Confidentiality strategy for startups: NDAs, trade secret law and practical measures

Start-ups thrive on innovative ideas, creative concepts and unique technologies. Whether it’s a novel algorithm, a special business idea, a list of valuable customer contacts or a sophisticated marketing concept – such information can be the most important capital for young companies. At the same time, start-ups often have to present their ideas to the outside world: to investors when pitching, to potential customers when submitting offers or to partners and service providers. This balancing act between “sharing” and “protecting” requires a well thought-out confidentiality strategy.

In practice, many founders make the mistake of assuming that their innovations are automatically protected, or that a quickly signed NDA (non-disclosure agreement) alone would suffice to protect the know-how. But the legal reality is different: The legal protection of trade secrets in Germany has been based on the Trade Secrets Act (GeschGehG) since 2019. This law inextricably links the protection of secrets with active measures taken by the company. In other words: Only those who adequately safeguard their own trade secrets also enjoy legal protection in the event of a dispute.

This blog post provides a comprehensive overview of how start-ups can keep their ideas, data and concepts confidential. It explains the legal basis of confidentiality protection, provides practical tips on drafting NDAs and highlights the necessary organizational measures (compliance). It is made clear why a non-disclosure agreement alone is not enough and what additional internal precautions should be taken. Typical mistakes made by start-ups when handling confidential information are highlighted and explained with reference to current case law, which is why it makes sense to seek legal advice at an early stage.

Legal basis: effectively protecting trade secrets

What is a trade secret worth protecting?

The first building block of a confidentiality strategy is understanding what can legally be protected as a trade secret. The German Trade Secrets Act (GeschGehG), which has been in force in Germany since April 2019, clearly defines what information is protected. Accordingly, information is only a trade secret worthy of protection if it meets the following criteria

• Secret: The information is only known to a limited group of people and is not generally accessible either as a whole or in its individual parts. It must not be in the public domain or easy to research.
• Commercial value: Precisely because the information is not generally known, it has a commercial value for the company. Its unauthorized disclosure would put the company at a disadvantage or give a competitor an advantage.
• Appropriate confidentiality measures: The rightful owner has taken concrete measures to ensure that the information remains secret. In other words, there is an appropriate protection concept (e.g. technical security measures, contractual confidentiality agreements, access restrictions).
• Legitimate interest: The company has a legitimate interest in confidentiality. In German law, this criterion is used to exclude trivial matters from protection – trivialities or generally known everyday knowledge should not be inflated to the status of a trade secret.

The law only speaks of a trade secret if all of these requirements are met. For start-ups, this means that not every good idea automatically enjoys legal protection. Although a creative business idea or an innovative concept is generally worthy of protection, it is only legally recognized as a secret if it is actually treated confidentially and represents a measurable value for the company.

Examples: A newly developed algorithm technology can be a valuable secret as long as the source code is only known to selected developers in the team and unauthorized access is technically prevented. A customer list can be a trade secret if it is not publicly accessible and the company makes a clear distinction between “internal use” and “confidential” data. Even an idea that is trivial in itself can develop business value in combination with a unique implementation – but only if competitors cannot easily access it.

The Trade Secrets Act: Active protective measures as a duty

The GeschGehG transposes EU Directive 2016/943 on the protection of trade secrets into German law and has replaced the provisions previously regulated in the Unfair Competition Act (UWG). A key change brought about by the new law is the emphasis on active confidentiality measures. Whereas previously the subjective will of the entrepreneur to keep something secret often played a role, an objective standard is now decisive: only sensible and verifiable protective measures by the startup justify a legal claim to secrecy protection.

