetz)

Mainz, March 24, 2019 – Last Thursday, March 21, 2019, the Bundestag adopted the draft of a Trade Secret Law (GeschGehG) introduced by the Federal Government.

This implements the relevant Directive (EU) 2016/943 (“Know-how Directive”) and establishes its own basic law, which aims to provide appropriate protection against unlawful acquisition, misuse and disclosure of trade secrets.

Impact on business

Above all, in practice, the law will make preventive protection of trade secrets and its documentation more important. Only when these preventive measures can be proven in court, the appropriate protective mechanisms of the law apply. The measures include, for example

  • Non-disclosure agreements (which may need to be adapted in view of the new law)
  • Protective measures such as access and IT security,
  • Regulation of access rights,
  • Information classification (e.g., marking documents as “secret”).

The future jurisprudence of the law will have to be closely observed.

Essential content of the law

Section 1 provides for general rules, such as a definition of trade secrets in § 2 (1). It is essential that, according to the legal definition, a trade secret exists only if the appropriate information “is subject to appropriate confidentiality measures by its lawful Owner”. Which measures are appropriate within the meaning of the law will have to be assessed on a case-by-case basis. The relevant measures are actual security measures, for example in the area of ​​building and IT security, but also legal provisions such as confidentiality agreements with employees and partners. The measures taken are relevant to the question of whether a trade secret exists and how far this secret may be protected by the courts.

It should be noted that among the “permitted acts” defined in § 3, among other things, also the so-called “reverse engineering” included and thus expressly permitted by law, as long as it is not excluded by contract.

Furthermore, the law defines prohibitions for the protection of business secrets, which, if disregarded, constitute an unlawful acquisition or unlawful use or disclosure of a trade secret (§ 4). § 5 then again contains justifications for the protection of employees, “whistleblowers” and the general freedom of expression and information, in the presence of which a violation of § 4 may be justified in individual cases.

Section 2 contains the claims of the owner of a trade secret against the infringer in the case of unlawful acquisition, use or disclosure. These include claims for removal and omission (§ 6), destruction, surrender and recall (§ 7), information (§ 8) and compensation for negligent or intentional infringement (§ 10).

Section 3 sets out rules on the legal procedure for breach of trade secrets. Here, above all, the regulations on secrecy in judicial proceedings in §§ 16 to 20 should be mentioned. Upon request, certain information is classified as a trade secret within the court proceedings and the court may impose confidentiality obligations on the parties. It should be noted, inter alia, that a party that wishes to invoke secrecy, in addition to the ordinary complete written pleading, also has to submit another version of the pleading, which is reduced by the information requiring secrecy.

Section 4 contains the criminal provisions previously regulated in §§ 17 to 19 UWG for the protection of trade secrets.