3 questions to smart minds
Photo: Marcus Nothhelfer

Planned innovations in the protection of trade secrets

For this 3 questions to Marcus Nothhelfer

Arqis Attor­neys at Law, Munich
Photo: Marcus Nothhelfer
22. Janu­ary 2019

The plan­ned law “for the protec­tion of busi­ness secrets” (GeschGehG) is to newly regu­late essen­tial key points. The most important novelty: for the first time, the term “trade secret” is defi­ned by law. For compa­nies, one inno­va­tion in parti­cu­lar will require action. The amend­ment provi­des for protec­tion of trade secrets in the future only for those secrets for which appro­priate secu­rity measu­res can be demons­tra­ted. Stron­ger protec­tion for whist­le­b­lo­wers is also provi­ded for in the new law. 

For this 3 ques­ti­ons to Marcus Noth­hel­fer, Attor­ney at Law and Part­ner at Arqis Attor­neys at Law, Munich

1. What are the plan­ned essen­tial new regu­la­ti­ons in the protec­tion of “trade secrets”?

The center­piece of the new regu­la­ti­ons in Germany is the new Act on the Protec­tion of Busi­ness Secrets, or GeschGehG for short. The new provi­si­ons are thus bund­led into a stand-alone law instead of merely making adjus­t­ments to exis­ting regu­la­ti­ons. The new law opens up civil law claims such as injunc­tive relief and dama­ges to compa­nies in the event of unaut­ho­ri­zed acqui­si­tion, use or disclo­sure of trade secrets. The protec­tion of trade secrets from disclo­sure in the course of legal procee­dings is also impro­ved, a novelty within German civil proce­dure law. The central concept of a trade secret is defi­ned by law for the first time.

In the future, only infor­ma­tion that is secu­red by “appro­priate confi­den­tia­lity measu­res” will be expli­citly protec­ted. This criter­ion will become of central rele­vance for judi­cial prac­tice and it will also cause diffi­cul­ties, as it is clearly subject to inter­pre­ta­tion and is also desi­gned to be highly depen­dent on indi­vi­dual cases.

2. What then do “reasonable nondis­clo­sure measu­res” mean for the busi­ness owner after the law goes into effect?

This means that in the future, the inju­red party must also prove the exis­tence of the objec­tive criter­ion of “reasonable secrecy measu­res” in a court dispute. — This means that evidence must be presen­ted that shows that the speci­fi­cally dispu­ted, unaut­ho­ri­zed infor­ma­tion was kept secret within the company by means and measu­res that may be conside­red “reasonable” under the circum­s­tances of the case. In order to be able to meet this obli­ga­tion to provide evidence in the event of a dispute, compa­nies must be prepared and define suita­ble inter­nal struc­tures and proces­ses. IT- and soft­ware-based docu­men­ta­tion and secu­rity systems, as well as strict compli­ance proce­du­res, will in all likeli­hood become indis­pensable here.

Future case law will have to show which precau­ti­ons are ulti­m­ately deemed “appro­priate” in this context. It is alre­ady certain that in the future the econo­mic value of a secret and the respec­tive measu­res to protect it must be in an adequate relationship.

3. So then the plan­ned legis­la­tion will bring better protec­tion for companies?

The future new law on the protec­tion of trade secrets will provide a great deal of clarity and certainty in a border­line area of intellec­tual property law that has often been trea­ted step­mo­therly in the past. The protec­tion of know-how and trade secrets is exten­ded and brings them closer to the protec­tion of intellec­tual property rights.

Compa­nies will be well advi­sed to create and consis­t­ently main­tain sensi­ble inter­nal struc­tures that keep the owner­ship and secrecy of their valuable corpo­rate know­ledge, tech­ni­cal and busi­ness know-how, prova­ble. If this prere­qui­site is met, it will be possi­ble in the future to consis­t­ently pursue and stop rene­gade former employees or crimi­nal compe­ti­tors in the event of know-how theft, for example.

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