Case law has confirmed this approach. For example, the Higher Regional Court of Stuttgart emphasized in 2020 that the need-to-know principle should apply as the minimum standard for appropriate measures. This means that confidential information may only be made accessible to those persons in the company who absolutely need it for their tasks; these persons must be informed of the confidentiality and be contractually obliged to maintain confidentiality. However, the law does not require absolute security – it is about reasonable, proportionate measures. This means that a startup does not have to invest a fortune in high-security measures if it can adequately manage its risks in other ways. However, as the value and sensitivity of the information increases, so does the expectation of the level of protection: the more serious a betrayal would be, the more stringent the measures required.

Courts have also made it clear that information is not considered secret simply because the company considers it important – there must be an objective need for protection and this must be practiced. Otherwise, there is a risk of a nasty surprise in an emergency: if you do nothing, you have little chance of invoking the GeschGehG in court. In a recent ruling by the Federal Labor Court (BAG) in 2024, it was emphatically confirmed that without appropriate protective measures, there is no trade secret worthy of protection. The court emphasized that companies must take action at an early stage in order to be able to use the legal claims at all.

What rights does the law offer in the event of betrayal of secrets? If information is recognized as a trade secret within the meaning of the GeschGehG, the startup is entitled to comprehensive civil law claims in the event of betrayal or theft. These include injunctive relief (the infringer can be prohibited from using or disclosing the secret by injunction or judgment), claims for removal and restitution (e.g. destruction of copies, return of stolen files) and damages. In particularly serious cases (e.g. commercial and gang-related misappropriation of secrets), the GeschGehG even provides for criminal penalties of up to several years’ imprisonment. However, these claims can only be enforced if a trade secret is actually involved – and this is precisely what the aforementioned active confidentiality strategy requires.

Permitted and unauthorized acts: The GeschGehG also distinguishes between the ways in which a third party has gained knowledge of protected information. Not every use of third-party knowledge is prohibited. For example, if a competitor has independently developed an idea or technology without using illegal methods, this does not constitute an infringement. Reverse engineering – i.e. the technically comprehensible disassembly of a product in order to obtain its design secrets – is also permitted by law, provided you are in legal possession of the product and no contractual agreement prohibits reverse engineering. For start-ups, this means that as soon as a product or prototype is released, it should be contractually stipulated that reverse engineering is prohibited if you want to prevent third parties from gaining access to your secrets in this way. On the other hand, any unlawful acquisition of a trade secret, for example by stealing documents or hacking, by deliberately exploiting a position of trust (e.g. an employee copying data) or by breaching an existing confidentiality obligation, is prohibited. The disclosure or use of an acquired secret is also inadmissible if it was clear that it was obtained without authorization.

In summary, the legal principles suggest two things: firstly, start-ups can protect almost all types of information – from technical know-how and business plans to customer profiles – as long as this information is not generally known and does not represent an economic advantage. On the other hand, the company itself is responsible for creating the basis for this protection by taking appropriate measures. A solid understanding of the legal situation is therefore the first step, but this must be followed by specific contracts and internal processes to turn theory into practice.

Contract design: NDAs as a protective shield for confidential information

When start-ups come into contact with others externally, confidentiality agreements are the means of choice for contractually safeguarding sensitive information. The term NDA (non-disclosure agreement) has become established in international usage. This document is intended to ensure that the recipient of certain information does not pass it on to third parties and only uses it for a defined purpose. In startup practice, NDAs are used wherever business ideas, findings or data need to be shared with someone: for example, with potential investors, external developers or agencies, with potential sales partners or even in discussions with a larger company that is interested in a collaboration.

