Effective Protection of Trade Secrets

Background

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

Case Law

ArbG Aachen, Judg. of 13.01.2022 – 8 Ca 1229/20

1. If the defendant plausibly presents that competitors could have obtained secret information through reverse engineering, the claimant must substantiate and, if necessary, prove that their products are based on knowledge not known in the market.

   
   

2. If the defendant disputes that appropriate confidentiality measures as per § 2 No. 1 lit. b GeschGehG have been taken, the claimant must detail and relate to specific information what protective measures they have taken to maintain the confidentiality of this information and, if necessary, prove it.

   
   

3. A generally worded employment contract regulation (see below) that extends to all operational information received during the employment relationship (so-called catch-all clause) is not an appropriate confidentiality measure as per § 2 No. 1 lit. b GeschGehG.

"Mr./Ms. [First and Last Name] shall maintain confidentiality about all trade and business secrets as well as all other matters and events of the company that come to his/her knowledge during the course of the activity. He/She will ensure that third parties do not gain unauthorized knowledge."

LAG Baden-Württemberg, Judg. of 18.08.2021 – 4 SaGa 1/21

1. According to the court, the contested price calculation was subject to confidentiality measures appropriate to the circumstances as per § 2 No. 1 lit. b GeschGehG and constituted a trade secret as per § 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 defendant (Compliance Officer) was obliged to maintain confidentiality about trade secrets – even post-contractually. This clause was not considered too broadly formulated by the court. "Trade and business secrets associated with the management [designation of an area] and with confidential topics of management and executive management" were explicitly named.

   
   

2. A preliminary injunction to prohibit the use of a trade secret is not granted due to a lack of danger of commission or repetition if, based on the affidavit of the party against whom the order is sought, it is established that he or she no longer possesses the trade secret (as also LAG Rheinland-Pfalz, Judg. of 25.01.2021 – 3 SaGa 8/20).

Practical Advice

• Catch-all clauses are legally invalid under AGB law because they go beyond the legitimate interests of the employer. A legitimate operational interest of the employer in confidentiality must be limited to specific data and circumstances (see also LAG Düsseldorf, Judg. of 03.06.2020 – 12 SaGa 4/20; LAG Köln (2nd Chamber), Judg. of 02.12.2019 – 2 SaGa 20/19). This also corresponds to the widely held view in the literature (see Fuhlrott/Fischer NZA 2022, 809 (812); Köhler/Bornkamm/Feddersen/Alexander UWG, 40th ed. 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 the event of a dispute, the claimant bears the burden of presentation and proof for the existence of a trade secret and the implementation of appropriate confidentiality measures.

  
  

• According to the ArbG Aachen, the claimant's presentation regarding the appropriateness of confidentiality measures must not consist solely of generic statements about the general protection level. Instead, it requires a detailed presentation of specific measures taken (confidentiality management), which especially refers to the specific contested information. Besides listing various measures, it must thus be specifically described how exactly these measures protect the contested information.

  
  

• The two decisions contain important information on appropriate confidentiality measures and are worthwhile reading for this reason alone.