- The Trade Secrets Protection Act came into force last year, which could necessitate changes to NDAs.
- Privilege for whistleblowers and reverse engineering are new aspects that need to be considered in NDAs.
- An NDA without an exception for whistleblowers could be flawed or even void, especially in business relationships between startups and large companies.
- The legal nature of NDAs may qualify them as GTCs, which may be inadmissible depending on the regulation.
- Ambiguities regarding the protection of trade secrets can lead to whistleblowing being prohibited in some cases.
- The inclusion of phrases such as "without being authorized to do so" in NDAs is recommended in order to minimize legal risks.
- NDAs and similar clauses in contracts should be reviewed regularly in order to avoid possible warnings.
The Act on the Protection of Trade Secrets has been in force since last year. Now the question arises: Does this mean that NDAs need to be revised?
Last year, I published an article here on the “Trade Secrets Protection Act.” Recently, a discussion has arisen among lawyers about the relationship between the law on the protection of trade secrets and a confidentiality agreement.
This relates in particular to the question of whether the text of an NDA must contain an exception for whistleblowers.
As before (from the UWG), companies can take action against the unauthorized acquisition, use or disclosure of trade secrets, and in the event of serious violations, they continue to face criminal consequences. What is new, however, is the much-discussed privilege for whistleblowers, the permission of so-called reverse engineering, the legal concretization of the individual claims, as well as special procedural provisions that ensure secrecy in legal proceedings, and the now for the first time legally defined, but also amended, concept of a trade secret.
Now, if an NDA does not provide an exception for a whistleblower, is it flawed? Void? Perhaps even as AGB abmahnbar? Especially in the case of NDAs between agencies or startups and larger companies, this question can already become very relevant.
The issue is very controversial in this area.
Originally, the cases regulated in Section 5 GeschGehG were intended to be statutory grounds for justification. Only later were the points changed to an exception to the facts. Even if this is the case, the question arises as to whether, in cases where it is expressly regulated in NDAs that trade secrets may not be disclosed, this also prohibits whistleblowing in case of doubt, which is prohibited under Section 307 para. 2 No. 1 in conjunction with 5 No. 2 GeschGehG would lead to the invalidity of such clauses if it is not provided at the same time that actions permitted under statutory exceptions are not to be covered by the contractual prohibition.
The normal is applicable at least if an NDA qualifies as a GTC, which is likely to be the case most of the time. In general terms and conditions, regulations that deviate from the legal norm are not permitted. However, many see the scope of application of § 5 GeschGehG much narrower than assumed at first glance, so that one could argue that information about an illegal process would not be a trade secret at all within the meaning of § 2 GeschGehG.
Even though many overestimate the importance of NDAs and I like to call them “toothless tigers” myself, it is probably a good idea to include an addition to NDAs such as “without being authorized to do so” or to include or expand exceptions for legally compelling disclosure. In this sense, stand-alone NDAs, but also NDA-like clauses in employment contracts, publishing agreements or agency pitches should be critically reviewed. The risk of an actually pointless warning should be avoided so quickly.