Important clauses in non-disclosure agreements

Even if no sample contracts are presented here, it is helpful to know which components a balanced NDA typically contains:

• Precise definition of confidential information: First of all, it must be clearly defined what is covered by the agreement. Either certain categories are listed (e.g. financial data, source code, customer lists, business plans) or all non-public information of one of the contracting parties is generally covered. Specific documents or data records are also often marked as confidential. It is important that the recipient cannot later claim that they did not know that the information was supposed to be confidential.
• Purpose and scope: The NDA specifies the purpose for which the transmitted information may be used (e.g. “for the purpose of evaluating an investment” or “for the implementation of joint project XY”). Any use beyond this is prohibited. It also stipulates that no information may be passed on to third parties, except to those persons who must be involved in order to fulfill the purpose of the contract (e.g. employees or consultants of the recipient) – and these persons must also be bound to confidentiality.
• Duration of the confidentiality obligation: A key point is how long confidentiality should apply. The parties often agree on a period of time (e.g. 3, 5 or 10 years from disclosure). Sometimes confidentiality is intended to apply for an indefinite period, particularly in the case of long-term valuable trade secrets. A sense of proportion is required here: an NDA that is too short quickly loses its effect, while an indefinite commitment can be very burdensome from the recipient’s point of view. In practice, many therefore choose a longer but finite period, such as five years, with the option of explicitly excluding particularly critical information from the end date.
• Exceptions to confidentiality: An NDA usually contains standard exceptions that determine when the duty of confidentiality does not apply. For example, the recipient is not obliged to maintain confidentiality with regard to information that was already known to him prior to disclosure, that he developed himself without recourse to the secret, that is generally known to the public or that was lawfully disclosed to him by a third party (i.e. without breach of confidentiality). Even if there is a legal obligation to disclose (e.g. to an authority or in court), this should not constitute a breach of contract – in such cases, it is often required that the owner of the secret is at least informed.
• Return and destruction: At the end of the collaboration or as soon as the purpose has been fulfilled, the recipient should return or delete all documents, files and records received with confidential content. A corresponding clause in the NDA ensures that no sensitive data is “left behind”. In today’s practice, it is also often agreed that the recipient will confirm in writing upon request that they have deleted or returned the transfers.
• Contractual penalty and compensation: In order to emphasize the confidentiality obligation, many NDAs provide for a contractual penalty in the event of a breach. For example, it may be agreed that a certain fine is payable for each case of unauthorized disclosure or use (e.g. a fixed amount or an amount to be determined at discretion, but at least X euros). Such a clause has two effects: Firstly, it acts as a deterrent, and secondly, it makes enforcement easier because the injured party does not have to prove the damage in detail – it is sufficient to establish the breach of contract. It is important to set the amount of the contractual penalty appropriately, as excessive sums can be reduced by the courts in the event of a legal dispute or the clause as a whole can be declared invalid (keyword: general terms and conditions control, see below). In addition to the contractual penalty, the aggrieved startup can of course also demand further compensation if it has suffered greater damage as a result of the betrayal of secrets.
• Place of jurisdiction and applicable law: Particularly in the case of international contacts, it is advisable to specify which law applies to the NDA (usually German law for start-ups in Germany) and which courts should have jurisdiction in the event of a dispute. This prevents time-consuming discussions in the event of a dispute and provides clarity for both sides.

These points are central to an effective NDA. Of course, depending on the individual case, further provisions may be useful – such as an explicit ban on reverse engineering if technical product details are disclosed, or the obligation to comply with security precautions when handling the data received. It is crucial that the document is clearly formulated, balanced and complete so that it fulfills its purpose in an emergency.

Limits and pitfalls of NDAs

An NDA is an important tool, but not a panacea. Startups should be aware of the limits and practical problems of non-disclosure agreements:

1. no absolute security: A signature alone does not prevent a betrayal of secrets. Anyone who signs an NDA can still break it – intentionally or through negligence. The NDA then gives the owner of the secret legal leverage (omission, compensation, contractual penalty), but the actual damage (such as the loss of a head start or the publication of an idea) can often not be reversed. Particularly with very sensitive information, you should think carefully about who you entrust it to. Sparing disclosure according to the need-to-know principle remains advisable even with an NDA: Only disclose as many details as necessary, to as few people as possible.

