Effective Protection of Trade Secrets

Background

On 26 April 2019, the Trade Secrets Protection Act (GeschGehG) came into force. The law transforms Directive (EU) 2016/943 on the protection of trade secrets against unlawful acquisition, use, and disclosure into German law. In the meantime, several court decisions have been made, which are summarized below.

Case Law

Labor Court Aachen, decision of 13 January 2022 – 8 Ca 1229/20

1. If the defendant plausibly asserts that competitors could have obtained secret information through reverse engineering, the claimant must substantiate and, if necessary, prove that knowledge that is not known to the market underlies their products.

   
   

2. If the defendant denies that reasonable confidentiality measures in the sense of § 2 No. 1 lit. b GeschGehG have been taken, the claimant must, in detail, and referring to specific information, substantiate and, if necessary, prove which protective measures they have taken to maintain the confidentiality of this information.

   
   

3. A generally framed employment contract clause (see below), which extends to all business information received during the employment relationship (so-called catch-all clause), is not an adequate confidentiality measure in the sense of § 2 No. 1 lit. b GeschGehG.

"Mr./Ms. [First and Last Name] will maintain silence on all business and trade secrets and all other matters and incidents that come to his/her knowledge during the course of the activity. He/She will ensure that third parties do not gain unauthorized knowledge."

Higher Labor Court Baden-Württemberg, decision of 18 August 2021 – 4 SaGa 1/21

1. According to the court, the disputed price calculation was subject to circumstances that included reasonable confidentiality measures in the sense of § 2 No. 1 lit. b GeschGehG and constituted a trade secret in the sense of § 2 No. 1 GeschGehG. The claimant had implemented, among other things, a specific IT policy, a "need to know" principle, and a corporate compliance system. Additionally, the claimant used a contract clause, with which the respondent (compliance officer) was obliged to maintain confidentiality about trade secrets – also post-contractually. This clause was not considered too general by the court, as "business and trade secrets related to the management [naming of an area] and with confidential themes of the management and leadership" were explicitly named.

   
   

2. An interim injunction to refrain from using a trade secret cannot be issued in the absence of the danger of breach or repetition if it is clear from the sworn statement of the respondent that he/she is no longer in possession of the trade secret (similar to the Higher Labor Court Rhineland-Palatinate, decision of 25 January 2021 – 3 SaGa 8/20).

Practical Notes

• Catch-all clauses are ineffective under AGB law because they exceed the legitimate interests of the employer. A legitimate business interest of the employer in confidentiality must be limited to specific data and facts (see also Higher Labor Court Düsseldorf, decision of 3 June 2020 – 12 SaGa 4/20; Higher Labor Court Cologne (2nd Chamber), decision of 2 December 2019 – 2 SaGa 20/19). This also corresponds to the prevailing opinion in the literature (see Fuhlrott/Fischer NZA 2022, 809 (812); Köhler/Bornkamm/Feddersen/Alexander UWG, 40th edition 2022, GeschGehG § 2 Rn. 61 a; Apel/Stolz GRUR-Prax 2021, 1 (2); Hauck GRUR 2022, 530 (535); Hoeren/Münker MMR 2021, 523 (524); Holthausen NZA 2019, 1377 (1380).

  
  

• In case of dispute, the claimant bears the burden of proof and demonstration for the existence of a trade secret and the implementation of appropriate confidentiality measures.

  
  

• According to the Labor Court Aachen, the claimant's argument regarding the adequacy of confidentiality measures must not exhaust itself in general representations of the overall protection level. Instead, a detailed depiction of specific measures taken (confidentiality management) is required, which must particularly refer to the specific information at issue. Besides listing various measures, it must therefore be described specifically how exactly these measures protect the information at issue.

  
  

• The two decisions contain important advice on adequate confidentiality measures and are therefore worth reading for this reason alone.