2. hurdles with investors and customers: NDAs reach their limits precisely where start-ups often hope for confidentiality: with venture capital providers and large customers. Many professional investors refuse to sign a non-disclosure agreement before a pitch or initial meeting. The reasoning: they see startup ideas all the time and NDAs could significantly restrict their freedom to invest in similar concepts. Similarly, large companies are often reluctant to sign NDA documents right at the beginning of a contact initiation. A startup should plan this into its strategy to avoid scaring off investors or customers at the first step. The solution may be to take a staggered approach: In the initial pitch, you only present general aspects of the business idea, leaving the specifics (e.g. the exact algorithm or the precise customer acquisition strategy) vague at first. Only if there is serious interest can detailed information be disclosed in a second phase, protected by an NDA. Some investors also agree to guarantee confidentiality at least from a certain stage (e.g. in the due diligence process before an investment). It is important to strike a balance between protecting the idea and the need to disclose enough to convince others.

3. control of general terms and conditions and ineffective clauses: NDAs – especially if a startup gives a pre-formulated standard document to many negotiating partners – are subject to the so-called GTC control according to the German Civil Code. This means that clauses that are unreasonably disadvantageous or unclear are invalid. A typical case: the confidentiality clause is so broadly worded that it effectively amounts to a non-competition clause (“the recipient may not conduct any business in the area of XYZ”) without any consideration or limitation being provided for. Such an overdraft would not hold up in court. Equally problematic would be a contractual penalty clause with completely excessive sums or an indefinite commitment if it gags the recipient for a disproportionately long time, even though the information value has long since evaporated. Startups should be aware that a self-formulated NDA will be put to the test by a court in case of doubt. It is therefore advisable to draft the clauses in a legally secure and fair manner. An agreement that is too strict or “draconian” can prove to be a boomerang: In the event of a dispute, you are then left without effective protection because the key points are invalidated.

4. internal matters must remain internal: An NDA governs the relationship with external parties. However, it is at least as important that confidentiality is also practiced within the startup. Employees, co-founders, interns – all persons who have access to sensitive data should also be contractually and organizationally bound. This includes employment contracts containing confidentiality clauses that apply beyond the end of the employment relationship. There should also be guidelines on how to handle confidential information internally (more on this in the next section). A startup that demands NDAs externally while handling data carelessly internally is putting its confidentiality at risk.

In summary, NDAs provide an important, indeed indispensable, legal framework for demanding confidentiality from external partners. However, they are only ever one part of the protection strategy. The behavior of all those involved and the protection within the company are just as important. The next step will therefore look at the organizational measures and compliance practices that make legal protection effective in the first place.

Organizational measures: Internal compliance for the protection of secrets

In addition to contracts, comprehensive confidentiality protection for start-ups requires one thing above all: practiced compliance within the company. This means that internal structures and processes must be established to ensure the careful handling of confidential information. The following measures have proven themselves in practice:

Confidentiality culture and sensitization

First of all, a culture of confidentiality must be created in the startup. Everyone in the team should understand what information is critical and why it is so important to protect it. This can be achieved through clear communication and training. The topic of confidentiality should already be discussed during the onboarding of new employees. Typically, employees sign a confidentiality agreement in their employment contract or as a separate agreement that obliges them to keep all internal company information confidential. However, a signature alone is not enough – staff must also be made aware of this in practice: For example, training courses or leaflets can point out that you should not chat about certain projects in public or on the phone on the train, that you should be skeptical of unknown emails (keyword social engineering and phishing, which can be used to find out secrets) and that you should be particularly careful in the home office about who can listen in or watch. Raising awareness in this way creates a kind of “inner protective wall”: the employees themselves take care to avoid leaks.

It is also advisable to appoint a person responsible for the topic. In larger companies, there is sometimes a confidentiality officer, but in start-ups this role can be taken on by the management, the CTO or another senior employee. It is important that someone keeps track of what confidential data exists and how it should be handled. This responsible person can also decide on specific issues, such as whether certain information may be passed on to an external partner and under what conditions.

Identification and classification of secrets

Not all internal information requires the same level of protection. A startup should therefore systematically determine which information is core business-related and sensitive. This could be technical documents (construction plans, source codes), business strategies (expansion plans, pricing strategies), financial data (investment plans, sales figures) or special supplier and customer lists. These identified “crown jewels” must be classified as trade secrets.

In the next step, a classification is recommended: confidential information can be divided into categories such as “internal”, “confidential” and “strictly confidential”. Rules can be defined for each level as to who has access and how the data is to be handled. For example, everyday internal information (“internal”) can be accessible to all employees, but really sensitive details (“strictly confidential”) can only be accessed by management and a few key people. It is important to record this categorization in a comprehensible manner – for example in an internal guideline or a short confidentiality concept document.

Technical safety precautions

A large part of the protection of secrets can be achieved through IT security and access management. Here are some key points:

• Access restrictions (need-to-know): As already mentioned in the legal principles, access to sensitive data should be strictly limited according to the need-to-know principle. In practical terms, this means, for example, that certain files or folders on the server or in the cloud are only shared with selected people. Modern collaboration software and data room systems offer fine-grained authorizations. If you use them consistently, you can ensure that not every intern can see all financial data or the sales department all technical documents. Every release should be consciously decided and documented.
• Passwords and encryption: It goes without saying that all company accounts and computers should be protected by strong passwords (or even better: two-factor authentication). Confidential files can also be stored in encrypted form to prevent easy access in the event of an IT security incident (e.g. laptop theft). When transmitting sensitive information (e.g. via email), encrypted channels should be used or at least password-protected attachments.
• Document control and watermarking: If particularly sensitive documents are given to external parties (e.g. a PDF with concepts to a potential investor or client), they can be individually marked in advance. For example, with digital watermarks or at least a note such as “Confidential – only intended for Mr. X”. If the document is forwarded without authorization, it can be traced later who the source of the forwarding may have been. Such markings also increase the inhibition threshold for simply forwarding something.
• Physical security: Not all secrets are digital. If prototypes, samples or printouts exist, protective measures must also apply here. Lockable cabinets or rooms for sensitive materials, access controls to offices and visitor control can be relevant. An example: A start-up in the food sector has developed a new type of recipe. The exact composition of the ingredients should then only be kept in locked drawers or safes and perhaps only known to two people. Visitors to the laboratory area could be banned from using cell phones to avoid unwanted photos.
• Regular backups and access logs: An often underestimated aspect: backups should be secured in the same way as live data so that no one can access the information via old backups. It can also be useful to keep logs: Who accessed certain sensitive data and when? Not every startup will have a sophisticated logging infrastructure, but at least for the most critical areas, you can consider logging access or only allowing access via central systems that automatically create such logs.

Contract management and control

The best contracts are of little use if you don’t keep an eye on them. A startup should therefore keep a record of all NDAs or non-disclosure clauses and their scope. Especially if several founders or employees conclude NDAs independently, a central repository is helpful to avoid losing track. In case of doubt, the company needs to know exactly what information has been disclosed to whom and under what conditions. This documentation pays off if ambiguities arise later on: You can immediately understand whether a particular third party is bound or whether there are gaps in protection.

In addition, employee confidentiality agreements should be updated regularly. If an employee changes departments internally and suddenly gains access to other confidential information, it makes sense to reiterate the special obligations for this data. When leaving the company, exit interviews should take place in which the employee is once again reminded of their ongoing confidentiality obligations. It is even advisable to have this confirmed in writing. At the same time, the employer must ensure that the ex-employee does not take any confidential documents with them (handing over laptops, blocking access, handing over notes, etc.). Unfortunately, this “exit process” is sometimes neglected, especially in young companies, due to collegiality or lack of time – which can be a serious mistake, as changing employees are one of the biggest weak points in the protection of confidential information.

Practical scenarios from everyday startup life

To illustrate the importance of these measures, it is worth taking a look at typical situations:

• Pitch to a client by an agency: A young marketing agency has developed an innovative campaign idea for a major potential client. Before it presents (pitches) this concept, it is faced with the question of how it can protect itself. If it asks the client for an NDA in advance, it risks appearing uncooperative – many clients are unwilling to sign confidentiality agreements in the early stages. If, on the other hand, they forego contractual protection altogether, the customer could reject the idea, but later implement it themselves in a similar form or pass it on to someone else. The solution lies in the middle: The agency can at least clearly state on the documents that it is a confidential concept of the agency. It can verbally point out the confidentiality during the presentation. Ideally, it should try to reach a written agreement after the initial interest has been expressed before details are released. And if not, they should at least only outline the core idea, but not disclose all the implementation details. This way, she keeps an ace up her sleeve and maintains her advantage until a more in-depth negotiation.
• Talks with investors: A tech start-up with a new app idea is about to approach investors. The founders know that investors rarely sign NDAs. They therefore decide not to disclose any specific details about the algorithm in their pitch deck, but rather to focus on the problem, the market potential and their team. Only in advanced discussions, when an investor is seriously interested and perhaps a term sheet phase has been reached, should more detailed technical documents be disclosed in return for an assurance of confidentiality. In addition, the startup provides its deck with a note “confidential document – not for disclosure”. Although this note does not replace an NDA, it does emphasize the nature of the information. If something does leak out, you can at least argue morally or commercially that the recipient has breached the expected confidentiality, which would cast a bad light on the person concerned in the investor community. In this case, people rely in part on the unwritten laws of the industry and their reputation, underpinned by all internal measures, in order not to disclose the really secret aspects immediately.

These examples show: Organizational measures cannot be separated from contract design. Both aspects are interlinked and only their interaction results in robust protection.

Typical mistakes and risks for start-ups

Despite the now well-established importance of NDAs and confidentiality, startups repeatedly make similar mistakes in practice that unnecessarily jeopardize their ideas and trade secrets. Some of the most common pitfalls are listed below:

1. Underestimating what is really secret: Some founders believe that everything about their business model is top secret and refuse to share any information. Others are too careless and treat their concept as if it were already common knowledge. The truth lies somewhere in between. A common mistake is to inflate trivial or already widely known things as “secret” – this leads to unnecessary effort and unrealistic expectations of NDAs. Conversely, it can happen that really crucial parts of the idea remain unprotected because they are inadvertently divulged or no internal precautions are taken. Example: A startup generously presents its rough idea at a trade fair without revealing the technical “how”. Afterwards, however, employees loudly discuss the exact solution during a coffee break so that third parties can overhear. In this case, the wrong part was kept secret and the sensitive part was revealed.
2. Believing that an idea in itself is protectable: Many people underestimate the difference between an idea and its implementation. A pure idea (e.g. “Uber for XY industry”) can neither be patented nor protected as copyright. Its protection is based solely on the fact that no one else knows it or that the few insiders are bound to secrecy. The mistake is to assume that one can take action against “idea theft” without further ado. In reality, legal protection only comes into play once the idea has been substantiated – be it through a secret recipe, a source code, a database or an elaborated concept. Startups risk a lot if they release their raw concept too early and without protection. Startups should at least ensure that tangible elaborations (such as a business plan or a prototype) always remain under control and are passed on in a traceable manner (see organizational measures).
3. Relying on verbal agreements: “The other party will be fair” – some people succumb to this fallacy in the euphoria of a negotiation that seems to be going well. But as soon as money, competition or pressure come into play, nobody likes to remember vague agreements made in confidence. One serious mistake is to forgo a written NDA, even though it would have been possible. Of course, as mentioned, there are cases in which an NDA cannot be obtained (e.g. with many investors in the initial approach). But in most other situations, what is not in writing is almost impossible to enforce. A partner, service provider or consultant who seriously wants to work with a startup will generally have no objection to a mutual non-disclosure agreement. If someone strictly refuses to sign an NDA even though sensitive details are to be shared, caution is advised.
4. Poor NDA quality: Another risk lies in the use of poor contract templates. There are numerous templates for NDAs circulating on the internet, but not all of them are tailored to the German legal situation or the specific use case. A typical mistake is to simply adopt any English-language NDA template, which may contain clauses that are ineffective under German law (e.g. very strict provisions without exceptions or disproportionately high contractual penalties). Or essential points are forgotten out of ignorance. Result: You are lulled into a false sense of security. In an emergency, the NDA could be partially or completely invalid, for example because it violates general terms and conditions law or the confidential information was not clearly defined. It is therefore a mistake to use NDAs without a legal review. It is better to have a clean template drawn up once, which can then be adapted to the specific deal.
5. Insufficient internal measures: As already emphasized, NDAs alone are not enough. It is a fatal mistake to believe that once contracts have been signed, the matter is closed. If, at the same time, everything is lying around openly internally and there are no access restrictions, the best NDA loses its power. In addition, it is also impossible to recognize when internal leaks occur. Startups run the risk of falling victim to insider crimes (e.g. a disgruntled employee copying data) if they have no control. Another concrete risk is that in the event of a dispute, the owner of the secret must explain and prove what measures they have taken. Without documentation and actual practice, you are left empty-handed. Courts repeatedly emphasize this burden of proof. It is therefore a mistake to take compliance measures lightly. Young companies in particular think that formal policies are only for large corporations – until they realize that even a start-up quickly needs professional structures when it comes to protecting growing assets.
6. No emergency plan: Finally, an often overlooked aspect should be mentioned: what to do if something does happen? Many companies, not just start-ups, do not have a clear plan on how to proceed in the event of suspected theft of secrets. Anyone who hesitates or reacts in an uncoordinated manner may miss out on opportunities for rapid legal assistance. A typical mistake is to delay calling in a lawyer or securing forensic evidence instead of immediately considering an injunction. While it is always hoped that the worst-case scenario will never occur, in terms of risk prevention you should at least know who to contact and what steps to take (e.g. internal investigation, change passwords, identify potential perpetrators, seek legal advice).

All these points show: Many mistakes can be avoided with good preparation and awareness. Startups often simply lack the experience to know all the eventualities – this is where legal advice can be a decisive help, as the next section explains.

Conclusion: Combination of technology, contract and advice

An effective confidentiality strategy for start-ups consists of several interlinked components. Legal instruments such as NDAs and contractual clauses to protect confidentiality form the basis for being able to assert claims at all. They create clarity for business partners and employees as to which information is to be treated confidentially. However, the value of these contracts only becomes apparent when they are supported by organizational and technical measures in everyday life. The Trade Secrets Act requires start-ups to take active care: from restricting access to training and encryption, appropriate measures must be taken and documented to ensure that a mere idea becomes a legally enforceable secret.

Especially in the agile and hectic start-up phase, such “formalities” are easily overlooked. However, experience shows that a little preparatory work can prevent major damage. Those who use clear non-disclosure agreements early on, define internal responsibilities and follow proven compliance principles give their startup a real competitive advantage: the freedom to talk to partners and investors about their own innovation without having to constantly worry about ideas being stolen. And if someone does infidelity, there is a good chance that you can take legal action and limit the damage.

Last but not least, it is worth taking advantage of legal support. Experienced legal advisors can help start-ups to formulate NDAs and contracts in a watertight and practical manner, take current case law into account and develop confidentiality compliance tailored to the individual situation. You can also quickly take the right steps to defend trade secrets in an emergency. In this way, a startup invests in the security of its ideas without jeopardizing its growth plans. Ultimately, protecting ideas, algorithms, customer lists and concepts is not a luxury, but a necessary insurance policy for the sustainable success of a young company.